Piramal seeks global leadership positions in three areas

Will invest in contract manufacturing, OTC and critical care businesses

Piramal Healthcare plans to invest Rs6,500 crore (£886m; US$1.4bn) in its contract manufacturing and research, over the counter (OTC) and critical care businesses over the next five years as it seeks to become a global leader in these three areas.

Ajay Piramal, chairman at Piramal Healthcare, said the company aims to be a top 3 global contract manufacturer, a top 2 anaesthetic company and among the top 3 OTC companies in India by 2016.

In addition, the firm aims to have two new molecules in the market for cancer and cartilage repair over the next five years.

Piramal said at a recent analysts meeting that the money would be used for both acquisitions and organic expansion. No further details about potential acquisitions were revealed.

The firm has plenty of cash after netting Rs17,000 crore last May when it sold its Healthcare Solutions business (Domestic Formulations) to Abbott Laboratories.

In the contract manufacturing and research area, Piramal Healthcare will invest Rs2,700 crore and aims to acquire technologies and capabilities that it does not have, such as sterile injectables, biocatalyis and solubilisation.

The firm’s investment in the OTC segment will be Rs2,500 crore. It bought Cipla’s contraceptive pill iPill last year and has moved from 40th in 2008 to a top 10 position in 2011 in the OTC sector in India.

Piramal Healthcare has also expanded its senior management team in r&d by appointing Allan Hatfield, formerly with Novartis and Eli Lilly; Robert Armstrong, formerly with Eli Lilly; and Shashank Rohatgi, a former director of Daichi Sankyo India.

In an unusual deal, this week the firm bought a 5.5% stake in Vodafone Essar, the Indian operations of the mobile phone operator, for Rs2,900 crore.

The firm has a revenue target of Rs10,000 crore with EBITDA margins of 18–20% by 2016.

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Piramal Pharma Solutions (more information, website)