Dr Reddy's Laboratories Ltd
Company Analysis on Dr.Reddy's Laboratories Ltd- OTC Health care
Strategic Direction
·
Dr Reddy’s Laboratories will
look to expand further into OTC healthcare, an area in which it is currently
weak. With its strong R&D base, the company might look to expand in niche
areas, such as emergency contraception, or highly profitable ones, such as
dietary supplements. The company is also trying to become more environmentally
friendly by investing in sustainable development. This includes reducing waste,
conserving energy and increasing safety at its manufacturing plants.
Key Facts
Full name of company:
|
Dr Reddy’s Laboratories Ltd
|
Address:
|
Greenlands, Ameerpet, Hyderabad
500016, India
|
Tel:
|
+91 40 2373 1946
|
Fax:
|
+91 40 2373 1955
|
www:
|
www.drreddys.com
|
Activities:
|
OTC healthcare, generics, bulk drugs
|
Source: Euromonitor
International from company reports
Year end March
|
2005
|
2006
|
2007
|
Net sales (Rs billion)
|
24
|
65
|
50
|
Net profit (Rs billion)
|
1.6
|
9.3
|
4.68
|
Source: Company
research
Company Background
·
Dr Reddy’s Laboratories Ltd was
formed in 1984, in Hyderabad, India. The company initially started as a
supplier of bulk drugs to drug manufacturers in India, but soon expanded to
other markets as well. In addition, the company is active in diagnostic kits
and biotechnology products.
·
The company started
manufacturing branded formulations in 1986, and scored a big hit with its
flagship brand Omez, an H2 blocker. This marked the company’s move from a bulk
drug manufacturer to a fully-fledged pharmaceuticals company.
·
Today, the company exports its
products all over the world, to North America, Europe and under-developed
markets in Africa and the Middle East. The company is known to manage and
control its entire supply chain, from the manufacturing of bulk drugs to the
marketing of its finished formulations.
·
2008 saw a slew of launches
from the company. In January 2008, it launched Supanac, a diclofenac-based
systemic analgesic. The brand is claimed to be four times faster-acting than
ordinary diclofenac-based tablets. May 2008 saw the launch of Omez Insta. This
variant of Omez is in powder form and is flavoured for easy consumption.
Production
·
Dr Reddy’s Laboratories has
seven US FDA approved plants that manufacture bulk drugs, chemicals and
finished formulations. These are mostly located in Andhra Pradesh, in South
India. The company also has five manufacturing plants located outside India, in
Mexico, the UK, the US, and China.
·
Besides manufacturing, the
company has invested heavily in R&D. It has two technology development
centres, which help in the development of chemical molecules. It also has two
discovery centres which are in charge of new drug discovery.
Competitive Positioning
·
Dr Reddy’s Laboratories Ltd is
a marginal player in the Indian OTC healthcare market, having a value share of
1% in 2008. The bulk of the company’s revenues come from Omez, which holds a
value share of 20% in H2 blockers.
·
The company’s presence in OTC
healthcare is rather small, as most of its revenues come from
prescription-based products. The company’s focus has always been on marketing
prescription-based products, rather than OTC ones.
·
Within mineral supplements, the
company’s Becozinc brand is a prominent one, with a 7% value share. Due to heightened
awareness of preventive healthcare in India, the value share of this brand
increased by almost one percentage point in 2008.
Product type
|
Value share
|
Rank
|
H2 blockers
|
20.0%
|
2
|
Child-specific motion sickness
remedies
|
12.5%
|
2
|
Emollients/therapeutic moisturisers
|
12.0%
|
2
|
Mineral supplements
|
7.0%
|
4
|
Adult mouth care
|
6.5%
|
4
|
Source: Trade
press (The Economic Times, Business Standard, The Hindu Business Line), company
research, trade interviews, Euromonitor International estimates
