Omkar Expands Its India API Production

India’s Omkar Speciality Chemicals forays into API business and has acquired LASA Laboratory on Oct 18,2012. Recently, the company is again expanding its API and intermediate manufacturing in Badlapur, Maharashtra, this time with an investment of nearly $5 million in an API plant.

API is the largest segment of the specialty chemicals industry.  The growth of API market in India is likely to add pressure on the production capacities. This will result in an increased scope and revenue for OSCL. Increased restrictions on the production cost have forced the API manufacturers from developed countries to shift their manufacturing base to the emerging economies like India, China and Eastern European countries like Hungary and Poland. This has helped emerging countries to make their global presence felt in the API market.

The acquisition of Lasa Labs in April 2012 has enabled OSCL to gain a portfolio of 10 APIs like Albendazole, Closental and Flucanazole. Though most of the APIs are generic, they still offer incremental market opportunity for OSCL. For instance, Albendazole is estimated to have a global annual demand of about Rs 1.7 billion.

The company will invest 25 crore ($4.67 million) to expand the production capacity to 1,950 metric tons from 1,700 metric tons now at one facility, an expansion it says will be online in 8 or 9 months, the Business Standard reports. “There is tremendous pressure from customers as well, both domestic and global, for supply of products,” Chairman Pravin Herlekar tells the newspaper.

Herlekar said the company also is looking at building capacity with some acquisitions. “Having a stronghold in Hyderabad, a hub of pharmaceutical and biotech industry, we are considering having a manufacturing base here via the inorganic growth route,” he said.

The company next month will bring online additional capacity at another plant in that area. It now will be able to produce up to 2,800 metric tons of intermediates (such as 3-Fluoro-5-(trifluoromethyl)benzonitrile, the CAS number is 149793-69-1) for anti-cholesterol, anti-depression and cardiovascular drugs. The company in April acquired Lasa Labs, which has a plant that makes APIs for the veterinary drug industry.

Pharma industry in India is growing at a reasonable pace. This is on account of population growth and the changing life styles of people. The drug for applications on anti-diabetic, anti-cholestrol, anti-hypertension, anti-asthematic, etc., has been constantly in demand. Interestingly, the Indian pharma industry is expected to do well on the back of growing global demand for generics drugs.