Indian API-maker looks to Asia for cheap energy

An Indian maker of APIs for immunosuppressants says it will expand in Asia, where it hopes to find cheaper energy costs.

Ahmedabad-based Concord Biotech will invest $20 million in a 450,000-liter-capacity fermentation plant and is in talks with an Asian government interested in having the facility, Chairman Sudhir Vaid tells The Economic Times. Vaid and investor Rakesh Jhunjhunwala bought the company in 2009 from Mylan ($MYL).

The company says it is the only producer of the generic versions of APIs used in all four major immunosuppressants or biotech drugs used after organ transplant. The global market for immunosuppressant drugs is worth about $1.5 billion today but is forecast to grow to $5.6 billion in 2018, the publication says. Vaid says cheaper energy is needed to compete with Chinese generics.

The fermentation process used in making the ingredients runs non-stop and requires enormous amounts of energy and petroleum-based products. It also requires ethanol, which Vaid says also is expensive in India. "Gujarat has quality power supply compared to other states, but power cost is high." he says. 

- read the Economic Times story