Cilicant Chem eyes Hyderabad’s desiccant industry potential

Cilicant Chem is eyeing Hyderabad market potential for its growth, informed Manish Jain, Managing Director of the company recently while addressing a press conference in the city. He disclosed that they are foraying into South Indian market through Hyderabad. The company has firmed up its plans to set up a marketing base at Hyderabad very soon, which will be their hub for the South Indian market.

Pharmaceutical desiccants are used to control the humidity and moisture inside the pharmaceutical packaging in order to increase the product’s shelf life. They aid by removing the moisture effectively from the container or bottle’s top surface when products are packaged.

In the light of rising chronic diseases, it is estimated to propel the demand for pharmaceutical desiccants. Increasing initiatives for safer drug delivery to end-users, the market is estimated to propel across the globe. On the back of growing pharmaceutical industry, the pharmaceutical desiccant market is anticipated to record a CAGR of 4.3 per cent over the forecast period.

The Pune based, the holder of Type III Drug Master File with USFDA, Master File with Health Canada, Cilicant Chem plans to expand its market significantly in Hyderabad. It is one of the fastest-growing active packaging manufacturers based in India.

“Hyderabad plays a dominant position in the pharma sector in India. It ranks first in manufacturing of bulk drugs and third in formulations in the country. It accounts for 40 per cent of the total Indian bulk drug production and 50 per cent of the bulk drug exports and is considered as the ‘Bulk Drug Capital of India’. This fact cannot be ignored by us. By expanding to Hyderabad and consolidating our marketing operations in the city, we would like to tap the potential of this market as part of the growth plan chalked for next couple of years,” said Jain.

Speaking further, he stated, “Hyderabad is one of the key markets for Cilicant’s growth. The state has made excellent inroads in the pharma sector and Cilicant endeavours to make a significant contribution and grow in this space. I have extended the product pipeline by adding desiccant canisters and oxygen absorbers. While the pharma sector is of immense importance, there is also scope for growth for the active packaging industry in non-pharma sector which is Rs 2,500 crore industry.”

Giving the overview of the industry, Jain pegged Indian pharma desiccant market size at Rs 500 crores. “India is the largest provider of generic drugs globally. Indian pharmaceutical sector industry supplies over 50 per cent of global demand for various vaccines, 40 per cent of generic demand in the US and 25 per cent of all medicines in the UK. Presently, over 80 per cent of the anti-retroviral drugs used globally to combat AIDS (Acquired Immune Deficiency Syndrome) are supplied by Indian pharmaceutical firms,” he added.

Medicine spending in India is projected to grow nine to 12 per cent over the next five years, leading India to become one of the top 10 countries in terms of medical spending. The pharmaceutical sector was valued at $33 billion in 2017. The country’s pharmaceutical industry is expected to expand at a CAGR of 22.4 per cent over 2015–20 to reach $55 billion. India’s pharmaceutical exports stood at $17.27 billion in FY18 and have reached $19.14 billion in FY19. Pharmaceutical exports include bulk drugs, intermediates, drug formulations, biologicals, Ayush and herbal products and surgical, he shared.

Speaking about their manufacturing capabilities, Jain said, “We are in the process of setting up our third manufacturing plant in Pune at an estimated investment of Rs 25 crores. Giving details about Cilicant’s performance, he said, it is expected to close FY20 with a turnover of Rs 45 to 48 crores, growing annually at 50 per cent every year. The company is profitable, generating earnings before interest, tax, depreciation and amortization of 24 per cent and upwards. Cilicant is targeting Rs 200 crores in revenue by FY2025.”

The company is open for PE funding.