Ashwin Kapur is 22 years old and ED of Atlas Laboratory & Pharmaceuticals Limited. His vision for the company is to attain a turnover of Rs 500 crore within the next five years. He is helping diversify his family business. After working with Atlas Cycles, he’s now giving Atlas Pharmaceuticals a shot.

He is heir to a 55-year old industrial legacy. But this Carnegie Mellon graduate believes diversification is the prescription for growth. This fourth generation entrepreneur has given Atlas Group of companies a booster shot by pouring into the pharma business. From cycles to drug formulation, at 22 years, Ashwin Kapur has his task cut out for him. With an initial investment of Rs 70 crore, he has set up a pharmaceutical manufacturing plant in Haridwar.

“We are providing many facilities under one roof. There are very few manufacturers who provide that sort of infrastructure. We have got very good testing and R&D laboratories,” he said.

Changing gears from cycles to pharma has been challenging. But he has got his hands firmly on the steering. He is hoping to accelerate and touch Rs 15 crore in turnover this year. His long-term view is to achieve a target of Rs 500 crore in five years.

With the launch of new products in the antibiotic, anti-acid, antioxidant and neutral growth segment the past 12 months has been a smooth ride for Atlas Pharmaceuticals.

“Phase-II will kick-off maybe in the next two to three years. At that time, we will be looking at different things. We may be adding some more manufacturing units. We will be looking at new international markets and maybe putting up an R&D centre of our own. In the next 12 months, we want our distribution network to be in place,” said Kapur.

A recent tie-up with Cipla is part of Ashwin’s strategy to establish Atlas as a premier contract manufacturer. He is now keen to pull his weight and take Atlas international. Ashwin will start by pushing Atlas’ products to Africa, the Middle East and CIS countries.

“The next thing is exports. So, we will be receiving our WHO certification within the next one and a half months. That is when we will be launching our exports division,” he stated.

Excerpts from CNBC-TV18’s exclusive interview with Ashwin Kapur:

Q: When you got involved with Atlas Cycles, it was a company that existed for over 50 years. But when you actually started something afresh; to have a manufacturing plant where every brick is being installed in front of your eyes. What is that like for you?

A: It’s been very exciting. We have a very professional team. The team has been in the pharmaceutical industry for the last 25 years and its been very good. It’s been like my baby and things are going forward quite well. We have a very solid and concrete strategy in mind. The requirement of medicines and drugs has been increasing and it’s going to keep increasing, whether we talk about India or about abroad. But the prices of drugs have also been increasing. So, there is a contradictory thing going on right now in the industry. That is something we are looking into very seriously and the technology we have at our manufacturing unit and the marketing strategy that we are looking into is to provide economically priced and good quality medicines for the consumers.

Q: What are the challenges, because the pharma industry and especially the generic market has been seeing margins being depressed for the last many quarters? It’s a hugely regulated business, you don’t know whether the government is going to put your drug under price control or not. It’s a long gestation business and hugely capital intensive. How are you thinking about all of these issues and battling them?

A: When we decided to venture into this industry, we were prepared for all the regulatory issues that are part of it. One has to look at it proactively. I can’t say that there is a fixed strategy in mind because one cannot always foresee what’s going to happen and what drugs are going to be put under Drug Price Control Order (DPCO), which is the price control. But that’s part of the industry.

Q: What about funding because you have already invested about Rs 17 crore to setup the plant in Haridwar? What kind of money are you talking about and where is the money going to come from?

A: This is phase-I of the project. We have already invested approximately Rs 70 crore. In phase-I, we will be looking at a total investment of Rs 100 crore. So, an additional amount of Rs 30 crore will be put in. In terms of financing, a major chunk of it has been done from us through the promoters. Part of it has been done through close friends and associates, through private equity and the remaining is financed through a financial institution.

Q: What has the response been like for you because it is a tough market to crack?

A: It is a tough market but the returns are very good once you crack into it. It takes some time. This is an ethical market, so we are looking at ethical branding of our products. It takes time and that is a part of it. But the response has been quite good. So, this is one thing we are looking into and right now we have a distribution network in Northern India. We want to expand this over the next 12 months to all India.

Q: When do you actually start seeing exports going on stream?

A: This will be as soon as we get the certification. Actually, we are already talking to a few countries. We are talking to about five countries already that we are looking to tie-up with and some companies abroad. We will be exporting again through the doctors and through prescription-based sales.

In phase-II of exports, we will be looking at the European market. Phase-III will be the US market. So, we are taking it step-by-step.

Q: Which is when you finally need to get the US FDA compliance and so forth?

A: Yes. For that, we will be putting up a smaller facility. This facility is one of the largest in Northern India, the one that we have already put up. For the US FDA, we will be looking at putting up a smaller facility only for the US market.

So, one is direct marketing that we are looking into launching our products in India. The second thing is the exports. The third thing is because we want to minimise the breakeven point. We are looking at contract manufacturing.