News: How Dr Reddy's became a $1-b company

(BL 27/07/2006) Hyderabad - A man who earned just Rs 500 a month 30 years ago went on to build a pharma empire and now owns a third of the company's market cap of Rs 10,000 crore. Dr Reddy's Laboratories, the company he started in 1984, is now a $1-billion company.

Recounting his experiences in setting up Dr Reddy's Laboratories and leading it on the road to becoming a pharma major, Dr K. Anji Reddy said that it was not a cakewalk.

He was addressing ICEM-2006, a two-day conference on entrepreneurship and management, at the University of Hyderabad on Wednesday.

"The atmosphere was completely different. It took us nine months in getting Rs 50 lakh to kick-start our operations. Now it is a different story; there are a number of venture capital funds chasing a few entrepreneurs," he said.

"I was getting Rs 500 a month at IDPL. After some time, I asked myself why I should work for such a small sum, and quit the job and started experimenting on a few entrepreneurial initiatives through partnerships. Then I quit that too and started the company in 1984. A year later it registered Rs 1-crore turnover, kicking off innovative drug manufacturing methods and setting precedents."

Taking a dig at those who copied some of Dr Reddy's works in the beginning, he said that copying would not lead anyone anywhere. "We thought we should move onto the next drug before someone started imitating."

Citing the successes of the company in the US market and other foreign markets, he said that it had occurred to him in the early 90s that the party might be over for Indian pharma companies as liberalisation unfolded, enforcing changes in the patent laws.

"No one was bothered about the future. They were enjoying the feast. They thought it would last forever," he said, and cited Dr Reddy's initiatives in pharma research.

The $1-b mark

Dr Reddy said that the company had crossed the $500-million mark last year. Two big-ticket acquisitions in one year added $300 million to the sales revenues.

"Our own sales would increase by $200 million, making us a $1-billion company this year. It took us 22 years to attain the $500-million mark. But in just one year, we achieved the other half."

He added that the path to success was ridden with risks. "One needs to aim for one's full potential."

K. Ramakrishnan, Chairman and Managing Director of Andhra Bank, said that the key differentiator to becoming a good entrepreneur was creative spirit. One should not have fear of failure and resource myopia.