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8/3/2019 Export Management Economics (2)
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Export Management Project
Economics
A study – Wanbury Ltd (Export oriented
company specializing in API- Active
pharmaceutical ingredient)
Name- Somesh Chandran
Class- TYBA
Subject - Economics
Division- B
Roll No. - 3381
E mail – [email protected]
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Certificate.
This is to certify that Mr.Somesh Chandran – Class TYBA- Division B has completed
the project under the guidance of his class teacher- Miss Varsha Malwade.
I hereby confirm that the following work is my own work and is authentic. Any
similarities observed in the following work are merely coincidental. The following
draft is my final draft.
Signature-
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Acknowledgements
I have taken efforts in this project. However, it would not have been possible without
the kind support and help of many individuals and organizations. I would like to
extend my sincere thanks to all of them.
Deepest thanks to my class teacher Mrs.Varsha Malwade for guiding me during the
course of completing this project and also for correcting the rough draft with affection
and care.
I would also like to express gratitude to Mr.Shreyan Maralur-Manager(Strategy) and
Mr.Anand Dhoka ( Deputy General Manager-Commercial) for their guidance as well
as for providing necessary information regarding the project.
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TABLE OF CONTENTS
1. Introduction……….…………………………………………………………………………………5
2. Products………………………………………………………………………………………………..6
3. API overview………….……………………………………………………………………………….7
4. Types of markets……..……………………………………………………………………………10
5. Exim policies………..………………………………………………………………………………….11
6. Marketing strategy…………..……………………………………………………………………….12
7 Pricing strategy …………………………………………………………………………………………15
8. External and internal challenges………………………………………………………………16
9. Financial achievements……………………………………………………………………………..22
10. Market share…………………………………………………………………………………………….23
11 Increase in exports.…………………………………………………………………………………24
12. Methodology……………………………………………………………………………………………..25
13. Expansion…………………………………………………………………………………………………27
14. Balance sheet………………………………………………………………………………………….28
14.Conclusion………………………………………………………………………………………………..29
15.Bibliography………………………………………………………………………………………………30
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Introduction
About Wanbury-
Wanbury Limited came into existence with the merger of the two companies –
WANDER and PEARL ORGANICS:
Wander Ltd.is an internationally known ethical branded formulations marketing
company, founded in 1865 by Dr. George Wander in Berne, Switzerland with
considerable presence in the Indian market.
In 1990 a company was established as Pearl Distributors Pvt Ltd. The company went
public and was renamed as Pearl Organics. It was an active bulk drug company with
major presence in the international market.
In 2004 the two companies amalgamated. The two entities are now functioning as
the independent business units of Wanbury Ltd., providing value to its customers
and shareholders.
In 2006 Wanbury became the world’s largest producer of Metformin with production
of 4500 metric tonnes
In 2007 Doctor’s organic chemicals merged with Wanbury.
In 2008 Wanbury was rated as the fastest growing company among top 100
companies as per ORG-IMS
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Products of Wanbury
Active Pharmaceutical Ingredients-
Wanbury is the largest manufacturer of some of its products which include
Metformin, Tremadol and Salsalate for the U.S market. Wanbury caters to more than
50% of the U.S market in these products and exports to over 50 countries. Wanbury
sells to leading global generic players in the regulated markets such as Apotex, Teva
, Mylan etc.
It has two approved product patents to its credit namely Sertraline Hydrochloride and
Carvedilol. Wanbury has applied for 5 product patents and 1 process patent and has
a basket of 20 API products which include-
Metformin ( Anti diabetic)
Tramadol ( Anti analgesic)
Gabapentene ( Anti-epileptic)
Sertraline (Anti-Depressant)
Diphenhydramine hydrochloride (Anti histaminic)
Diphenhydramine citrate (Anti histaminic)
Meganemic acid ( Anti-inflammatory)
Atenolol ( Anti-hypertensive)
Salsalate ( Anti-inflammatory )
Metformin: #1 Globally with sales of Rs. 108 Cr and 34% global
market share
Tramadol: #1 US with sales of 47 tonnes and 40% market share at
current run rate
Salsalate: #1 US practically sole suppliers
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API (Active Pharmaceutical Ingredients) Overview.
The Company continues to remain the largest manufacturer of
Metformin in the world with over 30% market share.
Another product Tramadol has also been in high demand especially in
American markets.
Over the latter half of the financial year the Company would have
catered to substantial share of the US requirement for Tramadol. This
has happened as a result of significant cost competiveness of its
product and continuous business development efforts with its
customers.
Domestic supplies of the products especially Metformin is gaining much more
importance now. There is an increasing trend, especially with big international
pharmaceutical companies to get their requirement contract manufactured in
India.
Some of the Indian Pharma Companies are also taking strong positions in
regulated markets. Therefore the need for an API is showing increasing trend
in domestic market.
FY10 posed a number of challenges to the Company. One of its major
regulated market customer stopped purchases after the first quarter. The
contract manufacturing agreement of an intermediate for a big multinational
company came to an end during the year.
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The Company has still managed to generate comparable sales to the
previous year by better focus on other products, customers and
Markets. However from a profitability point of view this situation has resulted in
lower margins.
The Company had expected revival of its Metformin business in
America. Wanbury expects a key customer to resume the business in
2011-12 which will further strengthen the Company's market share.
The Contract Research and Manufacturing (CRAMS) business did not
perform as planned. No new business was generated during the year
Company hence was forced to close down the foreign office in Europe
and to scale down its R&D team to keep expenses under control.
Some top management personnel left the Company during FY10-11. Apart
from that the Company also ran into tough financial problems and had to
admit itself into Corporate Debt Restructuring.
New management came in the latter half of the year and has started working
on a turnaround strategy to reinvigorate the API business and take it to new
heights. The new management has cost reduction as one of its prime focus
areas so that the Company continues to make profit in a generic market with
high competition and reducing prices.
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The Company plans to look at automation as a solution to ensure
higher quality material to its customers. The Company has initiated
plans of increasing manufacturing capacity at Patalganga with limited
capital investment. This is being achieved by realignment of the
manufacturing area.
In FY11-12 the Company is targeting to increase its API sales by ~20%. A
significant part of this increase is expected from Metformin and Tramadol.
Plans are being formulated to further increase Tramadol manufacturing
capacity so as to meet additional requirements from other regulated
customers.
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Types of markets
Wanbury caters to mainly 3 types of markets. These markets exist throughout the
world. The company has a strong presence in regulated markets such as U.S,
Europe and Australia. It also has a considerable presence in non-regulated markets
such as Latin America (Brazil, Argentina) and Middle Eastern countries (Saudi
Arabia, Iran)
Achievements of Wanbury in these markets-
Supplier of choice to top generic players in US and Europe Adjudged as best vendor in south east Asia by the largest MNC for API
business. Renewed USFDA approvals for both locations in the current yea
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The Government Export-import (Exim) policies which are
applicable to the company
Wanbury makes use of various export incentives like
Advanced licence
Duty Entitlement Pass Book
Duty Draw Back
Along with this the company is exempted from Excise for all products which are
manufactured for exports. The company is also eligible for VAT refund as per
Maharashtra sales tax laws. E.g. - For exported items and interstate sales.Since the
company exports various products/bulk actives, the export policy has defined ratiosfor inputs for different products. T
he inputs for each product vary and after studying the defined input ratios for
different products, the company’s commercial department has decided to use the
export incentives differently for different products.
The company uses the Duty Entitlement Pass Book route for their main product –
Metformin. It uses the Advance licence route for another product- Tramadol. Since
the input prices would vary based on global prices for raw materials the company
reviews its export policy every 3 months in order to calculate the benefits with the
corresponding input prices for different products.
Regulations the company is subject to
Wanbury is subject to various regulations such as The Food and Drug Administration
(FDA or USFDA) approval (India), PCB (pollution control board), DISH (directorate of
industrial safety & health), and MIDC/APIDC (State industrial development
corporation).Since the production of these products involves various hazardous
elements certain licenses are also required for boiler usage, hazardous chemical
usage, explosive material usage etc. Additionally, plants are subject to audit &
approval by International customers as well as country/region specific regulatory
authorities (USFDA etc.) The USFDA is very stringent regarding the workplace
conditions and hence the company has to take utmost care with regard to its work
environment and safety standards.
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Marketing strategy
Wanbury adopts three main marketing strategies.
Below the line promotion strategies adopted by Wanbury.
Participation in trade fairs (Convention on Pharmaceutical Ingredients) –
(CPhI) - Wanbury participates in trade fairs in order to promote their products.
Facts and figures
About CPhI / P-MEC India 2010 and co-located events:
26,436 attendees from 86 countries, including 1,433 international visitors
Over 71% of visitors are decision makers
86% of visitors are very satisfied or satisfied
Conference program: 36 speakers and 12 modules
The company participates in such trade fairs since it offers a very good opportunity
to reach a large number of potential buyers in one convenient setting. It gives the
company a chance to show how the product actually works. Consumer reaction to
the product is tested before it is released onto the market which is of paramount
importance.
The consumer reaction at trade fairs gives an idea to the company with regard to
whether it should launch the product for widespread use or not. This saves a lot of
time and money. Such trade fairs allow potential customers to discuss a product with
members of the management team, which can be a valuable point of contact.
Technical and sales staffs are also available to answer questions and discuss the
product. Hence the advantages are plenty when it comes to participation in trade
fairs. Wanbury is able to tap various potential customers through such fairs and
effectively expand their clientele
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Direct marketing
Wanbury also engages in direct selling to generic buyers. Mr.K.Chandran (Vice
Chairman) considers this as a “dynamic marketing approach in the distribution
of products ”.
Why Direct Marketing?
In Mr.Shreyan’s (Manager Strategy) words “Because this permits you to generate
reactions from your target consumers, making you able to focus on your
business. This can get you to use your limited marketing resources where they
can be able to give you the results you need. It can also increase loyalty, bring
back old consumers and generate a new business all through the practice of a
direct marketing campaign ”
This is a personalized marketing approach. Generally the more highly priced and
complex the product, greater is the need for direct selling.
Wanbury has its own stall in buyer-seller meets like CPhI. This trade fair is heldevery year in different countries. In this case Wanbury is involved in the sale of
Active Pharma Ingredients (API) which is highly complex in nature. It conducts direct
marketing since individual buyers can be given personal attention. The company
sets up meetings with potential buyers and carriers out PowerPoint presentations
regarding product information.
Wanbury chiefly focuses on developing a relationship with the potential buyer and
ultimately attempts to “close the sale”
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Sales through Commission Agents
Wanbury is also involved in sale of products through commission agents. In
countries where Wanbury does not have relationships it appoints agents who have
contacts in respective countries. In such a case the commission agent represents
Wanbury on the selling end of the deal and uses his wide reach of contacts to set up
deals for the company with potential buyers.
The commission agent gets 1-2% of the total revenue obtained from the deal.
He/She signs a contract with Wanbury generally for a period of 1 year but sometimes
is also extended to 3 years.
The commission for the sales agents is country and company specific. For e.g. – The
agent is solely responsible for setting up deals in a certain country like Spain. Also if
he has certain contacts in a company then he is solely responsible for setting a deal
with that particular company.
There are rules and regulations which the agent must adhere to. He may represent
another company simultaneously but cannot represent Wanbury and a second
company for the same product.E.g- Wanbury sells Metformin (API). The agent can
represent only Wanbury with regard to sale of Metformin.
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Pricing strategies
Cost leadership strategy- Wanbury firmly believes in superior profits through
lower costs. Here the influence of cost is the most important factor. This
strategy involves reducing cost at every opportunity.
The firm believes in producing and marketing a good quality product at a lower cost
than its competitors. It produces on a large scale and thus is successful in striking
good deals with the suppliers for raw materials and other important inputs. This
strategy allows the company to gain a competitive advantage over its competitorssince low costs allow lower prices to cancel the margin of the closest competitor.
Cost Reduction Initiative
The Company has hired an experienced cost management consultant to analyse the
avenues of cost reduction in purchase of Inventory from the suppliers. In addition the
Company has also employed a supply chain professional to streamline the present
purchase process and renegotiate terms with suppliers.
Wanbury’s Cost leadership strategy is based on the following-
Size – Economies of scale E.g. - 8000 Tonnes of Metformin (Anti diabetic) per
annum, making it the largest manufacturer in the world. It has a 35% market
share of the world.
Greater labour efficiency and effectiveness and low cost labour - Wanbury
uses contract workers to reduce labour costs.
Control of overheads
Superior management
Low cost production
Using cost effective processes to reduce costs and enhance productivity
Favourable access to low cost sources of supply ( Wanbury has strategic
relations with suppliers of raw materials in China)
Greater operating efficiency and effectiveness
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As Mr Shreyan (Manager Strategy) appropriately put it “Cost leadership does
not mean necessarily selling at the lowest price. We sell at the industry
average price but enjoy above average profits through low cost production.
Wanbury firmly believes in the “Cost Leadership” strategy since –
It enjoys above average margins ( The firm exports to high margin
countries like U.S.A and Europe)
It is able to defend its market share effectively in spite of stiff
competition
The “Cost Leadership” strategy adopted by Wanbury also helps in
increasing market share.
External and internal factors affecting Wanbury-
As any other business, the company is subject to various risks and threats. The key
risks/threats are as follows-
Competition
Wanbury operates in a very competitive environment and hence pricing remains one
of the paramount factors that determine the performance of the company. The
Industry has excelled in the field of innovation, cost leadership, reengineering, quality
and range of products offered making it one of the most competitive and lucrative
industries. In the API (Active pharma ingredient) sector, the company has been
successful in facing stiff competition by influencing prices since it is the market
leader for Metformin in the world with around 35% market share. Wanbury’s main
competitors in the market are
USV Pharmaceuticals
Harman Finochem Limited
Aarti Drugs
Aurobindo Pharma
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The Company has always been focused on innovation not only on product launches
but also on strategic initiatives to help improve the sales and the overall health of the
Company. Wanbury has also considerably diminished the risk from competitors by
diversifying its product portfolio and also launching new value added products. This
has given Wanbury the edge over its competitors.
Increase in market price of key products and raw materials-
Rise in the cost of petroleum affect Wanbury’s operations. Raw materials used in the
factory require petroleum as the primary base for production. Rise in the price
petroleum leads to rise in the cost of raw materials like
Dicyandiamide (DCDA) and Di-Methyl Amine Hydrochloride (DMA HCl) which are
petroleum based products. This squeezes the margins that are achieved by the
company. Last year the price of DMA-HCl increased by 40% from 45 Rupees to 72
Rupees.
DCDA constituents about 40% of Wanbury’s cost. During the Olympics held in
China, the Chinese government took stringent measures to reduce pollution in the
country. In order to do so the government closed down the DCDA factory and thiscaused various problems to Wanbury since 90% of the company’s DCDA
requirements comes from China. This shot up the price of DCDA by 50% thus
affecting the company’s margins.
Indian Rupees – U.S Dollar Exchange Rate.
As the share of exports to total sales made by the Company is considerable, it is
prone to losses due to exchange rate fluctuations; however, the Company has
hedged its exposure to a large extent thereby reducing the risk.
A fluctuation in the exchange rate also upsets the company’s margins. Appreciation
of the rupee results in lower inflow of dollars. In 2009-2010 Wanbury hedged its
exports by buying derivatives. It assumed that the rupee would appreciate. In reality
the rupee depreciated thus resulting in huge losses. The company incurred a loss of
42 crores. However the company does not have any open derivatives at present.
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Government Policy
The government gives various export benefits to the company like Duty Entitlement
Pass Book (DEPB) Scheme and advance licences. Any change in the policy of
issuing these benefits affects the company’s margins. Currently the government is in
the process of doing away with the DEPB scheme benefits to the company. Since
Wanbury operates in the international market, it is at a disadvantage compared to its
international competitors due to such obstacles.
Increased costs due to capital investment in plants
The Active pharma ingredient (API) is capital intensive in nature. Reactors and other
equipment’s suffer wear and tear and corrosion because of the persistent use of
chemicals. The reactors and equipment’s have to be replaced every 7-10 years. In
order to increase production capacity and introduce new products, the company has
to incur addition capital expenditure. Wanbury is a fast growing company and hence
has to borrow in order to finance its operations. In the process of servicing the
interest, there is a strain on the company’s margins.
Patents / IPR
The success of the Company depends largely on its ability to obtain patents, protect
trade secrets and other proprietary information and operate without infringing on the
proprietary rights of others. The Company has a dedicated Research and
Development team that continuously innovates and remains competitive by
developing / acquiring ability to sort out simple and effective solutions to practicalproblems. The Company has a team of highly competitive scientists supported by
excellent instrumentation.
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Regulatory
Manufacturing of pharmaceutical products is heavily regulated and controlled by
regulatory and government authorities across the world. Failure to fully comply with
such regulations, could lead to stringent actions from the authorities/ government.
Regulators across the world, including the USFDA, have become stricter with the
pharmaceutical industry.
Human Resource
International Formulations Business - Cantabria Pharma
Like the last year FY 11 has been another tough year for the European markets and
Spain was no exception. Pharmaceutical industry in Spain has consistently been
held back due to price cuts enforced by the Government and due to competition as a
whole.
Over the last year there have been further price cuts which have hampered the sales
of the Company. Although the sales in volume terms have only been rising the
Company has not been able to make up the loss in sales value to offset the fixed
costs and hence was not able to break even last year.
Steps taken to overcome the issue
Several initiatives have been taken to counter the situation and loss in margin due to
price cuts has been partly offset by the reduction in cost of material. Other initiatives
that are being taken to improve the overall position of the Company are as follows:
Business Development / New Product Launches
The Company has always been focused on innovation not only on product launches
but also on strategic initiatives to help the sales and the overall health of the
Company. One such initiative that the Company has explored over the last year has
been to look at new sales channels and new areas of business development.
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The Company is in the process of hiring sales agents to the sell its products in
Spain. Sales done through this new sales channel provides the Company with two-
fold advantage:
_Greater geographical coverage: The agents are spread across Spain and would be
able to provide better coverage and support our products better.
_Reduction in manpower cost: Agents work on commission basis as a fixed
percentage of sales over and above the initial set up cost. The initial set up cost is
very nominal and the commission model ensures that the Company would have to
pay if and only if the sales happen reducing the overall manpower cost.
_Human Resource Initiatives: In order to improve productivity the Company hasfurther reduced the sales force from 63. This number would further go down with the
commissioning of the sales agents thereby further reducing the manpower cost.
Cost Reduction Initiative
Over the last year the company has extended its efforts to reduce costs as a whole
to increase profits thereby increasing the cash available for investment in business
and provide higher returns for the investor. Some of the significant cost reduction
initiatives undertaken by the Company are as follows:
Rollout of travel and hotel policy - Wanbury has tied up with Thomas Cook as the
sole vendor for providing service related to domestic and international travel and also
for hotel bookings. This initiative is expected to reduce costs for Wanbury to the tune
of Rs. 2 Crores per annum as a result of economies of scale and tying up with a
vendor with a pan India presence and better capabilities. Also, the costs are
expected to reduce by better implementation of travel policy which ensures that the
bookings are done well in advance to get the cheaper rates.
Implementation of Standard Fare Chart (SFC) and Standard Tour Plan (STP) - For
our employees in the field the SFC and
STP have been rolled out which ensures better control for outgo of expenses
governed by the standard rates.
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Process Improvement
One of the most important parts to creating a sustainable and healthy business is to
have efficient and robust internal processes which support the business owners. The
Company has taken a number of steps to improve and establish best in class
support systems.
Some of the key steps taken by the Company across areas are:-
Sales Admin - A dedicated sales admin team for each of the formulations division to
ensure quick response time and support for the field force.
Distribution - New distribution head has been recruited to implement industry best
practices with focus on reducing breakage and expiry returns by better supply chain
management.
IT - New systems and processes have been put in place to support the field, plants
and HO to ensure timely and correct data to the internal customers.
HR - HR processes have been revamped to reduce the TAT (turnaround time) for
recruitment and induction in the Company
Human Resource Risk
The Company's ability to deliver value is shaped by its ability to attract, train,
motivate, empower and retain the best professional talents. These abilities have to
be developed across the Company's rapidly expanding operations. The company
continuously benchmarks HR policies and practices with the best in the industry and
carries out the necessary improvements to attract and
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Financial Achievement
From the picture above, one can conclude that the financial health of the company is
very good. The compound annual growth rate of the company has increased by an
impressive 42% over 5 years.
There has been a dip over the last few years but the overall the company has shown
strong signs of growth over the years.
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Wanbury continues to dominate the market share for its products Metformin and
Tramadol. It relies heavily on these products due to its large market share and ever
increasing demand for the product, both domestically and internationally.
Over the next 2 years the company aims to further increasing its market share in
these products and is fully focused on achieving this goal. It has plans to increase
production capacity in order to meet ever increasing demand. It also has plans to
enter untapped markets and take full advantage of the optimum situation.
Wanbury Focused on Market Leadership (in volume terms)
34%
5%
12%
34%
Diphen
Hydramine
Sertraline
Tramadol
Metformin
FY 10 GlobalMarket Share FY 14 Global
Market Share
60%
22%
28%
55%
DiphenHydramine
Sertraline
Tramadol
Metformin
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How Wanbury increased its exports.
The company started manufacturing metformin an anti-diabetic at its Patalganga unit
and selling domestically and exporting to non-regulated markers. It soon realised
that these markets were purely price driven and there was no customer loyalty.
However regulated markets were looking at quality and these were more long term
contracts. However entry into these markets (Europe, U.S.A, Australia etc.) required
FDA approvals from the respective countries.
The regulated markets have higher realization and therefore more profits. It was also
seen that regulated markets comprised of more than 60-70% of the world market.The company therefore decided that if it has to grown in exports and make higher
margins it had to export to regulated markets. This required unit to be approved by
respective FDA of these countries.
This required higher standard of manufacturing and equipment’s. The company
embarked on an ambitious plan to upgrade its unit as per Europe and USFDA. In 2
years’ time the company got approval from USFDA. THIS opened up the market of
us and Europe. The company’s exports increased manifold after thus approval.
Large generic players like Apotex, Teva, Barr, Milon etc. started buying products
from Wanbury. This was the trigger for increasing its exports. The European and
usfda approvals were of paramount importance to increase exports.
This success encouraged the company to expand its product portfolio and started
manufacturing products like Tramadol, Gapapentine, sertraline etc.
The company saw great opportunities in growing CRAMS business. In this directionthe company did not have relationship with innovator companies like Glaxo,Pfizer.
The company acquired a manufacturing unit in Taanku near Vijawada. The company
Doctor’s organics was already involved in crams business with Pfizer. To get an
entry into this business the company acquired doctor’s organics. With this company
made a presence in the market. Companies like Novartis, Johnson and Johnson
started buying from Wanbury.
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Methodology/process of export
The export process is made more complex by the wide variety of documents that
the exporter needs to complete to ensure that the order reaches its destination
quickly, safety and without problems.
These documents range include those required by the authorities (such as bills of
entry, foreign exchange documents, export permits, etc.), those required by the
importer (such as the proforma and commercial invoices, certificates of origin and
health, and pre-shipment inspection documents), those required for payment
(such as the Reserve Bank forms, the letter of credit and the bill of lading) and
finally, those required for transportation (such as the bill of lading, the airway bill
or the freight transit order). Documentation requirements for export shipments
also vary widely according to the country of destination and the type of product
being shipped.
Once the product is manufactured it is packed in HDPE/Fibre drums. The local
customs department is informed who come for an inspection of the goods. Once it is
expected the goods are loaded into containers FCL/LCL depending upon the
quantity/Number of drums. This is then taken by trucks to the nearest port. JNPT for
Patalganga & Tarapur plant. Chennai port for Tanuku plant.
In the meantime the company reserves space in a ship through clearing agents who
handle the goods shipment into the ship. There are formalities which the company
has to undergo at the port wherein the customs check the identity of the goods,
origin of goods.
They also check whether the product is in the clearance list of the customs
authorities and the final clearance is given for exports. The payment for these goods
are ensured through an LC opened by the customer or on DADP basis.
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Depending upon the destination it takes between fifteen days to forty five days for
the customer to receive the goods. On reaching the shore of the customer of the
respective country the customer takes care of all procedures at their respective
ports. On receiving the goods the customer makes payments, if it is DADP or
through an LC.
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Expansion Policies (Expansion of manufacturing capacities/facilities)
The company started its operations from a plant in Patalganga. However the plant
capacity was almost fully utilized. the company had two options. Either to build new
plants or acquisitions. Building a new plant would require, Building a green field
project which would require two years’ time. The company with its aggressive growth
plants decided to go for acquisition to cut short the gestation period. It first acquired
Doctor’s organics which had a USFDA plant in Tanaku.
As of now the company has decided not to put fresh capital in building plants or
acquisitions as the balance sheet is stretched. The company has a tactical team
which continuously works on increasing the capacity of the existing plants by
reducing the manufacturing time.
This team has been successful in increasing the capacity of its product – Tramadol
from 9 metric tonnes per month to 14 metric tonnes per month without expanding i.e.
installing new reactors but only through its manufacturing process i.e. removing the
mismatch in different process like increasing the boiler capacity, Improving the
piping’s , automation of final packaging etc.
The company’s current objective is to increase the current capacities by improving
efficiencies thus increasing manufacturing capacity which involves lower capital
costs. Based on the current performances it is clear that the current action plan is
working for Wanbury since it has experienced an increase in sales.
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28BALANCE SHEET AS AT 31ST MARCH, 2011Schedule As At 31.03.2011 As At 31.03.2010
No. (Rs. in Lacs) (Rs. in Lacs)
SOURCES OF FUNDS
SHAREHOLDERS FUNDS
Share Capital 1 1,468.93 1,468.93Reserves & Surplus 2 14,046.13 17,024.48
15,515.06 18,493.41
LOAN FUNDS Secured Loans 3 28,855.43 26,326.93Unsecured Loans 4 6,814.40 5,791.34
35,669.83 32,118.27
Deferred Sales Tax Liability 25.34 31.94
TOTAL 51,210.23 50,643.62
APPLICATION OF FUNDS
FIXED ASSETS
Gross Block 5 28,563.71 27,528.36
Less: Depreciation / Amortisation 6,575.13 5,479.50
Net Block 21,988.58 22,048.86
Add : Capital Work in Progress 1,074.92 1,501.32
23,063.50 23,550.18
INVESTMENTS 6 10,471.57 10,172.31
CURRENT ASSETSInventories 7 3,638.94 3,235.61Sundry Debtors 8 6,556.51 8,222.74Cash & Bank Balances 9 759.25 1,042.20Loans & Advances 10 18,202.80 14,465.79
29,157.50 26,966.34
Current Liabilities 11 10,158.96 8,536.05Provisions 12 1,323.38 1,509.16
11,482.34 10,045.21Net Current Assets 17,675.16 16,921.13
TOTAL 51,210.23 50,643.62
Accounting Policies 17
Notes to Accounts 18
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Personal Conclusion
After analysing the various strengths, weaknesses, opportunities and threats of
Wanbury, It can be said that over the years the company has grown by leaps and
bounds. It has made forays into a number of markets and increased its market share
to a considerable extent. Curently it has been facing some tough times due to the
economic crisis in Europe. But the employees at Wanbury are convinced that this is
just a tough phase and things will improve over time.
The company has ambitious plans for the future in order to increase sales and
market share at the same time the company focuses on keep costs at a minimum
since it feels that this is of paramount importance if it has to keep its profits high. The
company has taken various steps in order to reduce the losses and get a grip of the
current situation.
After speaking to a couple of employees at Wanbury, I have a feeling that the
situation is getting better. There are also plans to introduce new products. For now
though it only plans on improving the current situation and from there on try to
achieve its objectives. The company has no plans in the near future with regard to
acquisitions and mergers.
As mentioned in the project, there is increasing demand for its two main products
Metformin and Tramadol and the company wishes to cash in on this by improving
production capacity. Overall things are looking better for the company than last year.
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Bibliography
www.wanbury.com
www.businessballs.com
http://en.wikipedia.org/wiki/Pharmaceutical_industry_in_India
http://www.eximguru.com/exim/guides/how-to-
export/ch_17_export_documents.aspx
http://www.pall.com/main/Biopharmaceuticals/Active-
Pharmaceutical-Ingredients-28488.page