The 65-year old Arya Vaidya Pharmacy shows how a traditional business can adapt to modern marketing techniques to leverage on its inherent strengths.

Chennai: How does an Ayurvedic pharmaceutical company expand? By leveraging its strengths, of course. The Coimbatore-based, 65-year-old Arya Vaidya Pharmacy (AVP) group is doing just that, by developing its over-the-counter (OTC) product portfolio, introducing a new range of food products, expanding its services sector and signing collaboration agreements with overseas and Indian companies to market its products and services.

Food items like jams, biscuits and herbal ketchup would join the group''s portfolio of 500 products, which includes Ayurvedic medicines and OTC products like herbal shampoo, baby oil, soaps, pain balm and others.

The Rs25-crore group''s flagship company is the Arya Vaidya Pharmacy (Coimbatore) Limited. Companies under the group umbrella manufacture and market OTC products. It also has trusts that run a college, conduct research, get into R&D tie-ups, and do other activities. Group outfit Heal Ayurveda Pharmacy Limited manufactures and markets products like soaps, shampoos and pain balm, under the Heal brand.

In a small way, the group has already entered the food business with its innovative chyawanaprash biscuits. Traditionally, chyawanaprash is a mixture of several herbs in a paste form. It was an American who first wondered whether the paste could be made into biscuits, and AVP agreed to implement the concept.

AVP is also looking to sign more collaboration and franchise agreements in India and abroad, for its products and services. In the healthcare sector, AVP has agreements with the Apollo Hospitals chain and the Sadhu Vaswani hospital in Pune, to operate their ayurvedic treatment wings. A similar tie up has been entered into with the Indo-American Centre, which is putting up a 60-bed hospital in Hyderabad.

In the hospitality sector, AVP has signed up with the Taj group of hotels (nine hotels in eight cities), Sterling Holiday Resorts (two resorts), Club Mahindra (one resort) and some other hotels, to offer services like Ayurvedic treatments and massages.

In the fast moving consumer goods sector, AVP has placed its seal of approval on Hindustan Lever''s Ayush brand of products. It also provides the medical expertise to man the Ayush clinics. There are 13 Ayush centres in five cities.

Apart from the obvious financial returns, the logic behind these tie-ups with hotels, resorts and others is to popularise Ayurveda through the collaborators'' promotion campaigns and to convert their clients to traditional healing ways. In addition, the centres also double up as points of sale for AVP''s OTC products.

The group is also looking outside India. While talks are on to start franchisee centres in Muscat and Africa, AVP wants to expand its presence in the Gulf, Malaysia and Singapore. Managing director P R Krishna Kumar says that AVP gets over 10 enquiries a day for setting up centres overseas.

The food venture is altogether different. Here, it is a question of leveraging waste products. "We are getting into food products to derive more value out of our expensive inputs," says Mr Kumar. For instance, AVP sources several tonnes of dry raisins from Afghanistan each year. After boiling the raisins to prepare the rasayans and kashayams, the pulp is thrown out. "We found the pulp could be used to make jam," says Mr Kumar. AVP plans to extract value out of its other exotic and expensive inputs too. There are also plans to burn waste biomass to generate steam for heating the huge vats and vessels used to make the drug concentrates.

Healing the physician
Kumar says that only 22 out of the 500-odd Ayurvedic medicinal products, which AVP manufactures are profitable. The prices of the rest just about meet the costs. Some are even priced lower than their production cost, to make them affordable.

Deputy general manager (technical) Dr A Sindhu explains: "We prepare the medicines strictly as per the ayurvedic texts and do not use herb extracts. This means a long manufacturing process." Some formulations that are derived after boiling the herbs repeatedly for several days together, sometimes as many as 101 times. Others are made after grinding the inputs for up to 16 hours a day, for 30 days, in automated pestles.

With more and more players getting into this field, the prices of herbs have gone up on the increased demand. "Some plants are seasonal and have to be bought and stored. As a result, prices go up," says Dr Sindhu. For example, the herb Kanchanarai, which earlier cost around Rs5 per kg has now gone up to Rs50, but AVP is not able to pass on the increase to its customers. There are some inputs used in ophthalmic preparations that cost around Rs3,000 per kg.

Since it sources as many as 550 herbs, AVP has to be doubly careful with its inputs. There are suppliers who adulterate their supplies with spurious twigs and roots. "Each lot has to be tested at our lab, so that only genuine herbs are sent for processing. So running an ayurvedic industry is easy and difficult — easy if one closes ones eyes, and tough if one keeps them open," says Dr Sindhu.

As standardisation has to start at the raw material stage, AVP is also looking at contract farming of medicinal plants. Dr Sindhu also says that the company is seriously looking at local herbs that are effective substitutes, in terms of healing properties, for the ones mentioned in the traditional texts. "The agenda is two-fold. First, it would reduce our costs, as some herbs are sourced from the faraway Himalayas. But the the macro benefit is that Ayurvedic science would develop further and there will be a steady availability of herbs for production."

A visit to AVP''s Kanjikode factory in Palakkad district is really a wonderful experience; one can inhale the aroma of exotic herbs that are boiling in huge vats. One could even say that every visitor gets treated to an exotic herbal steam bath, just by wandering around.

Hospital in the pink of health
Meanwhile, at the Arya Vaidya Chikitsalayam — AVP''s Ayurvedic hospital in Coimbatore — patient traffic is steadily on the rise. Located in a four-acre campus with many trees and a Dhanwantari temple, the 120-bed hospital is seeing better days now. The average occupancy is around 50 per cent, and there are air-conditioned cottages catering to the well-to-do and non-resident Indians (NRIs). Last year, the hospital treated 60,000 people, both in- and out-patient.

Medical director Dr K G Raveendran says: "The number of patients who chose Ayurveda as their first choice is going up." For a long time, Ayurveda and other traditional systems of medicine were considered as a treatment of last resort. Only those patients who could not be cured by modern medicine used to take Ayurvedic treatment.

The compartments between different medical systems are now much less watertight. AVP assistant director (technical) Dr U Indu Lal says that Ayurvedic doctors do resort to the ''allopathic'' route for diagnosis wherever required — by prescribing diagnostic tests — and sometimes even refer patients to regular doctors in urgent situations when a faster cure can be had.

With the concept of rejuvenation resorts catching up, AVP is planning to build cottages in a different locality as the space in the existing hospital complex is fully utilised.

Research takes off
AVP has been awarded a grant of Rs1.2 crore from the US National Institutes of Health (NIH) — through its National Centre for Complementary and Alternative Medicine — to develop and consolidate long-term scientific collaborations between researchers at AVP and some American universities.

According to director (research) Dr P Ram Manohar, the focus of the grant is capacity building. A pilot clinical trial of rheumatoid arthritis, comparing ayurvedic treatment with standard medical treatment, will be conducted and the results will be documented. The pilot trial will form the basis for larger clinical trials, to be proposed in subsequent grant applications.

"The purpose is not to evaluate Ayurveda," he adds. The grant will be utilised to assemble a core team, as well as establish a good lab and IT network. A second grant is expected soon, when other players will be involved, to bring in scalability.