COMPANY: Divi’s Laboratories AGE AND DESIGNATIONS: Kiran S Divi (40), Director (Business Development) Nilima Motaparti (33), Chief Controller (Commercial)
Kiran Divi and Nilima Motaparti are under the spotlight. Indeed, all eyes are on the son and daughter of Divi’s Laboratories founder Murali Divi after the US Food and Drug Adminis-tration or USFDA recently issued a warning letter to and import alert on the Vishakapatnam plant of the company. Kiran and Nilima have been driving change at the pharma major as it aims to become one of the largest manufacturers of active pharmaceutical ingredients or APIs in the world.
The import alert is the first major regulatory hit on the company since inception in 1990. The immediate impact is not expected to be huge as the USFDA has exempted some products manufactured at this plant. However, it can lead to future uncertainty. It could be from customers who as part of risk-mitigation may look to source these products from elsewhere. Also, other units of the company could also later come under intense watch of the USFDA.
While demands of internal housekeeping have made company officials spend more time looking inwards, Business Today had spoken to Kiran Divi, Nilima Motaparti and Murali Divi before the heat from the US regulator set in. The enthusiasm was palpable. “From being the largest API maker in India, our goal is to be one of the largest API makers in the world,” said Murali Divi, soon after shifting to the swank new office in Hyderabad’s IT hub Madhapur last year. That is the goal set by Divi for his children.
The Madhapur office is a symbol of heady growth. Divi’s, with `3,816 crore in revenues during FY2015/16, had spent `100 crore on the new office. Murali, who was part of Dr Reddy’s Laboratories founding team, broke away from founder K. Anji Reddy to set up Divi’s in the 1990s. For 25 years, he operated out of a functional office in Ameerpet, close to Dr Reddy’s corporate office which has also moved into an office on the tony Banjara Hills Road.
“This building is an exception. Our father is the kind of person who would first invest on the lab and then the office,” says Kiran Divi, a Masters in Pharmacy. Nilima Motaparti, who has Masters in International Business from Gitam Institute of Foreign Trade, Visakhapatnam, and Masters in International Finance from Glasgow University, UK, adds: “Our father has always told us we may be cash rich and may have no loans but we still need to spend and think like a small company.” Post the import alert, Divi’s market capitalisation almost halved.
Kiran, a firm believer in health and fitness, leads the company on matters relating to quality control, research, operations, process improvements, regulatory submissions and even HR. He is seen as someone who likes to spend most of his time and resources on quality and manufacturing best practices. He has focused on putting in place
“stage-wise process automation for several products”. Nilima Motaparti, Chief Controller – Commercial, handles finances and matters related to procurement. Right from her graduation days – around 1999 – Nilima used to work as a trainee at Divi’s and spent most of her time with CFO, L. Kishore Babu, understanding the nuances of finance. When Kiran joined in 2001, the company had only 401 employees. Today, it has around 10,000 employees. Nilima joined officially in 2012 and has been trying to de-risk sourcing, building a base of alternative suppliers and entering into long-term procurement contracts for better price negotiations. One of Kiran’s priorities is grooming the next line of leadership – the 3G, as they call it (third generation, with the brother and sister as the second genera- tion). The company does not believe in lateral recruitment and hires from colleges.
Kishore Babu explains that Kiran and Nilima are trying to ensure that Divi’s is ahead of the learning curve in terms of chemistry and chemistry capabilities. “It is not China but Europe that is competition to us. We benchmark us against American and European multinationals,” he says. But to get there and make a bigger dent, it needs to make the most of this inward focus now to get regulatory compliance issues sorted out.