Indian drugmakers and chemical companies are finalising new orders as they have been relatively insulated from the national lockdown imposed in the aftermath of the novel coronavirus outbreak.
That's according to Tarak Patel, managing director of GMM Pfaudler Ltd., who said that his company doesn't see “a slowdown in terms of output”. “If we get back to action in the next couple of weeks, we can still make the numbers we had planned for FY21 and not revise our guidance lower,” he told BloombergQuint in an interview.
“We have order backlog for six months, so we have safety on that front,” Patel said, adding that the company lost nearly 10 production days in FY20 on the back of the lockdown. Yet, GMM Pfaudler expects to increase production by 50-70 percent.
“With the API (active pharmaceutical ingredient) market booming and India's dependence on intermediates from China, suppliers like us will need to scale up,” he said. Many countries, according to Patel, have started looking at alternatives to China following the disruptions to supply chains following the pandemic outbreak.
And India has an advantage on that count, he said. “India has gained some brand equity from export of (the anti-malarial drug) hydroxychloroquine,” he said. “The India story for pharma is definitely strong.”
The company is looking at investment opportunities. “We have two gas furnace investments coming up in June or July which is on schedule,” Patel said. “We're also planning to set up a second facility in Hyderabad. We're debt free, so the investment in Hyderabad isn't going to be difficult.”
Ahead of the virus outbreak, GMM Pfaudler was about to finalise a land parcel deal, which continues to be a top priority for them. “As soon as we see the light at the end of the tunnel we will go back and close the Hyderabad facility.”
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