Thought leadership: Dr Sanjay Chaturvedi, CEO of IOLCP talks about current issues and their impact on the industry 

Thought leadership: Dr Sanjay Chaturvedi, CEO of IOLCP talks about current issues and their impact on the industry 

by 5paisa Research Team Last Updated: Apr 07, 2022, 05:21 PM IST

Dr Sanjay Chaturvedi explains the impact of the current issues on IOL and other companies in the industry in a nutshell.

Dr Chaturvedi said that because of the Russia-Ukraine war they are facing three major issues: 1) Supply chain disruption 2) High costs charged by the shipping industry and 3) Energy crises.

Out the these three, the energy crisis is the most worrisome as it directly impacts manufacturing costs. Moreover, even when the demand is high, the cost of production has also increased drastically, but they cannot increase the price of products as it will impact the existing customers, so they have to manage the crises efficiently. He was of the opinion that the crises will cause more issues for companies that are focusing on global growth.

Recently, Germany’s chemical bemouth announced that it may halt its production curtailing the gas supply issues. Dr Chaturvedi addressed this issue by saying that this move may not impact the ibuprofen industry as BASF’s ibuprofen production takes place in the USA. Even the lockdown in China won’t impact IOLCP’s ibuprofen segment much as they are self-sufficient, but it may impact some other products if the situation remains the same.

Regarding IOLCP’s ibuprofen status, he stated that currently, the demand has reached pre-covid levels. During the pandemic, there was a massive surge but now as the situation subdues there is more demand globally than domestically. He mentioned that IOL has succeeded in growing its non-ibuprofen segment remarkably well. He has a positive opinion about the recent essential drug price increase by the government as it will help small companies sustain and survive.

It won’t affect IOLCP’s margins as these drugs are not in their portfolio. He believes that APIs that have scale, sufficient backward integration and a strong balance sheet will definitely witness a strong comeback soon.

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