MIRA
INFORM REPORT
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Report Date : |
19.07.2008 |
IDENTIFICATION
DETAILS
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Name : |
MARCK BIOSCIENCES LIMITED |
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Formerly Known As : |
MARCK PARENTERALS ( INDIA) LIMITED |
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Registered Office : |
5th Floor, Heritage Near Vidyapath, Ashram Road, Ahmedabad
– 380014, Gujarat |
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Country : |
India |
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Financials (as on) : |
31.03.2007 |
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Date of Incorporation : |
21.12.1994 |
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Com. Reg. No.: |
04 – 23944 |
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CIN No.: [Company
Identification No.] |
U24139GJ1994PLC023944 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
AHMM01724C |
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PAN No.: [Permanent
Account No.] |
AABCM0366P |
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Legal Form : |
A Closely held Public Limited Liability Company. |
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Line of Business : |
Manufacturer of Medical Equipment. |
RATING &
COMMENTS
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MIRA’s Rating : |
Ba |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
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Maximum Credit Limit : |
USD 1814830 |
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Status : |
Good |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
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Comments : |
Subject is a well-established and reputed company meeting its normal
commitments timeously. The company has improved its performance and has been
successful in wiping-off all its previous losses. Trade relations are fair.
Business is active. The company can be considered good for normal business dealings at
usual trade terms and conditions. |
INFORMATION
DECLIENED BY
|
Name : |
Mr. Rajiv Bhatt |
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Designation : |
Manager (Finance) |
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Date : |
15.07.2008 |
LOCATIONS
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Registered Office : |
5th Floor, Heritage Near Vidyapath, Ashram Road, Ahmedabad
– 380014, Gujarat, India |
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Tel. No.: |
91-79-30017500 |
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Fax No.: |
91-79-30017600 |
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E-Mail : |
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Website : |
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Factory : |
876, N H No. 8, Hariyala, Kheda - 387411 |
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Tel. No.: |
91-2694-304000 |
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Fax No.: |
91-2694-304050 |
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Corporate Office : |
MD’s Office Tel No.: 91-79-30017553/
30017554 National Sales Tel No.: 91-79-30017542/
30017543 International Business Tel No.: 91-79-30017503/
30017507 Contract Manufacturing Tel No.: 91-79-30017505/
30017506 Regulatory Affairs Tel No.: 91-79-30017502/
30017504 |
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Factory : |
Production Tel No.: 91-2694-304016 Utility Tel No.: 91-2694-304017 Purchases Tel No.: 91-2694-304026 Despatch/ Logistics Tel No.: 91-2694-304029 QA/QC Tel No.:91-2694304033 HR and Admin Tel No.: 91-2694-304038 |
DIRECTORS
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Name : |
Mr. Jasbhai Rohitbhai Patel |
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Designation : |
Chairman |
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Address : |
25, Aryanagar, Amul Dairy Road, Anand – 388 001, Gujarat, India |
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Date of Birth/Age : |
22.09.1946 |
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Date of Appointment : |
21.12.1994 |
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Name : |
Mr. Jasbhai Jitendrabhai Patel |
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Designation : |
Director |
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Address : |
1469, Highway, 42 – N, Garden Apartment, 21, Jackson, GA - 30233 |
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Date of Birth/Age : |
18.10.1950 |
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Date of Appointment : |
21.12.1994 |
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Name : |
Mrs. Manishben B. Patel |
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Designation : |
Director |
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Address : |
69, Asopalav Bungalow, Near Royal Cesal Bungalow, Near Thaltej Char
Rasta, Thaltej, Ahmedabad – 380015, Gujarat, India |
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Date of Birth/Age : |
19.07.1969 |
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Date of Appointment : |
19.03.2005 |
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Name : |
Mr. Girishbhai Bhaveshbhai Patel |
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Designation : |
Managing Director |
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Address : |
69, Asopalav Bungalow, Near Royal Cesal Bungalow, Near Thaltej Char
Rasta, Thaltej, Ahmedabad – 380015, Gujarat, India |
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Date of Birth/Age : |
03.07.1966 |
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Date of Appointment : |
21.12.1994 |
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Name : |
Mr. Niranjanbhai Patel |
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Designation : |
Director |
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Address : |
3, Pentwater DR, S Barrington, IL – 60010, USA |
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Date of Birth/Age : |
24.08.1947 |
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Date of Appointment : |
29.03.2000 |
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Name : |
Mr. Prafulbhai J. Patel |
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Designation : |
Director |
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Address : |
2710, Sultana Ave, Ontario, C A - 91761 |
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Date of Birth/Age : |
01.12.1943 |
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Date of Appointment : |
03.07.2003 |
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Name : |
Mr. Rohitbhai J. Patel |
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Designation : |
Director |
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Address : |
Symcom, Ashram Road, Ahmedabad – 380015, Gujarat, India |
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Date of Birth/Age : |
22.02.1946 |
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Date of Appointment : |
03.07.2003 |
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Name : |
Mr. Ashabhai Babubhai patel |
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Designation : |
Director |
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Address : |
Barico Road, P B No. 46430, Nairobi, Kenya |
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Date of Birth/Age : |
09.07.1920 |
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Date of Appointment : |
31.01.1998 |
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Name : |
Mrs. Jayshreeben R. Patel |
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Designation : |
Director |
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Address : |
25, Aryanagar, Amul Dairy Road, Anand – 388 001, Gujarat, India |
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Date of Birth/Age : |
27.07.1951 |
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Date of Appointment : |
31.01.1998 |
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Name : |
Mr. P D Desai |
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Designation : |
Director |
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Address : |
104, Shyamkamal, “C” Building, Agarwal Market, Vile Parle (East),
Mumbai – 400 057, Maharashtra, India |
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Date of Birth/Age : |
14.12.1949 |
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Date of Appointment : |
31.09.1997 |
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Date of Ceasing : |
09.02.1999 |
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Name : |
Mr. Vashudeo Joshi |
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Designation : |
Nominee Director |
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Address : |
Shivam Railnagar No. 3, Behind Radio Colony, Jamnagar Road, Rajkot –
360006, Gujarat, India |
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Date of Birth/Age : |
07.07.1958 |
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Date of Appointment : |
22.10.1996 |
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Date of Ceasing : |
08.11.2001 |
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Name : |
Mr. Babubhai J. Patel |
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Designation : |
Diretor |
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Address : |
Vinukaka Marg, Bakrol Road, Anand – 380 001, Gujarat, India |
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Date of Birth/Age : |
10.10.1951 |
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Date of Appointment : |
31.07.1997 |
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Date of Ceasing : |
11.08.2003 |
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Name : |
Mr. Bhanubhai P. Patel |
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Designation : |
Director |
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Address : |
Honest House, Bakrol Road, V V Nagar, Anand – 388 120, Gujarat, India |
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Date of Birth/Age : |
03.04.1958 |
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Date of Appointment : |
31.07.1997 |
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Name : |
Mr. Pravin D. Mehta |
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Designation : |
Director |
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Address : |
6006, Samual Bluff, C T Sugar Land, Texas – 77479, USA |
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Date of Appointment : |
31.07.1997 |
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Name : |
Mr. Naginbhai D. Mehta |
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Designation : |
Director |
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Address : |
2nd Floor, ¼, Isaji Street, Balkrishna Chambers, Office No.
18, Vadgadi, Mumbai – 400 003, Maharashtra, India |
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Date of Birth/Age : |
24.03.1948 |
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Date of Appointment : |
22.11.1997 |
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Name : |
Mr. Madhushudan Rao |
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Designation : |
Director |
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Address : |
55, Vaishali Apartment, IIT Campus, Hauzkhas, New Delhi – 110016,
India |
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Date of Birth/Age : |
07.12.1967 |
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Date of Appointment : |
09.02.1999 |
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Name : |
Mr. Ambalal C. Patel |
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Designation : |
Nominee Director |
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Address : |
14, Shreyasnath Apartrment, Bibhag – B. Opp Gunjan Apartment, Behind
Dhanidhar Temples, Vasana, Ahmedabad – 380007, Gujarat, India |
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Date of Birth/Age : |
01.04.1944 |
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Date of Appointment : |
13.08.2002 |
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Date of Ceasing : |
03.07.2004 |
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Name : |
Mr. S R Sanchala |
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Designation : |
Director |
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Address : |
B – 112, Sailrupa Society, Behind Akshata Society, Kareli Baug Road,
Baroda, Gujarat, India |
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Date of Birth/Age : |
10.06.1948 |
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Date of Appointment : |
03.06.2004 |
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Name : |
Mr. Rajiv Makhija |
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Designation : |
Nominee Director |
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Address : |
C – 573, Sarita Vihar, New Delhi – 110076, India |
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Date of Birth/Age : |
10.04.1968 |
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Date of Appointment : |
30.11.2007 |
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Name : |
Mr. Anilkumar Chauhan |
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Designation : |
Nominee Director |
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Address : |
105, Great India Apartment, Plot No. 15, Sector – 6, Dwarka, New Delhi
– 110075, India |
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Date of Birth/Age : |
02.01.1962 |
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Date of Appointment : |
30.11.2007 |
KEY EXECUTIVES
|
Name : |
Mr. Shailesh Shah |
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Designation : |
Company Secretary |
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Address : |
A – B/31, Goyal Inter City, Opp. Doordarshan Kendra, Thaltej, Ahmedabad
– 380007, Gujarat, India |
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Date of Birth/Age : |
02.03.1960 |
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Date of Appointment : |
13.07.1995 01.07.2002 |
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Date of Ceasing : |
09.05.2001 |
MAJOR SHAREHOLDERS
/ SHAREHOLDING PATTERN
Equity share breakup (Percentage of Total Equity)
As on 31.03.2007
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Sr. No. |
Category |
Percentage |
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1. |
Public financial companies |
13.37 |
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2. |
Venture capital |
2.45 |
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3. |
Foreign holdings (Foreign institutional
investors, Foreign companies, Foreign financial institutions, Non resident Indians
or Overseas corporate bodies or others |
38.54 |
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4. |
Bodies corporate (not mentioned above) |
13.81 |
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5. |
Directors or relatives of directors |
24.60 |
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6. |
Other top fifty (50) shareholders (other
than listed above) |
7.23 |
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Total |
100.00 |
BUSINESS DETAILS
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Line of Business : |
Manufacturer of Medical Equipment. |
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Products : |
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GENERAL
INFORMATION
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Bankers : |
Central Bank of India Limited Ashram Road Branch, Usmanpura Char Rasta, Ashram Road, Ahmedabad –
380014, Gujarat, India |
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Banking
Relations : |
Satisfactory |
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Auditors : |
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Name : |
Mr. Gaurav J. Shah Chartered Accountants |
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Address : |
3rd Floor, Heritage, Off. Ashram Road, Near Gujarat
Vidyapith, Ahmedabad – 380014, Gujarat, India |
CAPITAL STRUCTURE
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
3,50,00,000 |
Equity shares |
Rs. 10/- each |
Rs. 350.000 millions |
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
22440714 |
Equity shares |
Rs. 10/- each |
Rs. 224.407 millions |
FINANCIAL DATA
[all figures are in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
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SHAREHOLDERS FUNDS |
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1] Share Capital |
224.407 |
224.407 |
148.731 |
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2] Share Application Money |
104.042 |
0.000 |
51.092 |
|
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3] Reserves & Surplus |
34.517 |
9.595 |
0.143 |
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4] (Accumulated Losses) |
0.000 |
0.000 |
(1.843) |
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NETWORTH |
362.966 |
234.002 |
198.123 |
|
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LOAN FUNDS |
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1] Secured Loans |
514.842 |
277.415 |
225.452 |
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2] Unsecured Loans |
15.452 |
21.727 |
26.818 |
|
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TOTAL BORROWING |
530.294 |
299.142 |
252.270 |
|
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DEFERRED TAX LIABILITIES |
10.124 |
3.605 |
0.000 |
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TOTAL |
903.384 |
536.749 |
450.393 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
441.145 |
422.239 |
223.971 |
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Capital work-in-progress |
323.227 |
30.038 |
152.382 |
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INVESTMENT |
0.000 |
0.001 |
0.063 |
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DEFERREX TAX ASSETS |
0.000 |
0.000 |
6.133 |
|
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CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
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|
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Inventories |
43.262
|
44.421 |
48.061 |
|
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Sundry Debtors |
57.743
|
48.751 |
32.985 |
|
|
Cash & Bank Balances |
64.394
|
7.869 |
10.160 |
|
|
Other Current Assets |
0.000
|
0.000 |
0.000 |
|
|
Loans & Advances |
33.647
|
25.479 |
16.099 |
|
Total
Current Assets |
199.046
|
126.520 |
107.305 |
|
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Less : CURRENT
LIABILITIES & PROVISIONS |
|
|
|
|
|
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Current Liabilities |
51.488
|
38.567 |
38.380 |
|
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Provisions |
8.546
|
3.482 |
1.198 |
|
Total
Current Liabilities |
60.034
|
42.049 |
39.578 |
|
|
Net Current Assets |
139.012
|
84.471 |
67.727 |
|
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MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.115 |
|
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|
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TOTAL |
903.384 |
536.749 |
450.393 |
|
PROFIT & LOSS
ACCOUNT
|
PARTICULARS |
|
31.03.2007 |
31.03.2006 |
|
|
Sales Turnover |
|
343.465 |
288.202 |
|
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Other Income |
|
4.949 |
2.825 |
|
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Total Income |
|
348.414 |
291.027 |
|
|
|
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Profit/(Loss) Before Tax |
|
36.376 |
22.579 |
|
|
Provision for Taxation |
|
11.368 |
11.712 |
|
|
Profit/(Loss) After Tax |
|
25.008 |
10.867 |
|
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Expenditures : |
|
|
|
|
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Raw Material Consumed |
|
119.192 |
103.023 |
|
|
Purchases made for re-sale |
|
0.000 |
1.953 |
|
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Consumption of stores and spares parts |
|
3.012 |
2.368 |
|
|
Increase/(Decrease) in Finished Goods |
|
5.109 |
5.979 |
|
|
Salaries, Wages, Bonus, etc. |
|
31.963 |
25.696 |
|
|
Managerial Remuneration |
|
0.783 |
0.783 |
|
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Payment to Auditors |
|
0.158 |
0.072 |
|
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Interest |
|
30.428 |
28.820 |
|
|
Insurance Expenses |
|
1.664 |
0.785 |
|
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Power & Fuel |
|
20.202 |
16.049 |
|
|
Depreciation & Amortization |
|
30.765 |
24.826 |
|
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Other Expenditure |
|
68.762 |
58.094 |
|
Total Expenditure |
|
312.038 |
268.448 |
|
KEY RATIOS
|
PARTICULARS |
|
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
PAT / Total Income |
(%) |
7.18
|
3.73 |
-- |
|
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Net Profit Margin (PBT/Sales) |
(%) |
10.59
|
7.83 |
-- |
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|
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Return on Total Assets (PBT/Total Assets} |
(%) |
10.44
|
7.76 |
-- |
|
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Return on Investment (ROI) (PBT/Networth) |
|
0.10
|
0.10 |
-- |
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|
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|
Debt Equity Ratio (Total Liability/Networth) |
|
0.16
|
0.18 |
0.20 |
|
|
|
|
|
|
|
Current Ratio (Current Asset/Current Liability) |
|
3.31
|
3.01 |
2.71 |
LOCAL AGENCY
FURTHER INFORMATION
Form 8
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Name of the company |
MARCK BIOSCIENCES LIMITED |
|
Presented By |
Mr. Shailesh M. Shah, AVP – Finance
and Company Secretary |
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1) Date and description of instrument creating the change |
14.12.2005 Agreement for hypothecation of Goods and Assets. |
|
2) Amount secured by the charge/amount owing on the securities of charge |
Medium term loan facilities granted by the Central Bank of India of Rs. 35.325 millions |
|
3) Short particular of the property charged. If the property acquired is subject to charge, date of the acquired of the property should be given |
Existing and proposed Land and Building and all the movable plant and machineries, spare parts, electrical and other installation, implements, equipments, tools, appliances and accessories both existing and proposed situated / to be situated at village Hariyali, Taluka Matar, Dist. Kheda on first charge basis ranking pari passu with the existing term lenders viz. IDBI and SBI and all the current assets of the company viz. stock of raw materials, work in process and finished goods, present and future book debts on the second charge basis. |
|
4) Gist of the terms and conditions and extent and operation of the charge. |
Margin: Land and Building – 50% Plant and Machinery – 25% Rate of Interest Interest shall be paid at the rate of 11.50% p.a. subject to change from time to time, for medium term loan. Repayment The medium term loan is repayable in 20 quarterly installments. |
|
5) Name and Address and description of the person entitled to the charge. |
Central Bank of India Limited Ashram Road Branch, Usmanpura Char Rasta, Ashram Road, Ahmedabad –
380014, Gujarat, India |
Form 8
|
This form is for |
Creation of charge |
|
Corporation identity number (CIN) or foreign company registrations number of the company |
U24139GJ1994PLC023944 |
|
Name of the company |
MARCK BIOSCIENCES LIMITED |
|
Address |
5th Floor, Heritage Near Vidyapath, Ashram Road, Ahmedabad
– 380014, Gujarat, India |
|
Type of Charges |
v Immovable property v Book debts v Others |
|
Particular of the charge holder |
CIN: U99999MH1911PTC000337 Name: Central Bank of India Limited Address: Ashram road, Near Usmanpura Char Rasta City: Ahmedabad State: Maharashtra ISO country code: IN Pin code: 380014 e-mail ID: bmahme0541@centralbank.co.in |
|
Nature or description of the instrument creating or modifying the charge |
Agreement of hypothecation and Articles of agreement executed as on dated 27.03.2008 |
|
Date of the instrument creating charge |
27.03.2008 |
|
Whether charge created or modified outside India |
No |
|
Amount Secure by the charge |
Rs. 70.000 millions |
|
Brief particulars of the principal terms and conditions and extent and operation of the charge |
Rate oif Interest BPLR + 0.50% = 13.50% Terms of repayment 66 monthly installments starting from 1st day of October 2008 Margin Land and building: 50% Plant and machineries: 25% Extent and operation of the charge 1st charge on entire block assets of the company both present and future to be shared on pari passu basis with IDBI Bank and State bank of India and 2nd charge on all current assets of the company both present and future to be shared on pari passu basis with IDBI Bank and State Bank of India. Others Personal Guarantee of Mr. Bhaveshbhai Patel and Mr. Rohitbhai Patel. |
|
Short particulars of the Property charged |
Entire block assets and all current assets of the company located at Plot No. 874 and 876 at Village Hariyala, Taluka Matar, District Kheda. |
|
Whether any of the property or interest therein under reference is not registered in the name of the company |
No |
As Per Website Details
In a marketplace resonating with the sounds of change, these are exciting as well as challenging times especially for the pharmaceutical industry.
At Marck Biosciences, they believe that virtually every part of the company must strive to innovate, to evolve, to change with the objective of achieving greater levels of competitive advantage.
Keeping pace with change has been the mantra for growth. A mantra called Innovision. A mantra that has been so internalized, that from being a large volume parenterals and IV parenteral formulations manufacturing company that commenced operations in 1998, today they have evolved into a company whose business interests include production of irrigation solutions, formulations in ophthalmic and respiratory care and small volume injectables making us a lead player with a wide variety of large and small volume preparations in sterile dosages.
Today, they are a midsize company with big size dreams. And evolution is the bridge to the future. The trust reposed by leading pharmaceutical companies by outsourcing their products, speaks volumes for the capabilities as an efficient and versatile contract manufacturing partner. They have the requisite expertise to nurture the idea from the earliest stages all the way to market.
Vision
Subject is a dynamic principle of order, manifesting itself in change, not in rigidity. They believe, because of Innovision, they have an organization that undergoes change without becoming chaotic, an organization that can re-engineer itself to remain relevant in a continuously dynamic environment.
Product Range
As a leading manufacturer of sterile liquid parenterals using Aseptic BFS technology, they provide the comprehensive range of products to the domestic as well as the international markets. The Large Volume Parenterals segment offers a complete range of common solutions, electrolyte replacements, anti-biotic solutions, diuretics, anti-infective and anti-fungal solutions whereas; diluents, ophthalmics, respiratory and irrigation solution make the Small Volume Parenterals range.
Within each category, they have different variants of products available from 5 ml to 1000 ml with different head portions such as; nipple – head, twist - off, leur – lock & screw types.
LARGE VOLUME PARENTERALS
v Formulations
v Fluid Therapy
v Irrigation Solutions
v Veterinary Solutions
v Eye Wash Solutions
SMALL VOLUME PARENTERALS
v Diluents
v Ophthalmics
v Injections
v Respiratory Solutions
v
Diluents
Contract Manufacturing
Pharmaceutical Industry understands the growing importance of strategic outsourcing planning.
They partner major pharma companies in India and abroad as a reliable and efficient contract manufacturer.
The F and D capabilities and process engineering competence successfully brings laboratory batches to commercial scale production to keep the customers at the forefront of the marketing.
Manufacturing
Infrastructure: Facility
To keep the pace with today’s requirements of the pharmaceutical industry, they have adopted the most modern and sophisticated Aseptic Blow – Fill – Seal technology. ISO certified and CGMP compliant facilities of Marck can handle manufacturing & packaging of Sterile Liquid Parenterals from 5 ml to 1000 ml.
Spread over 25 acres of land area near Kheda (Ahmedabad), the manufacturing operations are supported by most modern equipments, state – of – art Quality Control and F and D capabilities.
With a total construction area of 19,000 sq mts, the state – of – art manufacturing complex with following features gives us a competitive edge:
v Aseptic Blow Fill Seal technology from Renowned manufacturer’s like Weiler Eng.(USA) and Rommelag (Germany) with Nitrogen blowing facility for sensitive drugs manufacturing
v Clean rooms are made-up of prefabricated panels from Clestra France
v Manufacturing is in Grade “B” area and all vessels have chilling and sterilizing facility to facilitate manufacturing of various combinations of drug in clear as well as suspension form
v Filling is under grade “A” area having continuous particle monitoring with a background of grade “C”
v UPS for filling LFR on all BFS machines
v Terminal Sterilization of products by ‘Super Heated Water Spray Sterilizer”
v Entire process is controlled by “SCADA” system
v Automated packing lines having 100% leak detection system
They have most modern systems to support the entire
manufacturing process:
WATER SYSTEMS
v Double pass RO system coupled with EDI+UV and UF for generation of high grade purified water followed by distillation process for generation of SWFI
v Continuous recording system for WFI temperature, conductivity and velocity in loop
ENVIRONMENTAL CONTROL SYSTEMS
v Separate AHU system for each of the activities
v All classified rooms entry has bio-metric access control. All man and material entries to the plants are interlocked and material entries are sealed with dynamic LAF
Regulatory
At Marck, they have a dedicated and qualified team to handle various functions of regulatory affairs. Some of the identified strengths are:
Compiling and providing a complete range of regulatory documents suitable to the client’s requirement
Filing and preparing dossiers in consultation with the client’s regulatory group for semi-regulated and advanced markets
Tracking the submissions with different regulatory bodies and complying to the technical queries
Facilitating efficient interaction with regulatory bodies and client’s regulatory group
Liaisoning with FDA and other governing bodies for getting necessary product permissions and other “quality” related certificates
Updating the client on changes and affecting the changes (if any) by the different regulatory bodies
Dreaming big
Express Pharma - June 1-15, 2008
Competing in niche segments like parenterals and injectibles, Marck Biosciences has a story, which is not very run-of-the-mill. Arshiya Khan finds out why Marck is a class apart
Marck Biosciences was born in 1997. Though quite a young company it rose fast under the leadership of Bhavesh Patel, Managing Director of the company. In its very first year of its inception, the company generated an annual turnover of Rs 65.000 millions. In the second year, it almost doubled the turnover touching a whopping Rs 110.000 millions. But that was not all. "My baby has grown more than ten times in less than eight years," beams the proud promoter. According to him, the reasons for the fast growth are investment and diversified business mix. It is perhaps the way of life that the company believes in. The company started off with intravenous (IV) fluids because they consider IV fluids to be the first line of defence in terms of an emergency. Besides this, it has also benefited from being located in Gujarat. "The state is very enterprising and has an atmosphere which encourages industries to grow. This has contributed a lot towards developing pharma industry especially SMEs and SEZs," avers Patel.
Not a big deal
Every rose comes with a thorn and so also there were obstructions that came in the way of Marck. The biggest of all challenges was that the man who started the company had absolutely no knowledge of the pharma industry. An engineer with an MBA in finance, Patel just dreamt and today the dreams are true.
Set up on an area of 12 acres of land at Kheda, in Gujarat, with an investment of Rs 220.000 millions, the company has today expanded to 25 acres. "Initially the company was present in a small scale. When it was born it was number 12 in terms of age and capacity. Therefore, it was difficult to be competitive," says Patel.
Apart from competition, there were calamities which made their way into the history of the company. As unpredictable as they are, heavy rains in 1998 struck Marck destroying the plant facility. The company was still in its infancy and the floods came as a major blow. It took around three to four months to get the facilites back in action. Since then, nothing could stop the company from growing with steady flows of investment from the management into Kheda facility. Being a family owned company, there were a lot of personal finances (from the family) which went in as investments, in addition to loans from banks. However, as the company expanded its product portfolio it also felt the pain of being located in Gujarat. Like most other entrepreneurs in the state, Patel feels that, Gujarat pharma industry is adversely affected by special tax incentive zones in other states like Jammu, Baddi, Uttaranchal and Sikkim. Secondly, the Drug Price Control Order (DPCO) he feels is now acting as another hurdle. The reason for this he feels is that, "The spirit behind the DPCO is good but mechanism of implementation is outdated. My personal view is that some sort of price control is fine but it must get factored by latest development. For instance, the prices that were worked on six years ago, still remain. Especially, in case of manufacturing IV Fluid, where the polymer prices have gone up by 300 percent." Also like others he feels that the shortage of manpower is an issue to be looked at. Besides this, he highlights that although Gujarat has got a good road and rail network, it still needs to be improved.
The stepping stones which came in the form of floods did not make the journey any easier but the company managed to wade its way through troubles to a better future.
Trickling down
There is more than water which trickled down into the company. Initially the company dabbled in IV fluid manufacturing and grew into small volume parenterals (SVPs) and large volume parenterals (LVPs) and IV parenteral formulations. Today the company boasts of products like irrigation solutions, formulations in ophthalmic and respiratory care, diluents and small volume injectibles. What gives the company an edge over others is that it is the only company producing 0.5 ml injectibles to 1,000 ml irrigation solutions. In both LVP and SVP categories, Marck sells the products directly in both international and domestic markets. However, 40 percent of revenues come from IV fluids alone, 20 percent from diluents and remaining from respiratory products and contract manufacturing. Products are not just what interests the company. Marck does contract manufacturing for 48 of India's top 50 pharma companies and also some major international pharma companies. Marck's customer base in contract manufacturing includes companies like Dr Reddy's Laboratories, Torrent, Cadila, Themis, Zydus, Shreya, Glenmark, Ranbaxy and international customers from USA, South East Asia and Africa. Contract manufacturing demands state-of-the-art facilities and the company ensured the same and recently invested Rs 720.000 millions in its Kheda facility. After expansion of the Kheda facility, Patel predicts that the company's national sales business would grow four times. "You cannot grow unless you have some volumes in place and volume cannot grow unless they create capacity. So all these seven, eight years, the strategy has been investment centric. But now that they have created enough capabilities, enough versatility and good amount of experience the focus will be on marketing. They will shift the focus from manufacturing to marketing," explains Patel. With marketing on the cards the company is moving up the value chain and aims to achieve an all India presence for its products.
Number game
A decade is enough in business to decide a company's future. As they all know that the market is least predictable like any other natural calamity, the numbers change in the blink of an eye. So to sustain in a highly competitive environment, there is definitely hard work that goes in besides the luck factor that also plays a pivotal role. The company till now has been on an upswing with regards to generating revenues. As the company is catering to different areas of businesses, the revenue also comes through different ways. Thirty percent comes from exports, 25 percent from contract manufacturing and 45 percent comes from national sales. Earlier national sales were very small in terms of contribution to the company's revenue. Major revenues were generated from contract manufacturing and exports.
Crossing boundaries
Exporting to more than forty countries, the company's next target is the South East Asian market because of its highly lucrative nature. The company started its exports with the African countries and gradually expanded to CIS, Central America and some parts of Latin America. Patel gives two reasons for not capturing the South East Asian market saying, "First they did not have that kind of capacity to do justice to that kind of market development. Secondly the market development itself is a costly affair. Unless they have good product basket it doesn't make sense. So with the ophthalmic and respiratory products, they will enter into South East Asia. South East Asian market is much smaller than the Indian market in terms of units but in terms of pricing, it is very high." The company will bank on opthalmics and diluents in the Philippines market as it does not want to export diluents over a certain distance due to the high cost of transportation. The company expects a market share of ten percent for its diluents by 2008 and for opthalmics, it is targeting at two to five percent to start with and an increase it to 12 to 15 percent by 2009.
Some more dreams
Although Gujarat has numerous facilities which meet international standard, the small scale sector has got a number of units which need to modernise as well as improve scale of operations. This is something which if not taken care of might derail progress of Gujarat. The company has more dreams to work on as it aims to get into the top 50 league for IV fluids. It is looking at having a presence in all the advanced markets of the European Union (EU) and US. Anything more than injectibles and parenterals can eventually happen at a later stage. But the prime focus for Marck is to commission the Kheda facility. The company is also planning an investment of approximately Rs 800.000 millions over the next three years. Patel says, "They will have to continue that process and the logic is not only on commissioning but also in doing smart marketing, which they will be doing now."
CMT REPORT
(Corruption, Money Laundering & Terrorism]
The Public Notice information has been collected from various sources
including but not limited to: The Courts, India Prisons Service,
Interpol, etc.
1] INFORMATION ON DESIGNATED
PARTY
No exist designating subject or any of its beneficial owners,
controlling shareholders or senior officers as terrorist or terrorist
organization or whom notice had been received that all financial transactions
involving their assets have been blocked or convicted, found guilty or against
whom a judgement or order had been entered in a proceedings for violating
money-laundering, anti-corruption or bribery or international economic or
anti-terrorism sanction laws or whose assets were seized, blocked, frozen or
ordered forfeited for violation of money laundering or international
anti-terrorism laws.
2] Court Declaration :
No records exist to suggest that subject is
or was the subject of any formal or informal allegations, prosecutions or other
official proceeding for making any prohibited payments or other improper
payments to government officials for engaging in prohibited transactions or
with designated parties.
3] Asset Declaration :
No records exist to suggest that the property or assets of the subject
are derived from criminal conduct or a prohibited transaction.
4] Record on Financial
Crime :
Charges or conviction
registered against subject: None
5] Records on Violation of
Anti-Corruption Laws :
Charges or
investigation registered against subject: None
6] Records on Int’l
Anti-Money Laundering Laws/Standards :
Charges or
investigation registered against subject: None
7] Criminal Records
No
available information exist that suggest that subject or any of its principals
have been formally charged or convicted by a competent governmental authority
for any financial crime or under any formal investigation by a competent
government authority for any violation of anti-corruption laws or international
anti-money laundering laws or standard.
8] Affiliation with
Government :
No record
exists to suggest that any director or indirect owners, controlling
shareholders, director, officer or employee of the company is a government
official or a family member or close business associate of a Government
official.
9] Compensation Package :
The market
survey revealed that the amount of compensation sought by the subject is fair
and reasonable and comparable to compensation paid to others for similar
services.
10] Press Report :
No press reports / filings exists on
the subject.
CORPORATE
GOVERNANCE
MIRA INFORM as part of its Due Diligence do provide comments on
Corporate Governance to identify management and governance. These factors often
have been predictive and in some cases have created vulnerabilities to credit
deterioration.
The Governance Assessment focuses principally on the interactions
between a company’s management, its Board of Directors, Shareholders and other
financial stakeholders.
CONTRAVENTION
Subject is not known to have contravened any existing local laws,
regulations or policies that prohibit, restrict or otherwise affect the terms
and conditions that could be included in the agreement with the subject.
FOREIGN EXCHANGE
RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs. 42.78 |
|
UK Pound |
1 |
Rs. 85.51 |
|
Euro |
1 |
Rs. 67.90 |
SCORE & RATING
EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
6 |
|
PAID-UP CAPITAL |
1~10 |
6 |
|
OPERATING SCALE |
1~10 |
6 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
7 |
|
--PROFITABILIRY |
1~10 |
5 |
|
--LIQUIDITY |
1~10 |
6 |
|
--LEVERAGE |
1~10 |
6 |
|
--RESERVES |
1~10 |
6 |
|
--CREDIT LINES |
1~10 |
6 |
|
--MARGINS |
-5~5 |
-- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
YES |
|
--AFFILIATION |
YES/NO |
NO |
|
--LISTED |
YES/NO |
NO |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
54 |
This score serves as a reference to assess SC’s credit risk
and to set the amount of credit to be extended. It is calculated from a composite
of weighted scores obtained from each of the major sections of this report. The
assessed factors and their relative weights (as indicated through %) are as
follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend
(10%) Operational
size (10%)
RATING
EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely sound financial base with the strongest capability
for timely payment of interest and principal sums |
Unlimited |
|
71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit
transaction. It has above average (strong) capability for payment of interest
and principal sums |
Large |
|
56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
26-40 |
B |
Unfavourable & favourable factors carry similar weight in credit
consideration. Capability to overcome financial difficulties seems
comparatively below average. |
Small |
|
11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with
full security |
|
<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
|
NR |
In view of the lack of information, they have no basis upon which to
recommend credit dealings |
No Rating |
|