export management economics (2)

8/3/2019 Export Management Economics (2)

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1

Export Management Project

Economics

A study – Wanbury Ltd (Export oriented

company specializing in API- Active

pharmaceutical ingredient)

Name- Somesh Chandran

Class- TYBA

Subject - Economics

Division- B

Roll No. - 3381

E mail – [email protected]



2

Certificate.

This is to certify that Mr.Somesh Chandran – Class TYBA- Division B has completed

the project under the guidance of his class teacher- Miss Varsha Malwade.

I hereby confirm that the following work is my own work and is authentic. Any

similarities observed in the following work are merely coincidental. The following

draft is my final draft.

Signature-



3

Acknowledgements

I have taken efforts in this project. However, it would not have been possible without

the kind support and help of many individuals and organizations. I would like to

extend my sincere thanks to all of them.

Deepest thanks to my class teacher Mrs.Varsha Malwade for guiding me during the

course of completing this project and also for correcting the rough draft with affection

and care.

I would also like to express gratitude to Mr.Shreyan Maralur-Manager(Strategy) and

Mr.Anand Dhoka ( Deputy General Manager-Commercial) for their guidance as well

as for providing necessary information regarding the project.



4

TABLE OF CONTENTS

1. Introduction……….…………………………………………………………………………………5

2. Products………………………………………………………………………………………………..6

3. API overview………….……………………………………………………………………………….7

4. Types of markets……..……………………………………………………………………………10

5. Exim policies………..………………………………………………………………………………….11

6. Marketing strategy…………..……………………………………………………………………….12

7 Pricing strategy …………………………………………………………………………………………15

8. External and internal challenges………………………………………………………………16

9. Financial achievements……………………………………………………………………………..22

10. Market share…………………………………………………………………………………………….23

11 Increase in exports.…………………………………………………………………………………24

12. Methodology……………………………………………………………………………………………..25

13. Expansion…………………………………………………………………………………………………27

14. Balance sheet………………………………………………………………………………………….28

14.Conclusion………………………………………………………………………………………………..29

15.Bibliography………………………………………………………………………………………………30



5

Introduction

About Wanbury-

Wanbury Limited came into existence with the merger of the two companies –

WANDER and PEARL ORGANICS:

Wander Ltd.is an internationally known ethical branded formulations marketing

company, founded in 1865 by Dr. George Wander in Berne, Switzerland with

considerable presence in the Indian market.

In 1990 a company was established as Pearl Distributors Pvt Ltd. The company went

public and was renamed as Pearl Organics. It was an active bulk drug company with

major presence in the international market.

In 2004 the two companies amalgamated. The two entities are now functioning as

the independent business units of Wanbury Ltd., providing value to its customers

and shareholders.

In 2006 Wanbury became the world’s largest producer of Metformin with production

of 4500 metric tonnes

In 2007 Doctor’s organic chemicals merged with Wanbury.

In 2008 Wanbury was rated as the fastest growing company among top 100

companies as per ORG-IMS



6

Products of Wanbury

Active Pharmaceutical Ingredients-

Wanbury is the largest manufacturer of some of its products which include

Metformin, Tremadol and Salsalate for the U.S market. Wanbury caters to more than

50% of the U.S market in these products and exports to over 50 countries. Wanbury

sells to leading global generic players in the regulated markets such as Apotex, Teva

, Mylan etc.

It has two approved product patents to its credit namely Sertraline Hydrochloride and

Carvedilol. Wanbury has applied for 5 product patents and 1 process patent and has

a basket of 20 API products which include-

Metformin ( Anti diabetic)

Tramadol ( Anti analgesic)

Gabapentene ( Anti-epileptic)

Sertraline (Anti-Depressant)

Diphenhydramine hydrochloride (Anti histaminic)

Diphenhydramine citrate (Anti histaminic)

Meganemic acid ( Anti-inflammatory)

Atenolol ( Anti-hypertensive)

Salsalate ( Anti-inflammatory )

Metformin: #1 Globally with sales of Rs. 108 Cr and 34% global

market share

Tramadol: #1 US with sales of 47 tonnes and 40% market share at

current run rate

Salsalate: #1 US practically sole suppliers



7

API (Active Pharmaceutical Ingredients) Overview.

The Company continues to remain the largest manufacturer of

Metformin in the world with over 30% market share.

Another product Tramadol has also been in high demand especially in

American markets.

Over the latter half of the financial year the Company would have

catered to substantial share of the US requirement for Tramadol. This

has happened as a result of significant cost competiveness of its

product and continuous business development efforts with its

customers.

Domestic supplies of the products especially Metformin is gaining much more

importance now. There is an increasing trend, especially with big international

pharmaceutical companies to get their requirement contract manufactured in

India.

Some of the Indian Pharma Companies are also taking strong positions in

regulated markets. Therefore the need for an API is showing increasing trend

in domestic market.

FY10 posed a number of challenges to the Company. One of its major

regulated market customer stopped purchases after the first quarter. The

contract manufacturing agreement of an intermediate for a big multinational

company came to an end during the year.



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The Company has still managed to generate comparable sales to the

previous year by better focus on other products, customers and

Markets. However from a profitability point of view this situation has resulted in

lower margins.

The Company had expected revival of its Metformin business in

America. Wanbury expects a key customer to resume the business in

2011-12 which will further strengthen the Company's market share.

The Contract Research and Manufacturing (CRAMS) business did not

perform as planned. No new business was generated during the year

Company hence was forced to close down the foreign office in Europe

and to scale down its R&D team to keep expenses under control.

Some top management personnel left the Company during FY10-11. Apart

from that the Company also ran into tough financial problems and had to

admit itself into Corporate Debt Restructuring.

New management came in the latter half of the year and has started working

on a turnaround strategy to reinvigorate the API business and take it to new

heights. The new management has cost reduction as one of its prime focus

areas so that the Company continues to make profit in a generic market with

high competition and reducing prices.



9

The Company plans to look at automation as a solution to ensure

higher quality material to its customers. The Company has initiated

plans of increasing manufacturing capacity at Patalganga with limited

capital investment. This is being achieved by realignment of the

manufacturing area.

In FY11-12 the Company is targeting to increase its API sales by ~20%. A

significant part of this increase is expected from Metformin and Tramadol.

Plans are being formulated to further increase Tramadol manufacturing

capacity so as to meet additional requirements from other regulated

customers.



10

Types of markets

Wanbury caters to mainly 3 types of markets. These markets exist throughout the

world. The company has a strong presence in regulated markets such as U.S,

Europe and Australia. It also has a considerable presence in non-regulated markets

such as Latin America (Brazil, Argentina) and Middle Eastern countries (Saudi

Arabia, Iran)

Achievements of Wanbury in these markets-

Supplier of choice to top generic players in US and Europe Adjudged as best vendor in south east Asia by the largest MNC for API

business. Renewed USFDA approvals for both locations in the current yea



11

The Government Export-import (Exim) policies which are

applicable to the company

Wanbury makes use of various export incentives like

Advanced licence

Duty Entitlement Pass Book

Duty Draw Back

Along with this the company is exempted from Excise for all products which are

manufactured for exports. The company is also eligible for VAT refund as per

Maharashtra sales tax laws. E.g. - For exported items and interstate sales.Since the

company exports various products/bulk actives, the export policy has defined ratiosfor inputs for different products. T

he inputs for each product vary and after studying the defined input ratios for

different products, the company’s commercial department has decided to use the

export incentives differently for different products.

The company uses the Duty Entitlement Pass Book route for their main product –

Metformin. It uses the Advance licence route for another product- Tramadol. Since

the input prices would vary based on global prices for raw materials the company

reviews its export policy every 3 months in order to calculate the benefits with the

corresponding input prices for different products.

Regulations the company is subject to

Wanbury is subject to various regulations such as The Food and Drug Administration

(FDA or USFDA) approval (India), PCB (pollution control board), DISH (directorate of

industrial safety & health), and MIDC/APIDC (State industrial development

corporation).Since the production of these products involves various hazardous

elements certain licenses are also required for boiler usage, hazardous chemical

usage, explosive material usage etc. Additionally, plants are subject to audit &

approval by International customers as well as country/region specific regulatory

authorities (USFDA etc.) The USFDA is very stringent regarding the workplace

conditions and hence the company has to take utmost care with regard to its work

environment and safety standards.



12

Marketing strategy

Wanbury adopts three main marketing strategies.

Below the line promotion strategies adopted by Wanbury.

Participation in trade fairs (Convention on Pharmaceutical Ingredients) –

(CPhI) - Wanbury participates in trade fairs in order to promote their products.

Facts and figures

About CPhI / P-MEC India 2010 and co-located events:

26,436 attendees from 86 countries, including 1,433 international visitors

Over 71% of visitors are decision makers

86% of visitors are very satisfied or satisfied

Conference program: 36 speakers and 12 modules

The company participates in such trade fairs since it offers a very good opportunity

to reach a large number of potential buyers in one convenient setting. It gives the

company a chance to show how the product actually works. Consumer reaction to

the product is tested before it is released onto the market which is of paramount

importance.

The consumer reaction at trade fairs gives an idea to the company with regard to

whether it should launch the product for widespread use or not. This saves a lot of

time and money. Such trade fairs allow potential customers to discuss a product with

members of the management team, which can be a valuable point of contact.

Technical and sales staffs are also available to answer questions and discuss the

product. Hence the advantages are plenty when it comes to participation in trade

fairs. Wanbury is able to tap various potential customers through such fairs and

effectively expand their clientele



13

Direct marketing

Wanbury also engages in direct selling to generic buyers. Mr.K.Chandran (Vice

Chairman) considers this as a “dynamic marketing approach in the distribution

of products ”.

Why Direct Marketing?

In Mr.Shreyan’s (Manager Strategy) words “Because this permits you to generate

reactions from your target consumers, making you able to focus on your

business. This can get you to use your limited marketing resources where they

can be able to give you the results you need. It can also increase loyalty, bring

back old consumers and generate a new business all through the practice of a

direct marketing campaign ”

This is a personalized marketing approach. Generally the more highly priced and

complex the product, greater is the need for direct selling.

Wanbury has its own stall in buyer-seller meets like CPhI. This trade fair is heldevery year in different countries. In this case Wanbury is involved in the sale of

Active Pharma Ingredients (API) which is highly complex in nature. It conducts direct

marketing since individual buyers can be given personal attention. The company

sets up meetings with potential buyers and carriers out PowerPoint presentations

regarding product information.

Wanbury chiefly focuses on developing a relationship with the potential buyer and

ultimately attempts to “close the sale”



14

Sales through Commission Agents

Wanbury is also involved in sale of products through commission agents. In

countries where Wanbury does not have relationships it appoints agents who have

contacts in respective countries. In such a case the commission agent represents

Wanbury on the selling end of the deal and uses his wide reach of contacts to set up

deals for the company with potential buyers.

The commission agent gets 1-2% of the total revenue obtained from the deal.

He/She signs a contract with Wanbury generally for a period of 1 year but sometimes

is also extended to 3 years.

The commission for the sales agents is country and company specific. For e.g. – The

agent is solely responsible for setting up deals in a certain country like Spain. Also if

he has certain contacts in a company then he is solely responsible for setting a deal

with that particular company.

There are rules and regulations which the agent must adhere to. He may represent

another company simultaneously but cannot represent Wanbury and a second

company for the same product.E.g- Wanbury sells Metformin (API). The agent can

represent only Wanbury with regard to sale of Metformin.



15

Pricing strategies

Cost leadership strategy- Wanbury firmly believes in superior profits through

lower costs. Here the influence of cost is the most important factor. This

strategy involves reducing cost at every opportunity.

The firm believes in producing and marketing a good quality product at a lower cost

than its competitors. It produces on a large scale and thus is successful in striking

good deals with the suppliers for raw materials and other important inputs. This

strategy allows the company to gain a competitive advantage over its competitorssince low costs allow lower prices to cancel the margin of the closest competitor.

Cost Reduction Initiative

The Company has hired an experienced cost management consultant to analyse the

avenues of cost reduction in purchase of Inventory from the suppliers. In addition the

Company has also employed a supply chain professional to streamline the present

purchase process and renegotiate terms with suppliers.

Wanbury’s Cost leadership strategy is based on the following-

Size – Economies of scale E.g. - 8000 Tonnes of Metformin (Anti diabetic) per

annum, making it the largest manufacturer in the world. It has a 35% market

share of the world.

Greater labour efficiency and effectiveness and low cost labour - Wanbury

uses contract workers to reduce labour costs.

Control of overheads

Superior management

Low cost production

Using cost effective processes to reduce costs and enhance productivity

Favourable access to low cost sources of supply ( Wanbury has strategic

relations with suppliers of raw materials in China)

Greater operating efficiency and effectiveness



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As Mr Shreyan (Manager Strategy) appropriately put it “Cost leadership does

not mean necessarily selling at the lowest price. We sell at the industry

average price but enjoy above average profits through low cost production.

Wanbury firmly believes in the “Cost Leadership” strategy since –

It enjoys above average margins ( The firm exports to high margin

countries like U.S.A and Europe)

It is able to defend its market share effectively in spite of stiff

competition

The “Cost Leadership” strategy adopted by Wanbury also helps in

increasing market share.

External and internal factors affecting Wanbury-

As any other business, the company is subject to various risks and threats. The key

risks/threats are as follows-

Competition

Wanbury operates in a very competitive environment and hence pricing remains one

of the paramount factors that determine the performance of the company. The

Industry has excelled in the field of innovation, cost leadership, reengineering, quality

and range of products offered making it one of the most competitive and lucrative

industries. In the API (Active pharma ingredient) sector, the company has been

successful in facing stiff competition by influencing prices since it is the market

leader for Metformin in the world with around 35% market share. Wanbury’s main

competitors in the market are

USV Pharmaceuticals

Harman Finochem Limited

Aarti Drugs

Aurobindo Pharma



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The Company has always been focused on innovation not only on product launches

but also on strategic initiatives to help improve the sales and the overall health of the

Company. Wanbury has also considerably diminished the risk from competitors by

diversifying its product portfolio and also launching new value added products. This

has given Wanbury the edge over its competitors.

Increase in market price of key products and raw materials-

Rise in the cost of petroleum affect Wanbury’s operations. Raw materials used in the

factory require petroleum as the primary base for production. Rise in the price

petroleum leads to rise in the cost of raw materials like

Dicyandiamide (DCDA) and Di-Methyl Amine Hydrochloride (DMA HCl) which are

petroleum based products. This squeezes the margins that are achieved by the

company. Last year the price of DMA-HCl increased by 40% from 45 Rupees to 72

Rupees.

DCDA constituents about 40% of Wanbury’s cost. During the Olympics held in

China, the Chinese government took stringent measures to reduce pollution in the

country. In order to do so the government closed down the DCDA factory and thiscaused various problems to Wanbury since 90% of the company’s DCDA

requirements comes from China. This shot up the price of DCDA by 50% thus

affecting the company’s margins.

Indian Rupees – U.S Dollar Exchange Rate.

As the share of exports to total sales made by the Company is considerable, it is

prone to losses due to exchange rate fluctuations; however, the Company has

hedged its exposure to a large extent thereby reducing the risk.

A fluctuation in the exchange rate also upsets the company’s margins. Appreciation

of the rupee results in lower inflow of dollars. In 2009-2010 Wanbury hedged its

exports by buying derivatives. It assumed that the rupee would appreciate. In reality

the rupee depreciated thus resulting in huge losses. The company incurred a loss of

42 crores. However the company does not have any open derivatives at present.



18

Government Policy

The government gives various export benefits to the company like Duty Entitlement

Pass Book (DEPB) Scheme and advance licences. Any change in the policy of

issuing these benefits affects the company’s margins. Currently the government is in

the process of doing away with the DEPB scheme benefits to the company. Since

Wanbury operates in the international market, it is at a disadvantage compared to its

international competitors due to such obstacles.

Increased costs due to capital investment in plants

The Active pharma ingredient (API) is capital intensive in nature. Reactors and other

equipment’s suffer wear and tear and corrosion because of the persistent use of

chemicals. The reactors and equipment’s have to be replaced every 7-10 years. In

order to increase production capacity and introduce new products, the company has

to incur addition capital expenditure. Wanbury is a fast growing company and hence

has to borrow in order to finance its operations. In the process of servicing the

interest, there is a strain on the company’s margins.

Patents / IPR

The success of the Company depends largely on its ability to obtain patents, protect

trade secrets and other proprietary information and operate without infringing on the

proprietary rights of others. The Company has a dedicated Research and

Development team that continuously innovates and remains competitive by

developing / acquiring ability to sort out simple and effective solutions to practicalproblems. The Company has a team of highly competitive scientists supported by

excellent instrumentation.



19

Regulatory

Manufacturing of pharmaceutical products is heavily regulated and controlled by

regulatory and government authorities across the world. Failure to fully comply with

such regulations, could lead to stringent actions from the authorities/ government.

Regulators across the world, including the USFDA, have become stricter with the

pharmaceutical industry.

Human Resource

International Formulations Business - Cantabria Pharma

Like the last year FY 11 has been another tough year for the European markets and

Spain was no exception. Pharmaceutical industry in Spain has consistently been

held back due to price cuts enforced by the Government and due to competition as a

whole.

Over the last year there have been further price cuts which have hampered the sales

of the Company. Although the sales in volume terms have only been rising the

Company has not been able to make up the loss in sales value to offset the fixed

costs and hence was not able to break even last year.

Steps taken to overcome the issue

Several initiatives have been taken to counter the situation and loss in margin due to

price cuts has been partly offset by the reduction in cost of material. Other initiatives

that are being taken to improve the overall position of the Company are as follows:

Business Development / New Product Launches

The Company has always been focused on innovation not only on product launches

but also on strategic initiatives to help the sales and the overall health of the

Company. One such initiative that the Company has explored over the last year has

been to look at new sales channels and new areas of business development.



20

The Company is in the process of hiring sales agents to the sell its products in

Spain. Sales done through this new sales channel provides the Company with two-

fold advantage:

_Greater geographical coverage: The agents are spread across Spain and would be

able to provide better coverage and support our products better.

_Reduction in manpower cost: Agents work on commission basis as a fixed

percentage of sales over and above the initial set up cost. The initial set up cost is

very nominal and the commission model ensures that the Company would have to

pay if and only if the sales happen reducing the overall manpower cost.

_Human Resource Initiatives: In order to improve productivity the Company hasfurther reduced the sales force from 63. This number would further go down with the

commissioning of the sales agents thereby further reducing the manpower cost.

Cost Reduction Initiative

Over the last year the company has extended its efforts to reduce costs as a whole

to increase profits thereby increasing the cash available for investment in business

and provide higher returns for the investor. Some of the significant cost reduction

initiatives undertaken by the Company are as follows:

Rollout of travel and hotel policy - Wanbury has tied up with Thomas Cook as the

sole vendor for providing service related to domestic and international travel and also

for hotel bookings. This initiative is expected to reduce costs for Wanbury to the tune

of Rs. 2 Crores per annum as a result of economies of scale and tying up with a

vendor with a pan India presence and better capabilities. Also, the costs are

expected to reduce by better implementation of travel policy which ensures that the

bookings are done well in advance to get the cheaper rates.

Implementation of Standard Fare Chart (SFC) and Standard Tour Plan (STP) - For

our employees in the field the SFC and

STP have been rolled out which ensures better control for outgo of expenses

governed by the standard rates.



21

Process Improvement

One of the most important parts to creating a sustainable and healthy business is to

have efficient and robust internal processes which support the business owners. The

Company has taken a number of steps to improve and establish best in class

support systems.

Some of the key steps taken by the Company across areas are:-

Sales Admin - A dedicated sales admin team for each of the formulations division to

ensure quick response time and support for the field force.

Distribution - New distribution head has been recruited to implement industry best

practices with focus on reducing breakage and expiry returns by better supply chain

management.

IT - New systems and processes have been put in place to support the field, plants

and HO to ensure timely and correct data to the internal customers.

HR - HR processes have been revamped to reduce the TAT (turnaround time) for

recruitment and induction in the Company

Human Resource Risk

The Company's ability to deliver value is shaped by its ability to attract, train,

motivate, empower and retain the best professional talents. These abilities have to

be developed across the Company's rapidly expanding operations. The company

continuously benchmarks HR policies and practices with the best in the industry and

carries out the necessary improvements to attract and



22

Financial Achievement

From the picture above, one can conclude that the financial health of the company is

very good. The compound annual growth rate of the company has increased by an

impressive 42% over 5 years.

There has been a dip over the last few years but the overall the company has shown

strong signs of growth over the years.



23

Wanbury continues to dominate the market share for its products Metformin and

Tramadol. It relies heavily on these products due to its large market share and ever

increasing demand for the product, both domestically and internationally.

Over the next 2 years the company aims to further increasing its market share in

these products and is fully focused on achieving this goal. It has plans to increase

production capacity in order to meet ever increasing demand. It also has plans to

enter untapped markets and take full advantage of the optimum situation.

Wanbury Focused on Market Leadership (in volume terms)

34%

5%

12%

34%

Diphen

Hydramine

Sertraline

Tramadol

Metformin

FY 10 GlobalMarket Share FY 14 Global

Market Share

60%

22%

28%

55%

DiphenHydramine

Sertraline

Tramadol

Metformin



24

How Wanbury increased its exports.

The company started manufacturing metformin an anti-diabetic at its Patalganga unit

and selling domestically and exporting to non-regulated markers. It soon realised

that these markets were purely price driven and there was no customer loyalty.

However regulated markets were looking at quality and these were more long term

contracts. However entry into these markets (Europe, U.S.A, Australia etc.) required

FDA approvals from the respective countries.

The regulated markets have higher realization and therefore more profits. It was also

seen that regulated markets comprised of more than 60-70% of the world market.The company therefore decided that if it has to grown in exports and make higher

margins it had to export to regulated markets. This required unit to be approved by

respective FDA of these countries.

This required higher standard of manufacturing and equipment’s. The company

embarked on an ambitious plan to upgrade its unit as per Europe and USFDA. In 2

years’ time the company got approval from USFDA. THIS opened up the market of

us and Europe. The company’s exports increased manifold after thus approval.

Large generic players like Apotex, Teva, Barr, Milon etc. started buying products

from Wanbury. This was the trigger for increasing its exports. The European and

usfda approvals were of paramount importance to increase exports.

This success encouraged the company to expand its product portfolio and started

manufacturing products like Tramadol, Gapapentine, sertraline etc.

The company saw great opportunities in growing CRAMS business. In this directionthe company did not have relationship with innovator companies like Glaxo,Pfizer.

The company acquired a manufacturing unit in Taanku near Vijawada. The company

Doctor’s organics was already involved in crams business with Pfizer. To get an

entry into this business the company acquired doctor’s organics. With this company

made a presence in the market. Companies like Novartis, Johnson and Johnson

started buying from Wanbury.



25

Methodology/process of export

The export process is made more complex by the wide variety of documents that

the exporter needs to complete to ensure that the order reaches its destination

quickly, safety and without problems.

These documents range include those required by the authorities (such as bills of

entry, foreign exchange documents, export permits, etc.), those required by the

importer (such as the proforma and commercial invoices, certificates of origin and

health, and pre-shipment inspection documents), those required for payment

(such as the Reserve Bank forms, the letter of credit and the bill of lading) and

finally, those required for transportation (such as the bill of lading, the airway bill

or the freight transit order). Documentation requirements for export shipments

also vary widely according to the country of destination and the type of product

being shipped.

Once the product is manufactured it is packed in HDPE/Fibre drums. The local

customs department is informed who come for an inspection of the goods. Once it is

expected the goods are loaded into containers FCL/LCL depending upon the

quantity/Number of drums. This is then taken by trucks to the nearest port. JNPT for

Patalganga & Tarapur plant. Chennai port for Tanuku plant.

In the meantime the company reserves space in a ship through clearing agents who

handle the goods shipment into the ship. There are formalities which the company

has to undergo at the port wherein the customs check the identity of the goods,

origin of goods.

They also check whether the product is in the clearance list of the customs

authorities and the final clearance is given for exports. The payment for these goods

are ensured through an LC opened by the customer or on DADP basis.



26

Depending upon the destination it takes between fifteen days to forty five days for

the customer to receive the goods. On reaching the shore of the customer of the

respective country the customer takes care of all procedures at their respective

ports. On receiving the goods the customer makes payments, if it is DADP or

through an LC.



27

Expansion Policies (Expansion of manufacturing capacities/facilities)

The company started its operations from a plant in Patalganga. However the plant

capacity was almost fully utilized. the company had two options. Either to build new

plants or acquisitions. Building a new plant would require, Building a green field

project which would require two years’ time. The company with its aggressive growth

plants decided to go for acquisition to cut short the gestation period. It first acquired

Doctor’s organics which had a USFDA plant in Tanaku.

As of now the company has decided not to put fresh capital in building plants or

acquisitions as the balance sheet is stretched. The company has a tactical team

which continuously works on increasing the capacity of the existing plants by

reducing the manufacturing time.

This team has been successful in increasing the capacity of its product – Tramadol

from 9 metric tonnes per month to 14 metric tonnes per month without expanding i.e.

installing new reactors but only through its manufacturing process i.e. removing the

mismatch in different process like increasing the boiler capacity, Improving the

piping’s , automation of final packaging etc.

The company’s current objective is to increase the current capacities by improving

efficiencies thus increasing manufacturing capacity which involves lower capital

costs. Based on the current performances it is clear that the current action plan is

working for Wanbury since it has experienced an increase in sales.



28BALANCE SHEET AS AT 31ST MARCH, 2011Schedule As At 31.03.2011 As At 31.03.2010

No. (Rs. in Lacs) (Rs. in Lacs)

SOURCES OF FUNDS

SHAREHOLDERS FUNDS

Share Capital 1 1,468.93 1,468.93Reserves & Surplus 2 14,046.13 17,024.48

15,515.06 18,493.41

LOAN FUNDS Secured Loans 3 28,855.43 26,326.93Unsecured Loans 4 6,814.40 5,791.34

35,669.83 32,118.27

Deferred Sales Tax Liability 25.34 31.94

TOTAL 51,210.23 50,643.62

APPLICATION OF FUNDS

FIXED ASSETS

Gross Block 5 28,563.71 27,528.36

Less: Depreciation / Amortisation 6,575.13 5,479.50

Net Block 21,988.58 22,048.86

Add : Capital Work in Progress 1,074.92 1,501.32

23,063.50 23,550.18

INVESTMENTS 6 10,471.57 10,172.31

CURRENT ASSETSInventories 7 3,638.94 3,235.61Sundry Debtors 8 6,556.51 8,222.74Cash & Bank Balances 9 759.25 1,042.20Loans & Advances 10 18,202.80 14,465.79

29,157.50 26,966.34

Current Liabilities 11 10,158.96 8,536.05Provisions 12 1,323.38 1,509.16

11,482.34 10,045.21Net Current Assets 17,675.16 16,921.13

TOTAL 51,210.23 50,643.62

Accounting Policies 17

Notes to Accounts 18



29

Personal Conclusion

After analysing the various strengths, weaknesses, opportunities and threats of

Wanbury, It can be said that over the years the company has grown by leaps and

bounds. It has made forays into a number of markets and increased its market share

to a considerable extent. Curently it has been facing some tough times due to the

economic crisis in Europe. But the employees at Wanbury are convinced that this is

just a tough phase and things will improve over time.

The company has ambitious plans for the future in order to increase sales and

market share at the same time the company focuses on keep costs at a minimum

since it feels that this is of paramount importance if it has to keep its profits high. The

company has taken various steps in order to reduce the losses and get a grip of the

current situation.

After speaking to a couple of employees at Wanbury, I have a feeling that the

situation is getting better. There are also plans to introduce new products. For now

though it only plans on improving the current situation and from there on try to

achieve its objectives. The company has no plans in the near future with regard to

acquisitions and mergers.

As mentioned in the project, there is increasing demand for its two main products

Metformin and Tramadol and the company wishes to cash in on this by improving

production capacity. Overall things are looking better for the company than last year.



30

Bibliography

www.wanbury.com

www.businessballs.com

http://en.wikipedia.org/wiki/Pharmaceutical_industry_in_India

http://www.eximguru.com/exim/guides/how-to-

export/ch_17_export_documents.aspx

http://www.pall.com/main/Biopharmaceuticals/Active-

Pharmaceutical-Ingredients-28488.page

export management economics (2)

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