Growth Formulations - Natural Capsules

Please take us through your journey so far at Natural Capsules.

Natural Capsules (NCL) was started in the year 1993, and went public in 1994. NCL commissioned its first manufacturing facility at Bangalore in 1995. It went on to add a formulations division at the Bangalore facility during the year 2000. Further, NCL acquired the assets of an existing capsule manufacturing company at Pondicherry in 2003 and expanded there during the 2005-07 and 2009-2011 periods.

Tell us about the business model of the company.

NCL is a manufacturer of Hard Gelatin and Hard Cellulose capsules used by pharma, nutraceutical and herbal manufacturing companies. NCL supplies directly to these customers and also exports to its distributors and direct customers in various countries across the world.

How do you foresee the sector shaping up going forward for FY13?

The Indian pharma industry has been growing at a higher rate than the industrial growth rate in the country. We foresee sustained growth in the pharma industry, and hence expect similar growth in our segment, as it caters mainly to the pharma industry.

Are you planning any expansion in your facility? What is the current level of capacity utilisation?

NCL currently utilises almost 97 per cent of its installed capacity. Post completion of its ongoing expansion, the company will have a manufacturing capacity of about 7.8 billion capsules per annum, which will make us the second largest player in our segment in India. We are also keeping our options open with respect to acquiring other players in the segment. At the same time, we are also keeping our options open for further growth in other allied segments in the pharma industry.

Please take us through your product portfolio.

NCL’s main products are Hard Gelatin Capsule Shells and Hard Cellulose Capsule Shells. NCL provides an innovative range in these products, like special/natural pigmented capsules, flavoured capsules, etc.

Where do you see the kind of growth coming from that will take the company to the next level of growth?

Apart from growing within the capsules segment itself, NCL would also like to see growth in other allied segments in the pharma industry. We are evaluating various proposals in this regard.

What are your capex plans for FY13, and where is it going to be utilised?

As of now, NCL is planning to complete its ongoing expansion project. New capex plans will be decided once any proposal is decided by the Board.

Please shed some light on your contract manufacturing business.

We undertake contract manufacturing of some pharmaceutical products on behalf of certain pharma companies. However, this amounts to only a small percentage of our total turnover.

Do you plan to raise money going forward?

NCL has a growth-oriented vision. Hence, going forward, the company would definitely look forward to raising money from the capital markets for its future expansion plans.

Are there any plans for diversification going forward?

We are evaluating various proposals for new investments, both in our current segment and in allied pharma segments.

How important is CSR according to you? Please tell us about some of the CSR initiatives undertaken by NCL.

We consider that the corporate sector has a responsibility towards society and should discharge this through various means. NCL has decided to initiate measures like providing free medical facility to the villagers nears its Pondicherry factory and contribute to the local societies.