7 June 2002, The Economic Times

ARL organizational revamp complete

V.Balasubramanian


Chennai-based Rs.104 crore Arvind Remedies (ARL) has completed a major organizational restructuring to prune cost and generate more business. It has re-engineered its products and re-vamped marketing and
distribution. ARL is scouting for acquiring a biotech facility besides good brands in ethical products. Even while upgrading its existing facility at Kakkalur near Chennai, ARL plans to set up a Rs.50-crore facility conforming to the standards of US FDA, UK MCA and TGA Australia.

Mr.Arvind Shah, Managing Director, said, ·In the last 13 years, we were largely focusing on Indian market. We have set our vision to become a global player in the pharma industry both in allopathy and ayurveda.·
He said, ·We will be stepping up the OTC market as well as direct sale of generic products to chemists.The company is also targeting big exports to markets like Africa, Asia and CIS countries. It is targeting a turnover of Rs.207 crore by 2003-2004 and PAT of Rs.12.57 crore. During the year ended March 31, 2002, turnover touched Rs.104 crore, up by 24% over Rs.84.52 crore in 2000-01. Though PAT improved to Rs.5.1 crore
(Rs.3.32 crore), provision for the new deferred tax would calim Rs.1.5 crore. In the Rs.7.43 crore equity, Mr.Shah holds 38% stake. The rest is with his friends and public.

Mr.Shah said beginning this fiscal, ·the company had restructured ethical marketing by removing three layers. Also, the number of doctors called on
by each medical officer will go up from 150 to 250 per month. This will make our marketing cost effective, expand market coverage, generate more business and improve our bottomline, he said.

ARL has 258 branded and generic products. Now, as part of focused marketing, it has re-engineered the portfolio by slashing the brands to 25 from 50. The rest have been moved to generic category. It will also
focus on promoting 10 mega brands. On the distribution front too, Mr.Shah said the company has trimmed the chain to restrict the overall commission to 36% against 42% earlier. Under the new system, it has one away with super stockists.

Chief Financial Officer R Karthikeyan said ARL has reduced interest cost by 3-4% with its banker, SBI converting Rs.15 crore out of Rs.18 crore working
capital into FCNR (B) loan. It is also working on a similar deal for its Rs.8-crore term loan.