Hester to set up animal vaccine unit in Tanzania.

Animal vaccine maker Hester Biosciences Ltd. recently announced that the company's board of directors had approved the setting up of an animal vaccine manufacturing unit in Tanzania to cater to the African market.

The project, which will cost approximately $18 million, will have the capacity to produce 1.5 billion doses of vaccines every year. The estimated revenues from the project is $30 million a year at full capacity.

Hester will have equity share capital of $4 million, while it has received secured loan and grants commitment worth $14 million from the Bill & Melinda Gates Foundation.

According to Rajiv Gandhi, managing director, Hester Biosciences, there is a big potential for the animal vaccine business in Africa as 80 per cent of the vaccines there are imported.

“Besides common diseases, there are Africa-specific diseases, which currently remain unaddressed, thereby causing economical losses to poultry and livestock farmers. The project will mainly manufacture vaccines against Africa-specific diseases, besides having the capability as well as the capacity to manufacture a wider range of vaccines against other commonly occurring animal diseases,” Gandhi said.

The construction is scheduled to be completed by January 2020, and the first commercial batch will be produced by November 2020.

Hester is also setting up a distribution network in Africa, which will service backyard as well as organised poultry and livestock farmers, alike.

The board has approved the new wholly-owned entity, Hester Biosciences Africa Limited, as an export oriented unit registered under the Companies Act 2002 of Tanzania.

Hester Bio registered a 27 per cent growth in net profit at Rs. 9 crore on a net sales of Rs. 37 crore for the fourth quarter ended March 2018. For the financial year 2018, the company's net profit stood at Rs. 31 crore, up 23 per cent on net a sales of Rs. 135 crore.

Earnings per share (EPS) increased by 27 per cent to Rs. 10.59 for the quarter and Rs. 35.92 for the fiscal.

The board recommended a final dividend of Rs. 6 per equity share of Rs. 10 each (or 60 per cent) for the financial year 2017-18.

Hester Biosciences shares lost over 7.5 per cent on the stock exchanges to close at Rs. 1,500 on Monday.

HBL