Leveraging the India-edge
Two is company.
That’s how it started for Hari Shankar Bhartia, who after
completing his degree in chemical engineering in 1979, joined hands
with elder brother Shyam to build the Jubilant Group. Originally
incorporated as Vam Organic Chemicals in 1978, the company has evolved
into its current form, Jubilant Organosys. From surviving and
growing in the license raj to riding liberalization—it has
traversed a great distance and today the Jubilant group has interests
as diverse as life sciences, energy, retail and food service.
Supported by their father, in 1972, Shyam had conceived the project to
build a chemicals company that used feedstock as raw material and
located the manufacturing facility in Gajraula, Uttar Pradesh, in close
proximity to sugar mills for easy availability of molasses. The company
was making an intermediate called pyridine, a lot of which went into
the pharma industry. This facility and pyridine went on to become the
backbone of the company with pyridine chemistry platform as its major
focus. In all drugs, at least 20 percent of intermediates come from
pyridine or its derivatives. The company, then known as Vam Organics
ranked 7th globally in pyridine production.
When India started opening up in the 1980s, the Bhartia-brothers
decided to tap the global markets. They started scaling up the research
and development team. The company was building its own pyridine
chemistry research platform, which ultimately helped it become the
lowest cost producer of pyridine. Subsequently, it went on to become
and still is the world’s No 1 producer of pyridine
and its derivatives with 35-40 percent of global market share.
Business transformation fast-tracks growth
Today, the company has built a strong, sustainable business model
through consistent organic growth and inorganic expansion by acquiring
niche businesses in developed markets like Canada, Europe and the US,
and has more than 60 percent of its revenue coming from international
markets. “Jubilant has reported this robust growth due to its
strategic thrust on moving up the value chain in pharmaceuticals and
life sciences products and services,” says Hari Bhartia. He
is now devoting 100 percent of his time to life sciences. The segment
is the fastest growing business for the company and currently accounts
for three-fourths of the group’s topline.
Often referred to as a great visionary by his core team, Bhartia had
visualized the growth trajectory and consciously chose life sciences
segment as the growth engine. The business transformation journey from
pyridine to APIs (active pharmaceutical ingredients), dosage forms,
injectables and drug discovery and development was all mapped out much
ahead and it came to fruition. With the basic chemistry strength in
view, he went about building technology and capability around it.
“We knew which way the industry was moving,” he
The pace of growth stepped up after the new business identity Jubilant
Organosys, the “science active” company came into
existence in 2001. The strategy was to build an integrated platform to
service the pharmaceuticals industry.
In the last seven years, Jubilant has seen explosive growth, aided both
by organic as well as inorganic measures. “We really entered
the life sciences business only in the year 2000, and are actually a
very young company,” states Bhartia. It was only after
defining the company as “science active” that
Bhartia started moving away from the chemical part of the business.
What followed was the journey to drug discovery platform integrating
capabilities like structure-based drug design, bioinformatics,
medicinal chemistry, and clinical among others. In just about five
years he created the integrated drug discovery platform. “We
started on it about five years back and today we have one of the
country’s largest integrated drug discovery
platform,” he says. This is the shortest time frame any
company in India has achieved this scale and capability.
The objective for the next two years is to grow this platform.
“Now, it is about scaling up the assets that have been
created. If there is a technology or competency gap that comes up we
will acquire but we are not looking at large acquisitions at this
point,” explains Bhartia.
Essentially, Jubilant is focused on building scale and introducing new
products. For example, large part of the business, which is APIs, is
growing at a healthy rate. “In APIs, we will continue to add
seven to 10 products to the portfolio every year,” says
Bhartia. “In some businesses, we are No. 3 or 4. There we
would strive to get to No, 1 and start to take leadership in finding
offshoots of these businesses,” he adds.
The transformation so far has been a challenge and is by no means
complete, according to Bhartia. He has lot more on agenda. The life
sciences business is the only business where both the Bhartia-brothers
hold executive positions vis-a-vis rest of the businesses which are
board-managed by Bhartias.
The fact that the opportunities in the life sciences space are huge
eggs him on. Even though the Jubilant group is likely to close the
current year with a flat growth the company is on a strong footing and
is consolidating. Besides, there is no slowdown in the CRAMS business,
The life sciences business, overall, is expected to record a growth, of
14 percent. “Besides, as capacity utilization improve the
margins will go up and the order book is also encouraging,”
Innovation ecosystem agenda
Bhartia envisaged and worked about this transformation because he saw
the opportunities that were waiting to be tapped. He put in place a
system to provide research services to the global pharmaceuticals
industry. “We said we can help you innovate,” he
says. The complexion of the industry is changing. Big pharma companies
don’t know it all. They cannot do it all. They cannot do it
all by themselves. There are far too many pressures. In the backdrop of
changing business models, according to Bhartia, companies like Jubilant
can play a growing role.
The context for innovation is taking roots in the country. For
innovation, there must be competition. In India, competition came in
existence only in the mid-90s. A step-up in the
and collaborations is what we will see in the near future.
“In another four-five years you will see the change. Now, its
just a matter of time,” he says.
In the last decade, the life sciences industry has seen two turning
points. One, the industry graduated from selling to the domestic pharma
market to becoming a generics supplier to the world. Complying with FDA
requirement to sell in the regulated markets will now begin to have a
rub-off effect in domestic manufacturing. That was the first level of
globalization. Second turning point, which is a recent development, is
the realization and the success stories that we can do research not
just in generics but in innovative products as well.
The ecosystem of innovation has begun to evolve. “In about
five years of time frame you will hear stories of academics who start
companies to commercialize their research and become
successful,” he says.
However, this is not to say that all this will happen without any push
from the government. Early stage science has to be supported by grants
and the government in India is doing it. There are some very good
initiatives that have been put in place by Department of Biotechnology
under Dr MK Bhan’s leadership. “We need to seduce
people to science early. It is best done at academia level. For this,
we require huge investment in laboratories. This is beginning to
happen,” opines Bhartia.
Leading from the front
Bhartia champions innovation not just in his company but on a wider
platform as well. He led the high-powered Confederation of Indian
Industry (CII) business delegation, as the organization’s
vice-president, to the US, accompanying Prime Minister Manmohan Singh.
The objective of this 30-member mission was to strengthen the bilateral
economic relations between the two countries and forge collaborations
on global challenges.
In his capacity of the vice-president at CII, he is keen to do as much
as possible to remove bottlenecks to growth. The current year CII
agenda has been focused on bringing industry back on growth track. And
it will be back to normal by the last quarter of the year, except the
export side which will remain dependent on the global economy.
The focus for 2010-11 is on skill development, affirmative action and
innovation. The government has already formed the national skill
development board, and CII will help the government decide curriculum
and the strategy that will help bridge the gap and make the human
resource passing out of colleges more employable. “CII
handles a wide range of issues: there is one on how to make industry
friendly towards issues of climate change and so on,” says
Bhartia adding that the idea is to build a strategy and system that
includes all the companies, and results in the industry voluntarily
taking actions which are inclusive.
Any economy has three stages of competitiveness—one, factor
driven; two, scale driven; and finally, innovation driven. It is this
power of innovation that should be harnessed.
Currently, Bhartia himself is innovating in the healthcare delivery
space by taking up the challenge of delivering affordable healthcare to
middle and lower income group living in the villages and districts of
Jubilant First Trust Healthcare Limited under the brand of Jubilant
Kalpataru Hospital, is in the process of setting up an integrated
network of hub-and-spoke hospitals in the state. The company will
create a total capacity of 1,000 beds across seven hospitals and two
nursing schools/colleges to supply qualified and trained support
services to the specialists at the hospital. This pilot
project’s hub is located in Howarh and it covers a radius of
Hari’s vision and deep-rooted understanding of science is
exemplary. His approach and commitment to research has made a
significant contribution in putting Jubilant on the growth path. Under
his leadership, we have consolidated the drug discovery platform across
multiple subsidiaries and today have an integrated service offering for
Mosur, CEO & president, Global Drug Discovery &
Development, Jubilant Biosys
I have known Hari for over seven years now and the most
aspect about him is his true belief in innovation and research. He has
been instrumental in many collaborations to forward the cause of
science. When I met him in 2002, the group was not into pharma business
saw their passion and commitment to get into this sector, which
convinced me into joining the Jubilant group. There has been no looking
Mohan Khanna, Executive Director, Science & Technology,
Jubilant Organosys Ltd
It is almost a decade back that I met Hari Shankar
Bhartia. He was kind
enough to meet me and discuss on several weekends setting-up Jubilant
Biosys. I had the pleasure of interacting with a professional who is
the visionary with extraordinary commitment and
patience. I saw in him a person who treats all employees and
stakeholders with great human touch and respects their individuality.
It is a pleasure to be associated with such a great human being.
—Dr V N
Balaji, Chief Scientific Mentor, Jubilant Biosys
I have seen him not only as a strategic and a visionary
leader but also
as a person who has passion for science and innovation. With multiple
and diversified businesses within Jubilant portfolio and also
considering his chemical engineering background, it is amazing to see
his understanding of the complexities of drug discovery and
development. I have always seen him as a leader who is socially
oriented, is flexible and is a great visionary.
Surinder Kher, Senior VP, Vanthys Pharmaceutical Development
achievements in 2009
- Jubilant entered into a joint venture with US-based
Eli Lilly to focus on drug development.
- Jubilant Biosys, a wholly owned subsidiary of
Jubilant pioneered the concept of collaborations by announcing several
drug discovery partnerships with global pharmaceuticals majors, such as
Amgen, AstraZeneca, Eli Lilly, Endo Pharma, Forest Labs and Orion.
- The focus on developing innovative technologies
gained momentum and the company designed and developed a technology for
4-DMAP and successfully commercialized the
product. Jubilant is the only company in India to make this
product, the only other countries where this is manufactured are the US
- Jubilant’s new state-of-the-art dosage
forms facility at Roorkee received approvals from UK MHRA,
the health regulatory body.
- Jubilant successfully integrated the sterile
injectable business in North America that enabled the company to
capitalize on the synergies achieved and signed three
large size contracts with leading global pharma companies, despite
the global slowdown.
Life et al
So, while he keeps so much going. What keeps him going? Family time,
every Sunday; family holidays twice a year; quiet times spent all by
himself—reflecting, assimilating experiences and learning;
and a wide variety of reading coupled with travel. Keeping an open mind
is essential, he believes. That is “the one”
critical element which helps broaden horizon. He credits most of his
learning and influences to travel and visiting labs and companies
across the world and observing how other people do things.
While he became more and more focused on work since 1979 his other
interests fell wayside. Polo, film-making, lawn tennis in that order
are no longer part of his routine. Not even golf. He didn’t
take to it. There is so much to do and so little time. He works all
Saturdays and devotes at least four hours a week to CII and industry
matters. Making a difference to the industry is on his agenda now.
Another challenge is being met head-on by the quiet, unassuming Bhartia.
Nandita Singh in New