Abhaya Kumar, CEO & Managing Director, Shasun Pharmaceuticals Ltd, aims to transform the company into a billion dollar enterprise by 2020, and foster entrepreneurship by supporting at least 100 entrepreneurs, as an investor and advisor
A first generation entrepreneur, S. Abhaya Kumar, founded Shasun Pharmaceuticals, a global supplier of development and manufacturing
services for intermediates, API (Active Pharmaceutical Ingredients) and formulations, within a year of graduating. Since then, he has played an instrumental role in helping the company record a turnover of over Rs. 1000 crore, and building a network of 1, 800 employees. He also pioneered the concept of cord blood stem cell banking in India, under the brand LifeCell International (a company offering comprehensive approach in the field of stem cells), and set up Shasun School of Liberal Education (SSLE), an arts and science college, to help create successful entrepreneurs.
In this interview with Poornima Kavlekar, S. Abhaya Kumar talks about the journey of building Shasun, the lessons he learnt during this period, and his vision to foster entrepreneurship.
What made you take the entrepreneurial plunge and incorporate Shasun way back in 1976?
Right from my second year in Chemical Engineering, I was clear that I wanted to setup a chemical factory and not be an employee. A year after completing my course, in 1975, I approached my father with three projects, in areas I had expertise in; dyes, pigments and chemicals. He then put me on to Mr. R. Thyagarajan, founder of Shriram Group, who advised me to start a pharmaceutical company.
In 1977, we commenced production, and in the first year we lost whatever capital we invested. However, in 1978 we started making profit and by 1984, we began expanding. We setup a factory in Ankaleshwar and later shifted it to Pondicherry in 1985, due to better proximity to home. This is where we started manufacturing Ibuprofen. In 1991, we started our third unit in Cuddalore and converted the first unit in Velachery into a R&D centre. We came out with a public issue in 1994.
Can you highlight some of the challenges you faced as an entrepreneur and how you converted them into a lesson?
The industry was going through a transition from 1985. Many bigger companies took the path of confronting patents and filing patent challenges. We took the path of not competing but complementing the MNCs. So, we made a lot of APIs for them and continued to be job workers rather than making our own IPs. We got delayed there and that is where other companies took a bigger lead and we continued to be on the slow and steady path to success. But, we had our advantages too. Some companies came exclusively to us for manufacturing their products because they knew that we will not be competing with them at the market place.
By 2002, we realised that the only way we could grow bigger was by having our own formulation unit. Thus, in 2002-03, we set up our own formulation unit, expanded our research centre, and moved from Velachery to Vandalur, in Chennai. By 2004, we decided to become a professionally-led organisation.
What made you enter the stem cell research sector through LifeCell?
In 2004, Dr. Jagdish Seth, who was on the board of CRYO-CELL International, asked me to look at this venture in India. I researched about stem cells and realised that, since I had pharmaceutical experience, I could handle the concept from a technical angle. Then, I came back and held a market survey to find out if this venture will be profitable. Unfortunately, the report indicated that I was too ahead of time (in 2004). But, that was a challenge for me. When I was looking for an opportunity and no one was offering this service in India, I had the option to be a pioneer in this field. So, I decided to go ahead with it.
How do you aim to foster entrepreneurship?
Right from 1980s, when I got stabilised, I wanted to help aspiring entrepreneurs. The first person I helped was Babu, a hairdresser I’d met during one of my visits to Mumbai. He was trained in step cutting so I brought him to Chennai, to help him build his skill. Soon, he became a rage. He did very well and even re-paid my initial investment in his venture. Since then, I have assisted more than 30 aspiring entrepreneurs, either as an investor or an advisor. That pursuit still continues and my aim is to help at least 100 entrepreneurs realise their dreams.
Can you share with us some important decisions you took that became the turning point for Shasun?
Working with innovators helped us become pioneers in bringing contract research and manufacturing service (CRAMS) to India. Though the model was effective, we realised that if we had to grow bigger, we had to create our own IPs. So, we slowly changed our course from complimentary to competitive manufacturing. Our first attempt did not work well. But, our associations with major MNCs gave us access to technology to manufacture the drug exclusively for them and some for the entire world. For example, there are just two manufacturers (across the world) for Cyclocirin, the anti-TB drug, and we are the largest.
On another instance, in 2004, when we decided to change Shasun into a professionally run organisation, my role changed. I got into FrameFlow India (a company that provides visual effects and animation for films and advertising projects), which was eventually sold to Sony. During this period, I started LifeCell International.
What are some major challenges you faced in promoting LifeCell?
Convincing people about the concept took a long time. We set up facilities thinking we are going to process a certain amount, but, it did not happen that way. There was a lot of drain in cash. Luckily, there were many HNIs who invested in LifeCell.
Can you help budding entrepreneurs understand the some key factors they need to keep in mind and be prepared with before filing their patent application?
Entrepreneurs have to ensure that the process or the product patent they want to create is unique. Secondly, they have to evaluate the potential of business they can get out of it. They should also map the threats, such as, who else could come up with similar ideas and what could be the pitfalls in successfully litigating the case. Most importantly, once they are done, they can go on their own if they have the money or, they can search for a partner to help them with it.
You’re a sports and arts enthusiast. Can you narrate one business lesson that you learnt from the interests you pursue?
Two sports that really encouraged me to become stronger are horse riding and flying. Flying gave me a lot of courage to take up challenges which are not faced under normal circumstances. Horse riding taught me to love animals, to tame them and, to be in control of the situation.
Your advice to budding entrepreneurs
I would advice everyone to take up extensive travelling. Be on your own as that helps you to negotiate better with people. And, management is more essential than money. Most entrepreneurs tend to focus on ideas they think are right. But, they may not have any financial bearing. I always have two financial advisors to whom I often bounce off ideas and prepare to hear a no from them.
Where do you see Shasun Pharmaceuticals few years from now?
Shasun is undergoing a big transformation and will be a billion dollar enterprise by 2020. We want to be the preferred partners of innovators.
As a first step to achieve this, we have decided to create our own IP and file our own ANDAs, and our research spend has increased from 4 per cent to 6.5 per cent. All these changes will bring value to the company in the next one or two years. Moreover, we’ll continue to pump in a lot of money to create value in terms of new research areas like nanotechnology and biopolymers, and invest in companies which make therapeutic products in the U.S. Lastly, we are setting up our own marketing arm in the U.S. to market the ANDAs which mature into products. The results of these transformations will be evident in 2015-16.