Hikal Company Analysis Report
Summary
- Hikal is a reliable outsourcing partner to many companies in the pharmaceuticals, crop protection and specialty chemicals industry. It has several long-term supply contracts with some of the leading life sciences companies such as Pfizer and Bayer Crop Science for the manufacture and supply of APIs and agricultural chemicals.
- Hikal's R&D group is mainly focused on developing efficient and sustainable processes for its existing and new products. Its discovery research, analytical method development, synthesis of impurities, scale-up and technology transfer enables it to develop new products for life sciences companies all over the world.
- Acoris, Hikal's contract research subsidiary in India, have already completed a number of projects with some of the leading global mid-size biotech and pharmaceutical companies, reflecting its established contacts in developed markets such as the US, Japan and Europe.
- In spite of global economic slowdown, Hikal recorded a significant y-o-y growth of 8.5% to reach $113m in FY 2010. Its pharmaceutical division posted the highest sales for the company registering FY 2010 sales of $75m at a y-o-y growth of 25.2%.
Company overview
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Table 16: Hikal snapshot
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Headquartered:
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Mumbai, India
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Established:
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1988
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Consolidated revenue (FY 2010):
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$113m
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Segmental revenue (FY 2010):
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$113m*
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Employees (2010):
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>900
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*Includes custom manufacturing business of both pharmaceuticals
and crop protection chemicals.Note: FY = Fiscal Year (April 01 to March 31)
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Source: Company information
Hikal,
a Mumbai based Indian contract research and manufacturing company, is a
reliable outsourcing partner to many companies in the pharmaceuticals, crop
protection and specialty chemicals industry. It collaborates with innovator
companies and offers solutions in contract research, custom synthesis and
custom manufacturing. Hikal has several long-term supply contracts with some of
the leading life sciences companies such as Pfizer and Bayer Crop Science for
the manufacture and supply of APIs and active ingredients respectively. Hikal's
advanced manufacturing facilities are cGMP compliant, ISO certified and
approved by some of the leading regulatory bodies in the world such as FDA. Its
areas of specialization include:
- Drug discovery research on a contract basis;
- Developing non-infringing processes and scaling them up from laboratory to kilo scale;
- Analytical method development;
- Custom manufacturing of active substances and intermediates for pharmaceutical and agrochemical companies across the globe.
Business segmentation
Hikal's
business is divided into two segments:
- Pharmaceuticals – This division supports the pharmaceutical industry from early stage to commercialization of new chemical entities;
- Agrochemicals/crop protection chemicals – Hikal also specializes in custom synthesis and contract manufacturing of agrochemicals, intermediates and specialty chemicals. Its strengths in process development, analytical expertise, pilot plant, basic engineering capabilities and process automation have resulted in long-term partnerships with some of the major crop protection companies in the world.
R&D focus
Hikal's
R&D group is mainly focused on developing efficient and sustainable
processes for its existing and new products. Hikal is a signatory to
‘Responsible Care’ initiatives at all its manufacturing sites which is an
effort to reduce the emissions of carbon-dioxide. Its discovery research,
analytical method development, synthesis of impurities, scale-up and technology
transfer enables it to develop new products for life sciences companies all
over the world. Hikal also made a significant investment in state-of-the-art
equipment and R&D developments, which have contributed immensely towards
energy conservation. In addition, Hikal has a dedicated contract research
facility, Acoris Research at a biotech park in Pune, which has a special focus
on chemical research and development.
Hikal
has several multipurpose research facilities in India. One of its recently
constructed new plant at Taloja, Mumbai, is commissioned for manufacturing only
patent protected active ingredients for crop protection. Other key sites
include:
- Mahad site –manufacture of intermediates for Taloja site;
- Panoli site – manufacture of small volume high value products;
- R&D center in Bangalore – focused on improving processes of existing products and developing processes for new products in its portfolio.
Financial performance
In
spite of global economic slowdown, Hikal recorded a significant y-o-y growth of
8.5% to reach $113m in FY 2010. Its pharmaceutical division posted the highest
sales for the company registering FY 2010 sales of $75m at a y-o-y growth of
25.2%. However, its crop protection division recorded a y-o-y decline of 14.2%
in FY 2010, which was mainly due to the inventory destocking issues faced by
its customers. Moreover, effective cost management measures coupled with the
increase in production volumes has helped it to boost its EBIDTA margins.
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Table 17: Hikal financial performance by segment ($m), FY 2010
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Division
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Sales FY 2010 ($m)
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Sales growth FY 2009–10 (%)
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Share of revenues FY 2010 (%)
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Pharmaceuticals
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75
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25.2
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66.6
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Crop protection
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38
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-14.2
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33.4
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Total
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113
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8.5
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100
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Note: All numbers were converted into $m considering an average
exchange rate for the fiscal year (i.e. in FY 2009, INR1 = $0.0218; in FY
2010, INR1 = $0.0211).FY = Fiscal Year (April 01 to March 31)
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Source: Company reports
Growth strategies
Long-term contracts with leading life sciences companies
Hikal
has several long-term contract manufacturing and supply agreements with some of
the leading pharmaceutical and agrochemical companies in the world. Some of the
major ones include Pfizer, Bayer Crop Sciences, Alpharma, Degussa. It has been
supplying key APIs, active ingredients and intermediates, using stringent
quality standards to customers in the US, Europe and Japan. Hikal's advanced
manufacturing centers have been inspected and approved by the leading global
players in the pharmaceutical and crop protection sectors. Acoris, Hikal's
contract research subsidiary in India, have already completed a number of
projects with some of the leading global mid-size biotech and pharmaceutical
companies, reflecting its established contacts in developed markets such as the
US, Japan and Europe.
Expansion of manufacturing base by adding new plants at its FDA site
Hikal
has a diversified presence across major geographies which are focused on
developing efficient and sustainable processes for existing and new products.
Its newly constructed multipurpose plant at Taloja is a dedicated R&D and
manufacturing unit for crop protecting chemicals. Hikal is also planning to
upgrade its Mahad site which would be able to manufacture additional
intermediates for sale in the domestic and other markets. Hikal have introduced
a new small volume high value product for a Japanese company in Panoli, where
the initial process development was done at Acoris. Moreover, as a part of its
future growth strategy, Hikal acquired additional land adjoining its FDA
facility in Bangalore. This would facilitate its future expansion for contract
manufacture of active ingredients.
