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January 20, 2009

Who is Murali Divi?

Businessworld has a profile of the Founder of Hyderabad-based Divi's Labs, which is charting stupendous growth.
It all began in 1984 for Divi, a postgraduate in pharmaceutical chemistry from the College of Pharmacy in Manipal, Karnataka. Seven years into working in the US at large specialty chemical and custom pharma manufacturing companies — first as production manager and vice-president of R&D at Fike Chemicals, and then as technical director at Schulkill Corporation — he returned to his home state of Andhra Pradesh to strike out on his own. He co-promoted two companies, Cheminor Drugs and its subsidiary Globe Organics in Hyderabad. These companies, he felt, would leverage his skills in fine chemicals manufacturing that had been honed at the US factories. An indigenous pharmaceutical industry was just making its presence felt in India after the country relaxed its patent laws in the 1970s to allow copying of drugs patented to western drug companies. His partner in these ventures was K. Anji Reddy, founder of Dr Reddy’s Laboratories...

...After he quit the JVs, Divi started small. He launched Divi’s Research Centre, an R&D and consulting company that engineered new manufacturing processes to make known drugs, and sold these to the highest Indian bidder. Divi hired fresh graduates in organic chemistry instead of experienced hands since he wanted “a different mindset”. He personally trained the first two layers of researchers. In 1994, he added a factory, investing Rs 71 crore, and changed the company’s name to Divi’s Laboratories to make bulk drugs using its proprietary processes.

...The numbers speak for themselves — Divi’s market cap, at nearly Rs 8,000 crore on 15 December, equalled that of Dr Reddy’s on that date. Top multinationals are Divi’s customers, and he is the world leader in manufacturing patent-expired painkiller naproxen, which when he started out had over 20 contenders. Naproxen accounted for about 20 per cent of the company’s sales in fiscal 2008.


Arun Natarajan is the Founder & CEO of Venture Intelligence, the leading provider of information and networking services to the private equity and venture capital ecosystem in India. View free samples of Venture Intelligence newsletters and reports. Email the author at arun@ventureintelligence.in