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Granules India on the Growth Path

Details Category: Management Tuesday, 04 September 2012 17:31 Granules India is one of the world's leading manufacturers of Active Pharmaceuticals Ingredients (APIs), Pharmaceutical Formulation Intermediates (PFIs) and Finished Dosages (FDs). Its journey is also an inspiring tale of what it takes to become the best. Sachin Jagdale reports

C Krishna Prasad's decision to join the pharmaceutical business right out of college came as a surprise to many, especially given the fact that he had no background in pharma. However, he proved all the sceptics wrong when he traced a success story, initially with Triton Laboratories and after its amalgamation, with Granules India. Today, the MD of Granules India is a renowned name in India's pharma sector. The famous English author, HG Wells, had once said, “There is no upper limit to what individuals are capable of doing with their minds. There is no age limit that bars them from beginning. There is no obstacle that cannot be overcome if they persist and believe.” Prasad, perhaps is the genuine disciple of this philosophy. Challenging the odds The company started its pharma activities as an Active Pharmaceutical Intermediate (API) manufacturer. Paracetamol was the first product of the company. However, Prasad wanted to do something different. He didn't want to get featured among the people from 'me too' league. Though devoid of any pharma experience, Prasad had a lot of logical thinking. There were initial failures too. “That was the period of intense hardships. It was a start up company. We needed to buy new equipment many times and re-do the plant. That was the struggle we somehow managed get through,” informs Prasad. He adds, “We didn't have a big facility or a big team.” Prasad learnt by the time-tested trial and error method and kept the product going. Understanding the market

though small. it is important to unleash the full value of these assets to provide superior customer value. Granules India Granules recognised that much of its OE objective would be achieved through a culture of shop-floor excellence. In view of this. Prasad is also credited for coining the term Pharmaceutical Formulation Intermediate (PFI).” informs Prasad. As a result. which. can make the difference between leaders and laggards.” OE features Dr Bhaskar Krishna Arumugam. we decided to try these markets. “During the eighties." know what he wants but I would think about the C Krishna Prasad things that would make his life comfortable. He used to go to sale and look at customer's life the customer's need. Granules embarked on a OE programme with a singular objective in 2008: to emerge as a preferred choice of customers through superior quality. By 1987. . chemistries and other areas that deliver sustainable wins. OE teams inspect each process step to determine how to increase yields throughput and achieve process standardisation while reducing wastage and enhancing quality. CEO. the company’s OE programmes focus on process improvements. we recognise that it is important to not only invest in cutting edge assets. companies of our size would never think of exporting to markets like the US and Europe. During the initial years. Granules India Prasad expand the company’s product portfolio. service and cost. There is a separate team to look after OE. marginal sustainable improvements can make the difference between leaders and laggards in our industry. “At Granules.” says Prasad. we started dealing with the US may not always know market.Since its inception the company has always believed in negotiating paths that were never tried before. Operational excellence (OE) OE is an innovative concept at Granules India to make maximum utilisation of available resources. We made some contacts and travelled for marketing "Customer purposes. “This team is engrossed with how to save cents per kilo. Prasad was leading would think about the from the front in a campaign for company's products things that would make in the global market. however. Prasad says. Customer demands and requirements made MD. This team looks at products and figures out how to efficiently manufacture it so that company can improve productivity and reduce waste. “A customer may not always comfortable." Dr Bhaskar Krishna Arumugam CEO. The company's marketing what he wants but I approach was customer driven. Granules India. given the volume of products.” "Given the nature of our products. says. the company never shied away from revealing its global ambitions. raw material coefficients.

Given the nature of our products. ibuprofen and metformin their quest for 'new' has only grown over the years. Granules created Area Effectiveness Teams (AET). Though termed as leader in the market for paracetamol. Granules provides not just affordable but also the best product to its customers. We are working with some of the top universities and talents across the globe. Arumugam. contrary to this trend Granules has shown an interest in R&D. Our OE culture has made our team more inquisitive. “We are investing in R&D to develop best process technologies that will give us global advantage. The OE team comprises specialists in Six Sigma and engineers (chemical.” assures Arumugam. We want to accelerate growth and for that we are adding on products. considering the risk for the investor.” Granules also has global collaborations. plan the day’s production schedule with achievement gap. use sophisticated tools including root cause analysis. However. There are 15 members in our OE team spread over our India-based facilities. we constantly find ways to improve our systems and processes to remain as one of the most efficient pharma manufacturers. discuss the performance parameters of the previous day. Time. Usually. Traditionally R&D is not considered as a play ground for Indian pharma companies. where and how they should be applied and the various parameters of plant and performance monitoring. as well as when. mainly big pharma companies have occupied this space for a long time. The result is that at Granules there is a better understanding of sophisticated monitoring and analysis tools. which were integrated with the operations team to disseminate knowledge through the following initiatives like.”says Arumugam. enrich the team with cross-functional competencies. “The reason why we could keep our cost low is because we are very focussed. . “While Granules made notable strides with the OE programme. marginal sustainable improvements can make the difference between leaders and laggards in our industry. “Our investment in R&D is increasing steadily. mechanical and electrical) who work collectively to remove operational bottlenecks.” states Arumugam. “We are leveraging expertise that are available throughout the world. We are not working on 100 products simultaneously.The OE culture enhanced operational capacity without a corresponding increase in capital expenditure which lets Granules offer more value to customers. We will continue to increase our investment in R&D.” informs. we believe there is still tremendous scope for improvement. R&D Granules has made hard work a norm and success a habit. arrange for one attendee to speak on a business topic for 15 minutes. Arumugam says. money and risk involved in the development of New Chemical Entities (NCE) have for a long duration kept pharma industry hostile towards this very important section of their own business.

000 TPM within six months. The OE implementation earned Granules several recognitions including a Silver Certificate of Merit for the Gagillapur facility during the Manufacturing Excellence Awards 2011. the OE team is focused on improving productivity. has been progressively de-bottlenecked to 1. which was originally designed to produce 500 TPM. An ibuprofen PFI improved from six tonnes per days to ninetonnes with no capital expenditure. The team proactively analysed our machinery to increase throughput. • Alliances . The company’s OE programme is regularly cited by MNCs as a ‘best-inclass’ programme. Finished dosage unit: Although the Finished Dosage facility is in the process of ramping up and has spare capacity. PFI units: The production of a particular paracetamol PFI increased from 6 tonnes perday to 11 tonnes through process improvements within 18 months. This translated into a competitive advantage that lets Granules provide world-class quality products at a more cost effective price than competitors.Growth trajectory • • API units: Metformin nameplate capacity increased from 50 TPM to 150 TPM within three years and with negligible capital expenditure. Guaifenesin capacity increased by over 50 per cent to 100 TPM. We were able to successfully increase production from 100 TPM to 150 TPM within six months.000 TPM including going from 800 TPM to 1. The paracetamol facility.

Ajinomoto Omnichem has a very good relationship with some of the big pharma companies. in a derisked fashion. In the future. The company now expects to grow to over Rs 1. Granules even entered Gagillapur facility into knowledge widening collaborations with IIT Chennai. They have great technology. Granules expects to reinforce its knowledge-led competitive advantage by manufacturing some of its critical raw materials. NUS Singapore and a US laboratory to reinforce its goal of having applications that are the 'best to file' as opposed to 'first to file'. This JV has helped us get instant market credibility.000 crore within two years. It is difficult and time consuming to build the market and team on your own. We are bringing in manufacturing and local expertise. “This JV has been set up in the Pharma City in Vishakhapatnam. . one of the most interesting things that Granules has done is a Joint Venture (JV) with Ajinomoto Omnichem.” Granules took five years to grow from Rs 256 crore to Rs 654 crore. Hubei Biocause. manufacture more high margin products and invest in green technologies. Moreover. This JV has brought us to CRAMS space. To leverage its PFI and Finished Dosage (FD) capabilities JV was formed with a leading primary ibuprofen supplier. This JV gives us an access to the molecules that could not have been easily available. This will surely enable Granules to emerge as a stronger and more sustainable knowledge driven company over the foreseeable future.Collaborations have remained a key feature of Granules' journey for so many years. Arumugam informs. Construction has already begun and the facility should be completed in about a year. The company has entered into marketing alliance for its Metformin Abbreviated New Drug Applications (ANDA) for US sales.