Three generations: One legacy

Indoco Remedies, a legacy built by three generations, is on a growth trajectory, riding on the strong shoulders of its top management who have proved their foresight and business acumen time and again, reveals Usha Sharma

Three years back, in its anniversary issue, Express Pharma, under the theme ‘Next Generation’, featured Indian pharmaceutical companies whose next generation were already handling key roles in the company and striving to take it to the next level of growth. Ranbaxy Laboratories, Dr Reddy's Laboratories, Glenmark Pharma, Indoco Remedies, Elder Pharma, Cadila Pharma, Alembic Pharmaceuticals, Lupin and Claris Lifesciences were some of the companies who made it to this list. Indoco Remedies is one of those rising stars whose next generation is riding the growth wave very effectively with sound business practices and strategies. The company has grown from strength to strength, thanks to the people steering it at the helm. Govind Kare, the founder of the company built a strong base for Indoco Remedies by overcoming the initial barriers. Later on, his son, Suresh Kare, and the present day Chairman of the company, took over the baton and turned Indoco Remedies into a profit-making unit from a 'sick' company. Now, his daughter and heiress-apparent, Aditi Kare Panandikar, is all set to take Indoco Remedies to further growth and glory. In mid-February 2012, Suresh Kare, Chairman and Managing Director, Indoco Remedies announced that Aditi, who has already spent over 20 years in the company, will take over the reins of the business, as the Joint Managing Director, along with Sundeep Bambolkar. Suresh Kare is very positive that his daughter will take the company to new peaks of success by optimising the company's existing and future opportunities.

Kare Panandikar talks about the early days of her career, when she had just joined the company, “When I look back, in the year 1993, we had a flat organisational structure. There was a general manager reporting to my dad, Suresh Kare and most of the things were resolved at the desk of the Chairman and the Managing Director. The operations were at a very low scale and this structure was sufficient to manage things. However, over a period of time, we grew and felt the need to put management professionals in place, and we did so gradually. Over the next 20 years, I spent the first 10 years at the back-end and then for the next five years, I was handling international business, during which period, all our plants received accreditations from regulatory authorities across the globe and we also forged various alliances with big international generic companies.”

She continues to reminisce and says, “During the last 20 years, our organisation has been through a huge learning curve and we adapted ourselves to the swift changes in the business environment. Our international foray gave us tremendous insight into the business and our strategies were shaped in line with the global markets.”

“Myself and Sundeep Bambolkar, now promoted as Joint Managing Directors, as well as my father in his capacity as the Chairman of the company will actively participate in strategic decisions,” she informs.

Strategising for success

Kare Panandikar highlights the company's financial state since it entered into the capital market. “We were an unlisted company with sales of around Rs 150 crore in 2003 and consistently growing at 20 per cent, year-on-year. To maintain this growth, my father had set an objective of growing 10 times every 10 years and we could achieve the same till the end of 2000. However, we realised that it would not be possible to maintain the same pace of growth, unless we re-strategised on the domestic as well as the international business front,” she states.

She claims that a visit to CPhI, international pharma exhibition, in UK served as an eye opener and helped in accelerating the company's growth. “As we saw tremendous business potential for exports of pharma, we realised the advantages that our country has in terms of cost structure and the skill set which could be best exploited to tap the export market. We were already present in some of the emerging markets, but on a lower scale. The foray into the regulated markets was the need of the hour for growth and learning. We, then, set about re-strategising by bringing our manufacturing facilities to match the international standards and setting up a world class R&D centre,” she further shares.

Moving up the rank ladder

Improving a company's industry rank is not an easy task. But, things can be possible if hard work and proper strategy are put into place. Kare Panandikar informs, “Currently, we are ranked 30, as per AWACS, and we are aiming to climb up by at least five ranks in the near future. I understand that this is a challenging task, as it is not very easy to move up in the competitive pharma industry. However, we will make this possible by launching new products in the chronic segments, penetrating into the urban/semi-urban areas, strengthening our field force, improving the productivity of the sales team and by implementing scientific promotional activities. I am taking a keen interest in the domestic business, as majority of our revenues and profits are generated from here.”

Journey so far

Kare Panandikar gives due credit to Bambolkar, the other Joint Managing Director at Indoco, for their successes and says, “About five years ago, it was decided that Bambolkar and I need to get out of operational management and focus more on the strategic level. Keeping this objective in mind, we beefed up the managerial base, and today we have over a dozen senior management personnel as Presidents, Vice Presidents, Executive Vice Presidents etc. They are now independently handling their business division, with strategic guidance from the top management. We have also seen our asset base expanding from one manufacturing facility to nine manufacturing facilities today, supported by a world class R&D centre, which was expanded from a small set up to an area of 100,000 sq. ft.”

What could derail this smooth progress? Retaining skilled manpower could be a key challenge as the talent pool in this industry is very shallow. But Indoco seems to have struck the right balance on this front.

Kare Panandikar says, “I have the advantage of having handled the HR function for over a decade, therefore I understand the importance of sourcing and retaining the right manpower. In an evolving organisation, opportunity is first given to the existing manpower to take on the new challenges and grow. We have a low attrition rate as compared to the industry since we value our people the most. Our organisation has a good image in the society, therefore we attract good talents. So, our strategy will be to give opportunity to the existing people and at the same time bring in highly skilled talent who will ensure that the organisation constantly evolves and consistently excels.”

Today, there are many 'ifs and buts', and issues related to APIs, of which a major share is being imported from China. Kare Panandikar mentions the challenges she faced while being involved in the operation under her father's aegis. She says, “Yes, we did face some difficulties in the past due to our heavy reliance on APIs from China. I still believe that the real advantage for China is in the APIs which are manufactured in bulk. India was vulnerable due to China’s dominance on various accounts, including competition, unreliable supply timelines and illogical pricing. The situation has changed now and India has emerged as an equal competition to China for the API business. Our R&D efforts have fructified in the development of novel and cost effective processes. This, along with our better quality standards, gives us a lead over China and the reliance on them for API supplies is on the wane. At Indoco, we have established good API capabilities and are vertically integrated. Indoco intentionally never got into sales of high volume APIs. Over the next five years, our API business should give good contribution to growth. “

Future path for progress

Talking about the company's growth projection and plans for the year ahead, she informs, “The next 10 years are crucial for me, as I will be leading Indoco and take it to newer heights. All along, I have been involved in the operations of various functions that I have handled and now is the time to leave it to professionals and give them the direction and guidance, whenever necessary. My immediate objective will be to reach a Rs 1000 crore mark at the earliest. When we reach this mark, we should have a 50:50 mix between India and international business. I will give maximum two to three years time to achieve this and can share our further goals once this is achieved.”

“Internationally, we will focus more on contract research, licensing-out of dossiers/marketing authorisations backed by supply agreements. We have all the necessary infrastructure in place and may need to add capacities for APIs. The blue print to achieve this goal is shared with all the senior management and everybody across the organisation has been sensitised to reach this goal.”

She further predicts, “I also see tremendous growth opportunity within the domestic market.”

Thus, Kare Panandikar has set forth on a journey which will take Indoco Remedies, a legacy left to by her forefathers, to conquer new pinnacles of success. Her determination and focus inspires admiration, however, only time would reveal how far she succeeds in her endeavour.

u.sharma@expressindia.com