“I expect that the government will bring another PLI scheme in the budget, especially a scheme should be brought in place to encourage R&D that is not happening in India at present.”
Himanshu Baid, Managing Director, Poly Medicure Ltd, talks about his expectations from the budget, PLI scheme, Atmanirbhar scheme, new plants at Faridabad & Jaipur and acquisition plans among others during a candid chat with Swati Khandelwal, Zee Business. Edited Excerpts:
Q: Around 70% of the medical devices are imported in India but the government has provided an opportunity to companies under the production-linked incentive (PLI) scheme. Now tell us about your expectations from the budget like any further announcement that would benefit your company?
A: I expect that the government will bring another PLI scheme in the budget, especially a scheme should be brought in place to encourage R&D that is not happening in India at present. We have also got its indications from the government itself in which it wants to push R&D in India because until R&D is not happening in the country, especially the medical field, then it will be very difficult to manufacture things here because it is a very technology-oriented business. And, another area, we are looking at where a correction can come inside the inverted duty structure because several raw materials which are sourced from outside have inverted duty structure and duties are very high, GST is high and GST remains high or low under local manufacture and import and it should be normalised. Import duty should also be normalised. So, I expect that in this budget, the government will take some actions on the wish that we have made.
Q: Please update us about your new and upcoming plants at Faridabad and Jaipur and what kind of revenue contribution is expected from these plants? Going forward, what are the expansion plans of the company amid the opportunity that India is providing?
A: Our Faridabad plant became operational in November 2020 and the Jaipur plant will be operational by February. We have already applied for the PLI scheme. I feel, there is a lot of potential in renal space and respiratory care space in India. At present, around 90% of the renal products are imported in India and if the PLI scheme is approved then we will ramp-up our investment a lot. We will try to make India Atmanirbhar in the next 4-5 years under this sector. because the machines and consumables being used are being imported and very few of those are being manufactured in India. So, there is a lot of scope in it. There is also a large scope in diagnostics, whether it is consumables or test kits as a lot of products are being imported to India. We are pushing in that too. The Jaipur plant which falls under SEZ has been established to push for exports as there is a lot of potential in export in products like Catheter, while the Faridabad plant has been established especially for dialysis products. If our PLI scheme gets approved, then we will put a lot of investments in it, to ramp up the productions.
Q: Can you provide a ballpark figure on the kind of investments that can be seen in next 3-4 years and how the funds will be raised? Also, do you have acquisitions on your radar or you just want to grow organically?
A: There is nothing on hand at the moment, but about one and a half years or two years ago we acquired something in Italy for oncology products. We are seeing growth in the same field, now, and if some new products or companies come to our attention then definitely, we will see in that area. The company has invested around Rs 200 crores in the last three years under the CapEx and going forward, I believe that we will invest around Rs 300-400 crore more in new projects and products and PLI scheme will give a push to our CapEx plan.
(As published in Zee Business. Jan 12, 2021 )