Drugs major Lupin, which posted a turnover of Rs 1,168 crore (Rs 11.68 billion) in March 2004, is exiting or merging several associate and subsidiary companies in an attempt to streamline its corporate structure. The Desh Bandhu Gupta-promoted group's restructuring exercise, which is under way, will be accomplished in phases.
Lupin Chairman Desh Bandhu Gupta, told Business Standard: "This is an effort to simplify our group holding structure. We are on our way to establishing ourselves as a $1 billion company by 2009 when more than 50 per cent of our turnover will come from the US and Europe. The move will also enable us to sharpen our focus on key growth markets and exit investments that are not yielding proportionate returns."
In the first phase, seven of the 35 associate companies like Frigid Leasing, Goodyear Investment, Lupin Securities, Samiksh Investment, Santosh Leasing, Vishtosh Investments and Zuari Leathers are to be amalgamated with another associate company, Synchem Chemicals. Lovin Care Products has been wound up. Lupin has sold Lupin Mining to an undisclosed buyer.
Lupin will also be exiting Thailand where it has a manufacturing presence through a 60:40 joint venture, Lupin Chemicals (Thailand), with a local partner, the G Premjee group. In South Africa, Lupin has already wound up its subsidiary. At the same time, the company will be setting up subsidiaries in Japan, Australia, Russia and Ukraine.
Most of the other associate companies are group holding companies, while Lupin Human Welfare and Matashree Gomati Devi Janaseva are trusts. These will remain untouched in the first phase.
Lupin has a subsidiary in the US, Lupin Pharmaceuticals Inc. Its operations in the region will be strengthened by the acquisition of a local company that specialises in paediatric drugs.
"Having created a marketing platform in the US, it is time for us to go for inorganic growth," Gupta added. He said it was easy to cover the entire US market because there were only 35,000 paediatricians in that country.
While Lupin has filed around 15 abbreviated new drug applications in the current financial year, it expects to file over 25 in 2005-06.