Mr.
Vinod Ramnani is the Chairman & Managing Director
of Opto Circuits India Ltd. He is a Mechanical Engineer by
profession. Mr Ramnani is the driving force behind Opto Circuits. Having worked
with organizations in India and abroad, he had a wealth of experience to back
him, when in 1990, he along with Thomas Dietiker (the American co-promoter of
Opto Circuits) and others decided to establish Elekon Industries Pte. Ltd. in
Singapore. Thereafter, Mr. Ramnani initiated a move to shift the manufacturing
facilities to Bangalore and Opto Circuits was formed in 1992 with him as the
Managing Director. He is very passionate and wants to see Opto Circuits scale
new heights.
Opto
Circuits Ltd is now one of the leading developers, manufacturers and
marketers of invasive and non-invasive medical devices in India, with sales
in 56 countries, and operations in India, Germany and the United States. It
also provides ancillary and complementary services such as after-sales service
for the patient monitoring devices. Opto also provides information technology
consulting, global positioning systems and electronic design automation services
in India. R&D facilities are located in the United States, Germany and India.
Its products are used in about 10,000 healthcare establishments such as hospitals,
clinics, primary care centres, veterinary establishments and government agencies.
In a freewheeling
chat with Hemant P. Maradia of India Infoline,
Mr. Ramnani says: “We will invest Rs1.5-2bn over the next year to grow
the business, both products and geographies.”
Tell
us about the recent strategic partnerships forged by Criticare Systems Inc.
– one in Europe and one in US? Throw some light on the nature and duration
of both the agreements?
Opto Circuits'
US-based subsidiary Criticare Systems Inc. will launch three new products in
the non-invasive category. Our German subsidiary, Eurocor GmbH will introduce
two new products in the invasive segment.
Criticare
will launch its first ever modular and green patient monitoring system - eVision
9100. It will also introduce a modular gas bench - Poet IQ 8500H and eTraq,
a compact, portable, multi-parameter monitor.
Eurocor
is ready with Magical, a CE-marked novel drug-eluting option. The product is
set to compete with conventional drug-eluting stent options for some applications.
Freeway, a paclitaxel eluting balloon dilatation catheter for peripheral arteries
will also be launched by Eurocor.
All the
products will be ready for sale one after another in the next 3-4 months.
Which
are the target markets for these products? What is the market size?
Criticare’s
non-invasive products will be sold across the globe. The two Eurocor products
will be marketed in all markets except the US and Japan.The market size is pretty
big. The total addressable market size for all our products is more than US$10bn.
What
kind of an upside do you expect from the new launches?
We are hoping
that the new launches will add a new dimension to our financial performance
going forward. These products are very good in their own space. I can’t
really give you any numbers as of now. But, once these products are in the market,
we will see good growth in the financials.
Earlier,
we could not bid for big tenders because we didn’t have some of these
offerings in our portfolio. With the new launches, we will have a complete range
of products in the non-invasive segment. For e.g. the modular gas bench which
we have developed; only a few medical devices companies in the world can boast
of having this product in their portfolio. A lot of OEMs have shown interest
in our gas bench.
Tell
us about your marketing plans for the new products?
We employ
three methods of marketing our products. One is direct selling, second is through
distributors and the third is to the OEMs. We have around 30-32 OEMs. We have
1200-odd distributors as well. Plus, we get some opportunities for direct sales
such as government tenders and hospitals.
We will
soon start selling these products, but are waiting for some approvals to come.
We will soon sign up with an OEM for selling the gas bench from Criticare and
CO2 modules.
Give
a sense of the new product pipeline?
First, we
want to focus on launching and marketing of the five new products from Criticare
and Eurocor. Then we will consider introducing other products in the pipeline.
We have developed these products in 15-16 months. Generally it takes about 2-3
years to develop such products.
How
do you plan to leverage the low-cost operations in India to manufacture and
market products in the matured western markets?
We have
different markets and different sizes. The Asian markets can be catered to from
India itself. For the US market, we are planning to set up low cost manufacturing
centres in India and the Far East. We have started assembling the monitors in
India. The price is very attractive for the emerging markets. We can bring down
the price by 15-20%.
So, the
products will be designed and developed by Criticare. They will then be assembled
in India.
Do
you plan to completely shift Criticare's manufacturing and R&D operations
to India?
The front
end we will not move out of the US for Criticare. Their technology and know-how
is very good. They have an experience of 20 years. So, I don’t want to
disturb that set-up for Criticare at least for the next few years.
But when
it comes to back-end operations we will provide support from India. Our engineers
in India are already doing this for both Criticare and Eurocor. They do a lot
of designing jobs for Criticare and Eurocor. The designs for the modules will
continue to be done in the US and Europe.
What
kind of investments are you planning for Criticare and Eurocor?
We will
invest Rs1.5-2bn in our subsidiaries over the next 12 months. This is going
to be done in a phased manner.
What
are the plans for non-US markets going forward?
Invasive
products we cannot sell in the US and Japan. Non-invasive products we can sell
everywhere. Other than the US, we see good potential in India and China besides
other Asian markets. We are also focusing quite a bit on the Latin American
and European markets.
What
are the plans for the Indian market? Will this market gradually lose significance
going ahead vis-a-vis overseas markets?
The Indian
market has a great potential with a lot of stress being laid on healthcare from
the Government’s side and also with growing awareness among the consumers.
So, I don’t think India will lose significance for us in the future. We
have to develop products suitable to the Indian market. They should be very
good in quality and reasonably priced.
How
do you plan to grow the Maxcor Lifesience-Micell strategic alliance?
That business
also has a very good potential. Micell has the expertise in coating the stents.
They have a unique technology. We have a tie-up with them. Micell will do quoting
for the various types of stents for us. They have the patent for that technology.
We are in the process of developing one or two products for Micell. We have
to get the animal trials done in the US.
What
was the purpose behind the QIP that you did recently? What is the promoters’
shareholding post QIP?
A portion
of the QIP was used to retire high cost debt. Part of the QIP proceeds will
be used as working capital and growth capital and some in the R&D activities.
Right now, the promoters have around 30% if you take the warrants into account.
Give
us an update on the SEZ projects?
For the
SEZ, we have the land and formal approvals. But, we don’t want to develop
the SEZ and block the money. So, we have started manufacturing out of the Vizag
SEZ. Going forward, the government policies have to be pretty clear on SEZ.
We would like to have 150,000-200,000 Sq. Ft. of space for ourselves in the
SEZ. We bought the land at Hassan at a very reasonable price from the state
industrial development authority.
What
is your message to the shareholders?
We have
been protecting their interests to the best of our ability since we went public
in 2000. We will endeavour to reward the shareholders well in future also.