Spotlight

Sipra Emerging

Dr. Satyanarayana, Director Sipra Labs, speaks about his company's success story to Amal Tewari

Started in 1994 by Dr. Satyanarayana, Sipra Labs has thus come far with a present manpower of 200 employees and an accreditation by CRISIL as highest safety standards SME1; it has also been accredited by eminent bodies such as National Accreditation Board for Testing and Calibration Laboratories (NABL), US FDA, BIS, and DCGI.

Dealing with chemical products, the does analyses and stimulations; identify the characteristics of the chemical; and investigate dissolution, stability and interactions of the chemical. In the area of animal research, the Company does pre-clinical toxicology on animals to check for adverse effects such as organ damage due to overdose of drugs. For human formulations and products, Sipra Labs is involved in Clinical Trials, spanning Phase II, III and IV trials.

They have pioneered their research efforts by starting a beagle rearing and testing facility - a first of its kind in South India. Beagles are the preferred breed of dogs because of their standard size and their amiability towards humans.

Conducting Bio-Equivalence Studies, Sipra Labs caters to products ranging from brand new ones to ones that are four years old. Once a product passes four years in the market, human testing is not required anymore.

Sipra Labs also ensures the well being of the common man, by conducting Food and Beverages testing and analyses. F&B products are tested thoroughly, such as bottled water under BIS standards; packaged foods, candy and syrups; cooking spices; fruits and vegetables are tested for pesticide residues, especially ones that are exported. That apart they also conduct testing on milk, milk powder and egg powder.

Emerging India Awards

An estimated 3 lakh companies, in 12 different categories, were vying for the CNBC Emerging India Awards 2009. Sipra Labs held the honours in the Pharma & Chemicals category, which had over 20,000 applicants. Implementing a 3 phase system, CRISIL handled the screening process and based it on factors like Products, Financials, Upgrades, Investments, Management Quality and Growth Potential. Three finalists were picked by the jury and the final assessment was based on the question, "Why should you receive the award?" - A question which was answered by Sipra Labs in the form of their success story, right from inception through the years.

Success story

The beginning of Sipra Labs is credited to an unsatisfied, young soul, that of Dr Satyanarayana, which took up the challenge to meet an emerging opportunity. "Hyderabad was fast becoming the hub for active pharmaceutical ingredients (APIs), but still lacked laboratory facilities and skilled manpower; an urgent need was felt for a research facility in the city," says Satyanarayana. The ASFC came forward and lent its financial support to Satyanarayana's entrepreneurial spirit of starting his own venture; additional support from the pharma fraternity added to the encouragement this venture needed.

Satyanarayana shares, "Sipra Labs commenced in 1994, with just six employees, as an Analytical Lab, and journeyed its way through the pharma industry for a decade to start Pre-Clinical Toxicology, Bio Equivalence and Food Analyses in 2004; they introduced Clinical Trial Studies in 2009."

The success of their story is based on the business model of:

• A one-stop solution for all product developments
• Product research services from post-synthesis to pre-marketing
• In-House infrastructure for all types of services
• Customer specific, tailor-made project solutions
• Long term product development

Their operations have been approved by Department of AYUSH, for testing and authenticating ingredients in alternative medicines; their R&D facility has been approved by DSIR and has also received an ISO9002 quality certification.

With the facilities being upgraded every two years, and the infrastructure overhauled every five years, Sipra Labs ensures that they keep up with the latest trends in technology and the industry; the continuous upgrading also keeps them abreast with regulatory compliances. "With an investment of Rs.18 crores, Sipra Labs is upgrading its Toxicology facility along with adding the beagle dog facility. The Food and Beverages department is being upgraded to a National level laboratory - a project worth Rs.12.5 crores, which has neared 85 percent completion," says Satyanarayana.

With a portfolio consisting of 15 percent international clients, Sipra Labs is aiming to achieve a turnover of Rs.65 crores, with a profit of Rs.34 cores. The company has impressively maintained this record of achieving turnovers comprising 50 percent of profits alone.

Going green

"We are doing our bit to reduce our carbon footprint. The use of paper has been limited and we have lowered our consumption of power," says Satyanarayana. Well designed to best utilise natural light, the facility at Sipra Labs also has solar powered fencing and a novel water cooled air-conditioning system that circulates cold water through the fanning system with 30 percent less power consumption.

No recession blues

The company managed to be virtually 'recession proof', maintaining high Profit Before Interest, Depreciation & Taxes (PBDIT) and profit margins. Satyanarayana elaborates, "We maintained low debt and equity, with a debt commitment of less than 40 percent of accrued cash. Recession did not much affect us due to the strong domestic market and our low dependency on exports. Plus we held high liquid assets and practised good tax management." Sipra Labs also received encouragement and support of the government through 10 year tax exemptions offered to research companies and the exemption from import excise duties.

Future plans

Sipra Labs plans on maintaining its strong financial position with continued low borrowing wherever possible. Satyanarayana said, "We are striving to best utilise the non-volatile funding for 10 years granted by the Department of Science and Technology (DST) and the tax breaks from the state government". Planning for the future also requires them to maintain lower operating costs and higher margins, along with placing equity at the appropriate times to their investors.

amal.tewari@expressindia.com