Expectations sit lightly on Sun Pharmaceutical Industries founder Dilip Shanghvi’s shoulders.
Soft-spoken almost to a fault, he admits, 30 years ago when Sun Pharma was set-up, he had not imagined it would grow to the size it is now.
Focussed on getting the job done, one day at a time, Shanghvi let his work do the talking. And talk it does.
Sun’s revenues are over Rs 8,000 crore today, a performance that speaks for itself.
Shanghvi’s philosophy is to keep it simple. “I think (whether the) next year is in line with what I expected,” he says, with a disarming smile. “I never thought (then) of 30 years later …and neither do I think today … (of the years ahead).”
Playing his cards close to the chest, Shanghvi makes sure not to whip up hysteria about the company. But that does not stop industry-watchers from being excited with the potential still to be unleashed by the drug-maker.
Changing gears
Their anticipation fuelled by Shanghvi’s track record of chipping away steadily. But the other trigger is recent appointments at the top, indicating that Sun is changing gears to accelerate growth, expand globally and hit the big league.
Sun appointed as Chairman, Israel Makov, former Chief Executive of Israeli company Teva, the biggest player in generic medicines. And its business in the US is now headed by ex-GlaxoSmithKline man, Kal Sundaram. In fact, Kal also heads Taro, the Israeli generic-drugs maker that Sun fought hard for to bring into its fold.
Explaining how the appointments fit into his vision, Shanghvi says, if Sun achieves its guidance, it will be close to $2 billion, a relatively small size compared to peers in the industry. “So how do you continuously grow even when you become a much bigger company, these are all challenges that we have not seen. Also when we buy companies, the integration, cultural challenges…”
An overseas buy is on Sun’s radar for growth. And the market recently did get stirred by speculation of Sun evaluating Stada, a German generic company.
Ups and downs
Such breathless attention from industry-watchers is a recent phenomenon. Life was very different when it all started. Neither did Shanghvi have a pharmaceutical background nor did he get into a popular segment. He started with psychiatric drugs.
The focus on a niche like psychiatry was out of necessity, he says. “I started with very little big money (about Rs 10,000)… I had no big sales force …the choice was to get into something specialised and small.”
So were there moments of self-doubt in the journey, from five psychiatric drugs and fledgling operations in Kolkata to becoming a significant player in the estimated Rs 1 lakh crore local pharmaceutical industry?
In true Shanghvi-speak, he responds: “I tend to take both success and failure as part of life. Neither do I get too upset with things gone wrong, nor too elated over something going right.”
D.G. Shah of the Indian Pharmaceutical Alliance, who has known Shanghvi since Sun was a Rs 2 crore company says that Shanghvi is solution-oriented and has the ability to think outside-the-box.
Agreeing with Shah’s observation is a Sun insider who has worked with Shanghvi for over a decade. Shanghvi’s style of functioning is “consultative” and “democratic”, and he takes as many views on an issue before making a decision, he says.
30-year journey
Sun has, in its 30-year journey, seen its share of ups and downs. The more recent and high profile one being, its $454-million acquisition of Israel’s Taro, that was digested after a three-year, multi-country battle and much acrimony.
In the US, Sun is dealing with regulatory issues facing manufacturing plants owned by its wholly-owned subsidiary, Caraco. But Shanghvi remains grounded and understated while dealing with such challenges, cautious on turnaround timelines and projections. A stark contrast to some other business houses that seem eager to please the investor community, points out a fellow industry colleague.
Focus on positives
The real challenge Shanghvi says candidly, is the “lack of knowledge”. There needs to be a constant process of learning, and in his case, it is through reading and observing others, he says.
An eternal optimist of sorts, grim ground realities do not worry him. And to young entrepreneurs charting their course on a canvas punctuated with scams and corruption, he says: “ It’s like this, there are millions of things happening in the country …the question is what …you want to focus on.”
There are negative things in the newspaper, but there also are many positive things in the country, he adds. “So if you really look at the last 30 years …the GDP growth that we have had and the GDP growth we are going to have in the next 50 years … there is a huge opportunity for people to grow,” he says.
Success and succession
So is the younger generation at Sun, as driven as he is? “I think it is a very interesting issue. I don’t think I was (driven)… My desire to do well went on increasing based on my success,” he says.
“To judge anyone as ambitious or not ambitious …I am not responding to your question … If you see my growth matrix…they are starting from a much higher stage ,” he adds.
Could that mean that Sun’s gen-next, Aalok and Vidhi, could show interest in other emerging segments? “That is exactly what happened,” says Shanghvi. “My son has a separate business…but works with us also …he works with solar energy,” he says, of his 28-year-old son, an entrepreneur in his own right.
It is about the same age that Shanghvi too had changed track, from helping his father in medicine distribution to actually venture into making medicines.
Giving a rare insight into his views on succession, 56-year-old Shanghvi says: “We have to run this business in the best interest of all the stakeholders …and that is the focus. Look at it personally, almost my entire capital is invested in Sun Pharma equity …even in my children’s interest …the company continuity should be there.”
For Dilipbhai, as he is know in pharma circles, it has been an impressive personal journey. But an industry peer observes of Shanghvi, “after the late Dr Parvinder Singh (who started the erstwhile Ranbaxy) if there is another visionary in the industry, it is him”.