|India's first private cord blood banking company is all set to set up shop to market stem cells, says Asia Cryo Cell vice chairman and CEO Abhaya Kumar. Venkatachari Jagannathan interviews the entrepreneur extraordinaire. |
Chennai: It was a new arrival in the family that actually led to the birth of Asia Cryo Cell Private Limited, muses Abhaya Kumar, vice chairman and CEO. "I was in the US when I received news of the impending arrival of our first grandchild. Around the same time, I heard for the first time from a friend about umbilical cord blood stem cell banking. As this facility was not available in India, I got in touch with Cryo Cell International in the US." He soon sewed up a 20-year technical collaboration to float India's first private cord blood banking company.
Cord blood is the remaining blood in the new born's umbilical cord and the placenta (the part of the ovary, which during pregnancy nourishes the foetus. The blood is filled with stem cells – the master cells responsible for the production of all other cells in the body – that have the ability to regenerate into other cells in the body. Normally, stem cells are found in bone marrow.
So what is cord blood banking? It is similar to a blood bank. At the time of a child's birth the cord blood is collected and taken to the cord blood bank for processing to harvest stem cells. The stem cells are preserved cryogenically (normally for 20 years) for potential medical use in the future – the medical equivalent of life insurance.
A chemical engineer, Kumar is also the joint managing director of the Rs318-crore Shasun Chemicals and Drugs Limited. Shasun is the world's largest producer of Ibuprofen and the second largest manufacturer of Ranitidine. Kumar was among the finalists of Ernst & Young's entrepreneur award in the year 2003.
According to Kumar, the total investment in building the infrastructure is around Rs14 crore. The company is also heavily investing in brand building activities. "We expect to break even before March 2006," he says. Marketing the services under the brand LifeCell, Asia Cryo Cell has close to 1,000 customers and the number is increasing, Kumar claims.
The company's storage facility is located in Chennai. Plans are to set up storage facilities in other parts of Asia. Within India, the company will be expanding through franchisees.
Excerpts from an interview:
What kind of people come to you for this 'bio-insurance'?
Around 1,000 customers have enrolled from all over the country and other countries like Dubai and Lahore. More and more people are realising the importance of having this bio-insurance for the entire family. This is reflected in the over 50-per cent growth every month. Initially, only the super rich and the rich wanted to avail this facility. But now the profile is more diversified. As we offer installment payment facilities, many middle and lower middle class families have been coming to us.
We have a good mix of celebrities, industrialists, businessman, self-employed, senior professionals and government employees. We also have people with adverse health history background who constitute less than 25 per cent of our enrolments.
How do you store and what is your storage capacity?
Our current capacity is 25,000 samples. As already mentioned LifeCell intends to become one of the largest in the world in three or four years. So our current capacity can be expanded to even 1,00,000 samples and beyond in phases. LifeCell stores stem cells in special Cryo Vials.
What plans do you have to expand your storage and collection centres?
Our storage facility is on the outskirts of Chennai city - about 20km from the airport. This is where all the samples are banked currently. But we have LifeCell centres in Chennai, Bangalore, Mumbai, Delhi, Ahmedabad, Hyderabad which act as marketing and customer care offices.
In the next few months LifeCell centres will be coming in Kolkatta, Kochi, Surat, Nagpur, Indore, and in Dubai, Malaysia and Sri Lanka. The company has been awarded the marketing rights by Cryo Cell International Asia except China and Japan.
By December 2006 we will have about 24 centres covering the Asian region. Of these storage facilities might come in Malaysia, Middle East and at other places based on the market needs.
All our expansion outside Chennai is based on franchisee model. The franchisees bring in the necessary investment but function as our branch office for all practical purposes. The company will have a total control on every aspect of the business at every point to ensure a smooth functioning. The office premises, the assets will all be in the name of the company.
We are setting India's first dedicated stem cell transplant centre for haematology and oncology in Sri Ramachandra Medical College, Chennai. In addition, we have plans to invest more than Rs50 crore in bringing other therapies like neurological disorders, heart related therapies and solutions for diabetes.
How is competition in this field? How different are you from the others?
At this point we are not aware of any full fledged and licensed player who is promoting private stem cell banking exclusively. There is a player who, we think, offers public banking and one player who operates without necessary approvals.
We are the pioneers and we will continue to lead the industry in all aspects - stem cell products, banking technology, stem cell research and stem cell therapy to be recognised as the most reliable and complete stem cell company in the Asian region. Since the competition is not active we will not be give comparative notes, but our strengths are our technology, our collaborator, our world class banking facility, our commitment, our network. We are the first and only stem cell banking company to be awarded ISO 9001:2000 certification in India.
On your marketing strategy..
We adopt a multi-pronged strategy to market our service. We educate and create awareness amongst the medical fraternity through seminars, workshops, presentations, etc. We create awareness amongst expectant parents through promotional material kept at the clinics, literature given to the gynaecologists, through advertisements in leading magazines and by taking part in various exhibitions, through the information kiosks set up at public places like malls.
We also actively participate in health related articles in news papers, magazines and also through presentations to employees of large organisations. We also partner with leading hospitals of each to promote this concept.
You seem to be advertising heavily. What is your promotion budget?
Our marketing investment is upwards of Rs3 crore for the first year and 75 per cent of it spent on advertising and other mass media like hoardings. Our media vehicles are leading family magazines like Readers Digest and leading women's magazines like Femina, New Woman, Meri Saheli, Chitralekha, Swati.. We also use hoardings to spread the awareness.