• PAGE ONE
• INDEX
• HOME

Avon Organics plans biotech project

C.R. Sukumar

HYDERABAD, Sep. 18

AVON Organics Ltd (AOL), the Hyderabad-based pharmaceutical company into the manufacture of chemical intermediates, proposes to venture into the area of bio-technology.

The company plans to set up the bio-technology project at Chincholi Industrial Area in Solapur district of Maharashtra to manufacture ephedrine and pseudo-ephedrine. AOL is the third company in the country, after Colour Chem and Krebs Bio, to produce eph edrine and pseudo-ephedrine in the organised sector.

The bio-technology project is coming up at a capital investment of Rs 13 crore. To part-finance the project, it has privately placed 18 lakh equity shares of Rs 38.75 each aggregating Rs 6.97 crores on a preferential allotment basis recently. The company has also issued four lakh warrants convertible into four lakh equity shares at a price to be decided in accordance with the SEBI guidelines on preferential issues.

Of these proceeds, AOL plans to immediately invest up to Rs. 5 crore on the bio-tech project and the balance to augment its long-term working capital requirements. Further, ICICI Ltd has sanctioned a term-loan of Rs 8 crore to part-finance the bio-tech p roject.

According to a company official, AOL has obtained all the necessary approvals, permissions and licences for commissioning the project. While the civil works were currently at an advanced stage of completion, the company expects to commence the commercial production by the year-end.

The company has recently increased its production capacity of diketene-based derivatives to 4,188.77 tonnes from 3,444.67 tonnes. It has also developed and added new derivatives to its product portfolio at its full fledged in-house R&D centre. The produc t range includes mono methyl acetaocetamide, methyl aceto acetic ester, diethyl acetoacetamide and other diketene derivatives.

For the year ended March 31, 2000, the company registered a growth of 25 per cent in its sales and operational income and 100 per cent rise in post-tax profit. It posted sales and operational income of Rs. 46.08 crore as against Rs. 36.82 crore in the pr evious year and a net profit of Rs. 3.65 crore (Rs. 1.82 crore). As on March 31, 2000, the company's reserves and surplus stood at Rs. 9.31 crore on an expanded equity base of Rs. 9.45 crore.