DUAL STRENGTH

COM­PANY: Divi’s Lab­o­ra­to­ries AGE AND DES­IG­NA­TIONS: Ki­ran S Divi (40), Di­rec­tor (Busi­ness De­vel­op­ment) Nil­ima Mo­ta­parti (33), Chief Con­troller (Com­mer­cial)

Business Today - - COVER STORY - E. KU­MAR SHARMA

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.

HEADY GROWTH

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.

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