ET NowIn an interview to ET NOW, Rajiv Gandhi, CEO & MD, Hester Biosciences shares how there are no major plants in Africa that produce animal vaccines.
Edited Excerpts:
Can you tell us a little bit more about the $3 million investment being made in Africa?
Africa, according us has a good potential for various animal diseases besides the other diseases which are common across the globe. There are Africa specific diseases which have not been addressed to and also there are no major plants in Africa that produce animal vaccines. There are few government plants and less than five private plants, so we think that having a plant in the continent addressing specific African issues would give us a lot of mileage.
How will the investment be done and how do you plan to fund this investment?
We are still trying to fix up the project size which means the whole planning would take around a month, month and a half time. The equity that we hope to do is for US$3 million and it would be financed directly from our internal accruals Hester India. And this equity would be 100% ours, we are not expecting to take anybody as an investor along with us in this plant in Africa.
Now as you plan to manufacture animal vaccines and heath products in Tanzania do you think that the product will attract high margins more than 80% of required vaccines are currently imported into Africa?
The vaccines and health products that are being sold in the continent are at much higher prices than what they are sold internationally, so yes we would be able to have a higher realisation but our bigger strategy is to make the vaccines and health products available at international prices penetrate the markets. Rather than addressing a small market with a bigger margin we want to address a bigger market with the normal margins. With a normal international pricing thereby it even benefits the end user and we are at a level playing field as much as what we are in other countries.
When do you expect this investment to break even and start contributing to earnings?
As I said we are still planning. We are yet to even decide the exact project size which should happen in a couple of months.Once we start the planning and embark on the project, it would take approximately around 24-30 months to start the commercial production and we presume that the break should be in the second year of production.
Edited Excerpts:
Can you tell us a little bit more about the $3 million investment being made in Africa?
Africa, according us has a good potential for various animal diseases besides the other diseases which are common across the globe. There are Africa specific diseases which have not been addressed to and also there are no major plants in Africa that produce animal vaccines. There are few government plants and less than five private plants, so we think that having a plant in the continent addressing specific African issues would give us a lot of mileage.
How will the investment be done and how do you plan to fund this investment?
We are still trying to fix up the project size which means the whole planning would take around a month, month and a half time. The equity that we hope to do is for US$3 million and it would be financed directly from our internal accruals Hester India. And this equity would be 100% ours, we are not expecting to take anybody as an investor along with us in this plant in Africa.
Now as you plan to manufacture animal vaccines and heath products in Tanzania do you think that the product will attract high margins more than 80% of required vaccines are currently imported into Africa?
The vaccines and health products that are being sold in the continent are at much higher prices than what they are sold internationally, so yes we would be able to have a higher realisation but our bigger strategy is to make the vaccines and health products available at international prices penetrate the markets. Rather than addressing a small market with a bigger margin we want to address a bigger market with the normal margins. With a normal international pricing thereby it even benefits the end user and we are at a level playing field as much as what we are in other countries.
When do you expect this investment to break even and start contributing to earnings?
As I said we are still planning. We are yet to even decide the exact project size which should happen in a couple of months.Once we start the planning and embark on the project, it would take approximately around 24-30 months to start the commercial production and we presume that the break should be in the second year of production.
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