Companies & Sectors
Indage Vintners goes into deep-freeze

Troubled winemaker’s bank accounts seized by sales tax department for non-payment of dues to employees

India’s oldest winemaker Indage Vintners, we learn, has not been making payments to suppliers and service providers ever since the beginning of this year. In a business that is dependent on a big public profile, the inability to pay its dues was the first indicator of how cash starved it is. Soon afterwards, it stopped paying employees, forcing some of them to approach the police. It was the vision of Indage's founder Shamrao Chougule that brought quality wine and champagne to India and it is his dogged effort that led to the discovery that large parts of Maharashtra have the perfect climate and soil to produce quality wine grapes. However, when it comes to running its operations, the group has always had its sharp peaks and troughs.

Several years ago, the company was pulled out of a financial mess through a generous restructuring of loans. This allowed it to take full advantage of the boom in wine sales that coincided with five years of India's blazing economic growth until 2008.

However, a series of over-zealous international acquisitions that went sour, expensive new brand launches and the prolonged lull in the market following the economic slowdown of 2008 have put the company’s finances in a precarious position again. In May, Indage closed down several regional offices and stopped accepting supplies from its several small wineries. Soon its market position began to decline and its nearest competitors, Sula and Grover began to eat into its market share.

Earlier this week, Indage landed into even more trouble after the West Bengal sales tax department seized its bank accounts for non-payment of dues. Apparently, any balance funds remaining in the account as on September 2009 were remitted to the sales tax department.

Moneylife had been trying to contact the company management for the past few days, but no one was willing to respond to our queries about the state of its finances. Vickram Chougule directed us to speak to his brother Ranjit Chougule, who did not respond to our calls. Earlier, Indage’s senior management had sought to play down employees’ fears saying the financial situation was only a temporary aberration and that the company would soon come out of it.

Sanket Dhanorkar [email protected]
 

User

COMMENTS

C Buckenham

7 years ago

Our company is owed substantial sums by Indage Uk guranteed by Idage in India. The company is clear that it intends to hide behind the Indian legal system delays rather than honour its debts and uphold its promises. The Uk entity is udner voluntary arrangement but having alienated its Uk supply base and lost but all of its customer base; its hard to continue believing the spin its Direcors provide in the face of the financial crisis it is actually in. It is sadening that the entoty has bene allowe dto build an empire of such financial growth without the underpinning or controls that a stock exchnage listing would suggest.

C Buckenham

7 years ago

Our company is owed substantial sums by Indage Uk guranteed by Idage in India. the company is clear that it intends to hide behind the Indian legal system delays rather than honour its debts and uphold its promises. the Uk entity is udner voluntary arrangement but having aligneniated its Uk supply base and lost but all of its customer base its gard to continue believing the spin its Direcors provide in the face of the financial crisis it is actually in.

The Indian pharmaceutical saga: Strong on generics, weak in R&D

The Indian government has loaded the pharmaceutical industry with fiscal sops and other goodies over the years to prop up its growth. Particularly, the largesse given to it to strengthen its research and development (R&D) base to compete in the world market seems to have yielded nothing. It is disappointing that the pharma industry spent as much as Rs15,000 crore on R&D during the past five years without producing a single new molecule. In sharp contrast, the US drug industry spends $55 billion on more than 450 drugs every year to come out with 26 new molecules. A McKinsey report says that Indian drug industry’s R&D costs are 85% lower than the US—thanks to cheaper talent—yet it has not come out with a single new molecule.

The Indian drug industry like the IT sector is knowledge-based and can grow exponentially as it has a vast pool of talent. During the past few years, the drug industry has made a transition from depending on reverse engineering—low knowledge based drugs—to R&D-based drugs aided by high knowledge ingredient. The industry has also realised that talent could attribute substantially to success in R&D.

In fact, a few drug companies such as Ranbaxy, Dr Reddy’s Laboratories, Biocon and Sun Pharmaceutical started research in 1993-94. But it was only during the last five-six years that investment in R&D received major impetus. During 2004-2009, pharma companies have spent $3 billion (Rs15,000 crore) on R&D. These companies spend around 7% to 8% of their sales turnover on R&D now, up from around less than half percent before 2000. Yet this looks miniscule in comparison to US or European companies which spend around 20% of their turnover on R&D. Yet Indian drug companies have not come out with a new molecule. More than 70 molecules have entered phase I of trials but only four-five molecules have entered phase III. Ajay Piramal, chairman, Nicholas Piramal says, “My dream is to develop one drug.” Piramal knows that drug development is very expensive in India, yet economical in comparison to the US. He says, “In the US, it costs around $800 million but in India it should not be more than $100 million.” The question then is: why in India have we not been able to develop a single drug out of $3 billion investment in R&D?

Ranbaxy has invested Rs 2,500 crore and Dr Reddy’s Laboratories Rs 2,000 crore in R&D efforts. Cipla, Cadila, Lupin and Sun have spent Rs 800 crore plus each in R&D. Another 12 companies have spent over Rs 200 crore each in R&D. Piramal, a late entrant in drug discovery with seven years experience, hopes to make a breakthrough in 2010-2011. Nothing hopeful has come from Ranbaxy, Dr Reddy’s, Biocon and Sun Pharma—all companies with over 15 years of R&D experience. The reason is simple. A major part of R&D expenditure has gone to reverse engineering, generics, contract research, clinical research and little to new molecule research. In the US, 80% of R&D expenditure goes to molecule research. That is why the US has high productivity in the entire chain of the molecule development cycle.

Low productivity, inefficient clinical research, low study curve and low learning curve, inadequate networking, long-term finance unavailability, low innovation and testing facilities, lack of trained investigators, no advancement in instrumentation, lack of stringent quality in CGMP (Current Good Manufacturing Services) practices, limited shared infrastructure, unfocussed approach, regulatory failures in phase III and many more reasons are behind the Indian pharmaceutical industry’s failure to produce new molecules. Many companies have separated their R&D divisions for reasons of core research and long-term finance availability as well as accounting jugglery.

“The productivity of the Indian scientist is very low,” says Jai Hiremath, chairman of Hikal Limited. India does not have a scientist credited with a single molecule discovery. Transforming the screening of 10,000 chemicals to one molecule is a complex process as is seen from failures in all stages such as screening, discovery of chemicals, lead development, pre-evaluation, phase I, phase II, phase III and phase IV studies in drug discovery.

Then there is no adequate understanding of complex diseases, that is why developing cures for such illnesses is therefore extremely difficult. For example, there are six blockbuster molecules based on the statin family like lovastatin, simvastatins, pravastatins, atorvastatins, rosuvastatins and fluvastatin molecules. Each of them lowers cholesterol but has side effects. Atorvastatins have been one of the highest selling drugs (called Lipitor) with a market size of $15 billion each year. Different statin molecules have been discovered by various global companies but no Indian company has discovered any molecule in the statin family. The same is the case with hypertension (blood pressure control) drugs. No Indian company has been able to discover any molecule in the sartan family (valsartan, losartan, irbesartan, candesartan, telmisartan, olmesartan) of molecules. Plainly speaking, we have to put together our strategy in a focused manner if we need success in new molecules.

“Continuous improvement is very important, whether it is expanding the use of electronic data capture to reduce errors and improve efficiency, or going global to find the trained investigators and the numbers of patients needed in a timely manner,” says Dr Ferzaan N Engineer, CEO, Quintiles Research (India) Private Ltd. Glenn Saldanha, CEO & MD of Glenmark says, “India has to create a culture for research, else it will be difficult for Indian companies to attain true success in discovery research.”
—Dhruv Rathi [email protected]

 
 
 

User

COMMENTS

Boby

7 years ago

This website, which has been in business for 6 years, is one of the leading pharmacies on the Internet. Our goal has been to deliver safe, generic medications at a good price! Our website provides quality generic medicines shipped directly from India. Each of the products that are available through our website are produced with the best raw materials and the greatest care at world-class pharmaceutical manufacturing plants in India. http://pharmacyon.host-sc.com/

SEBI

This is some sample text. You are using FCKeditor.

User

We are listening!

Solve the equation and enter in the Captcha field.
  Loading...
Close

To continue


Please
Sign Up or Sign In
with

Email
Close

To continue


Please
Sign Up or Sign In
with

Email

BUY NOW

The Scam
24 Year Of The Scam: The Perennial Bestseller, reads like a Thriller!
Moneylife Magazine
Fiercely independent and pro-consumer information on personal finance
Stockletters in 3 Flavours
Outstanding research that beats mutual funds year after year
MAS: Complete Online Financial Advisory
(Includes Moneylife Magazine and Lion Stockletter)