The steps to self-fulfillment

Dreamers, it is said, are great achievers. K. Raghavendra Rao, the 40-year-old managing director of the 100 per cent EOU, Orchid Chemicals & Pharmaceuticals Ltd, couldn't agree more. Son of a railway clerk, he dreamed of heading his own company after completing his education. Heading up the world's largest cephalosporin bulk manufacturing company today, he has indeed proved that unless you dream big, you cannot achieve what you dream of achieving. The Ernst & Young Entrepreneur of the Year award for manufacturing, given to him last year, validated his achievements in chasing his dream.

Not that Rao did not work towards fulfilling his dream. An MBA degree from IIM Ahmedabad, plus a company secretaryship and cost accountancy qualification…that must have asked for quite a lot of determination. And hard work. And like the symbol -- the crab -- that represents his date of birth (he was born under the Cancer sign), he crawled sideways, back and forth to finally grab the gossamer of his dreams in his fist.

The steps to self-fulfillment

Rao started his career with Pure Ice Creams and turned around one of its loss making units in Ahmedabad. Soon after that, when Ashok Leyland offered him the post of Assistant Manager (Finance) with a better emoluments package, he shifted to Chennai. "I soon realised that either a small or a large organisation does not offer quick growth avenues," he says. So his tenure with the auto major was brief.

The next run was at Standard Medical & Pharmaceuticals Ltd, Hyderabad, where Rao looked after project management, personnel and finance functions. While he was with it, the company grew in size from Rs 2.5 crore to Rs 25 crore.

"That convinced me that I has the capability to start a similar organisation from scratch," he recalls. And so began the trip to realising his big, all-ambitious dream. He needed money for his own start-up, so he headed to Oman, to join the $2 million Al Buraini Group as finance manager. The Group owned a 20-room hotel and a moderate-sized automobile garage. "Not a run-of-the-mill company for a finance manager."

With the experience gained at Standard Medical, Rao was a catalyst in making his Omanese company venture into production of bulk drugs. Apart from setting up a 300 tonnes per annum (tpa) antibiotic bulk drug unit, he was also instrumental in the group diversifying into steel, garment and hotel industries. All these ventures catapulted its turnover to $80 million within a short time. And Rao's salary went up to Rs 3 lakh, much of which he saved. Once his kitty rang richly, he headed back home to, finally, start his own venture.

Realising the dream, finally

The Oman stint gave Rao good international contacts and experience. He did not have to ponder long before zeroing in on cephalosporin bulk drug becoming the product of the future. 1993-94 saw Orchid Chemicals & Pharmaceuticals starting off and blossoming in collaboration with Sintofarm, Spa, Italy with a modest capacity of 90 tpa.

With increasing demands for the bulk, Rao expanded Orchid's capacity in a phased manner to attain a global size of 600 tpa. As a result of commendable export performance year after year, several awards came towards Orchid Chemicals and to Rao. The Earnst & Young award is the latest in the chain.

A dreamer never stops dreaming, though. Not satisfied with Orchid's turnover of Rs 333 crore, Rao is now gunning for much more. New avenues like formulations are part of that pursuit (see Formulating profits). "Our aim is to become a Rs 1,000 crore company in four years' time," he says. That means tripling last fiscal's turnover.

Four ways to grow

This time, Rao is adopting a four-pronged strategy, taking into account Orchid's strengths. "First, we will consolidate the cephalosporin bulk drug range without any fresh asset creation. We are working with certain international companies for product-specific supplies to Europeon and other markets." In addition, the company is setting up marketing offices in several countries to market generic OTC drugs. Recently, it has partnered a UK-based company to float a subsidiary, Orchid Nutricare, to sell the Indian company's soft capsules through mail orders.

The second prong of the strategy is to tie up with multinationals and other overseas generic drug companies for contract manufacture of cephalosporin drugs. "So far, we have been in the commodity market, clinching deals on a spot basis. Now we want to change that," says Rao. Orchid, known for its efficient process and product development, has reverse-engineered four oral and six sterile cephalosporin drugs, which it expects to manufacture for others.

The third prong: do contract research for new drug development and delivery mechanisms of its own or via the joint venture route, tying up with overseas companies/research institutions.

Following its initial success in developing an unique antibiotic polymer adducts alongwith Instituto Bio Chimico Pavese Pharma (IBPP), Spa, Italy, Orchid Chemicals is planning a major thrust in this segment. "We have achieved good success in this area and soon, we will come out with an interesting announcement," says Rao. In line with its research thrust, Orchid plans to invest around Rs 25 crore on R&D equipment.

The fourth prong of the strategy is to expand Orchid's formulations range, in order to generate at least Rs 300 crore out of it in five years' time. Money is available and plans on generating it in the future are being formulated (see A big shot in the arm).

And finally, a line on Rao's management style, in his own words: "My management philosophy is collective thinking to arrive at a consensus. In Orchid Chemicals, democracy does't stop in front of my table." Outside of his office, Rao has simple needs and pleasures (see K. Raghavenra Rao: the man outside office). Family-oriented, he doesn't have many needs that are outside of his home.