Orchid Pharma's Rs 600-Crore Jammu Plant To Reduce China Dependence, Says MD

Chennai-based Orchid Pharma’s upcoming plant in Jammu will reduce its dependence on China for sourcing key raw materials, increasing its cost efficiency in the future.

The plant's construction, which will begin in the second quarter, will help reduce the company’s dependence on China for the 7-ACA raw material used in antibiotics, according to Managing Director Manish Dhanuka.

“The basic idea of the PLI scheme is the indigenisation of the key raw materials and this will definitely de-risk our sourcing of this key raw material (7ACA) from China. We are hopeful that we will be able to manufacture it at a very competitive cost and it will result in improving our overall cost efficiency,” Dhanuka told NDTV Profit.

However, this will be achieved post-fiscal 2026, after the construction of the plant.

The company has three sets of ongoing projects. One of them is the 7-ACA manufacturing plant in Jammu, which is the company's largest investment, he said.

It has another investment in manufacturing injections based on an agreement with GARDP. This would require an investment of around Rs 150 crore. The third one is for the enhancement of the company's oral APIs, which will need a Rs 80 to Rs 100 crore investment, the top executive said.

Orchid Pharma’s revenue margins will improve in the remaining quarters of FY25, with a rise in sales backed by new additions to its portfolio, he said.

“We should be able to make a new drug available in the month of September, along with Cipla. We are also launching our new critical care division, Orchid AMS. This is a hospital-based business where we will have a wide portfolio of antibiotics. We would like to promote these antibiotics to hospitals in a different business model. We hope this business will pick up and become a reasonably large share of our overall revenue in the next two years,” he emphasised.

The company's June quarter revenue was volume-led and not pricing-led growth, Dhanuka said.

“There is volume-led growth in Q1, overall we have grown our quantities. We have already enhanced our capacities for both the sterile and oral segments and we are at 70–80%  utilisation of them at this point. With the launch of our new drug in India, we can have a higher-than 20% growth in FY25,” he said.