LUPIN TO MAKE BRAZIL A LATIN AMERICAN MANUFACTURING HUB

Lupin plans to develop its Brazilian operations into a manufacturing hub for the Latin American region.

Most neighbouring countries there recognise the Brazilian drug regulator’s approvals. Latin America contributes about 4 per cent to Lupin’s global revenue and this is expected to double to around 8 per cent over the next five years, said a senior official. Martin Mercer, president for Latin America, said the aim was to start exporting from Brazil next year. “We depend on manual packaging. We are now installing new equipment and working on augmenting the capacity. We plan to export to countries in the region from Brazil.” SOHINI DAS writes

Lupin, the pharmaceuticals major, plans to develop its Brazilian operations into a manufacturing hub for the Latin American region. Most neighbouring countries there recognise the Brazilian drug regulator’s approvals.

Latin America contributes about four per cent to Lupin’s global revenue and this is expected to double to around eight per cent over the next five years, said a senior company official.

Martin Mercer, its president for Latin America, said the aim was to start exporting from Brazil next year. “We depend on manual packaging. We are now installing new equipment and working on augmenting the capacity. We plan to export to countries in the region from Brazil.”

Apart from India and Mexico, Lupin does not export drugs from any other country at present. Some Latin American countries where it exports now from India and partly from Mexico are Chile, Colombia, Cuba, Dominican Republic, Haiti, Guatemala, Honduras, Panama, Peru, and Venezuela. With most Latin American currencies devaluing against the rupee, export from India would be taking a hit.

Mercer says with production in Brazil, they’d be able to compete in government tenders at attractive prices. Its pplant there can make 200 million tablets or around eight mn packs every month. The current capacity utilisation is around 80 per cent. Brazil accounts for nearly 35 per cent of sales in Latin America; it is also the world’s sixth largest pharma. Together, Brazil and Mexico account for nearly 70 per cent of Latin American revenues for Lupin.

Brazil has high import duties on finished pharma products, which is why Lupin had started manufacturing in that country. Its Brazilian subsidiary, Medquímica, was acquired in 2015 for its strong manufacturing platform. Medquímica grew 25 per cent in value in 2017-18, with sales double the market rate. It launched 11 products and had filed 15 for launch in the coming years. The company also inaugurated an automated warehouse that doubles its capacity.

The company’s Latin American business grew 28 per cent in FY18.

From among Indian majors, Torrent Pharmaceuticals has a strong presence in Brazil. Against Lupin’s $88 million of sales in FY18, Torrent had $110 million. Mercer says they expect to close the gap in FY19. Torrent does not export from Brazil.