CHENNAI: Shashun Chemicals and Drugs Ltd. has drawn up a Rs. 110-crore capital expenditure (capex) programme for 2006-07. A part of this — around Rs. 50 crore — would be invested in the company's upcoming multi-product semi-commercialisation project at the pharma city in Vishakhapatnam.

The first phase of the project, coming up at the Special Economic Zone, would go on stream in the middle of next financial year, said S. Vimal Kumar, Joint Managing Director (JMD). Addressing a press conference here on Friday, Mr. Kumar said the rest of the capex money would flow into the development of a laboratory for finished dosage in Pondicherry. The company had gone in for an expansion project in Vishakhapatnam as the capacity utilisation at its Cuddalore plant had been on the rise. Since debt-equity ratio of the company currently stood at 0.44, it was in a better position to raise loans to part finance the capex programme, said N. Govindarajan, Chief Executive Officer (CEO).

The company reported a 45 per cent rise in its net profit at Rs. 6.17 crore for the quarter ended June 30, 2006, up from Rs. 4.26 crore in the same quarter last year. Net sales grew by 29 per cent at Rs. 99.46 crore, up from Rs.77.26 crore in the same quarter last year. The company, Mr. Kumar said, saw significant revenues from CRAMS (contract research and manufacturing services), especially for new APIs (active pharmaceutical ingredients).

The JMD said the custom synthesis business of Rhodia of the U.K. that Shashun had acquired through its U.K. subsidiary would break-even this year.

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