How Aditya Burman a loss-making diagnostic business into a Rs 100-crore entity
Dabur Pharma had only 45 collection centres, doing just high-end cancer diagnostics; losses were mounting, and revenue dwindling. So, when the management wanted to shut down the company in 2006-07, Aditya bought it for a pittancebusiness Updated: Apr 26, 2016 14:08 IST
Five years before Aditya Burman returned from the University of Kansas in 2002, the Burman family had decided that none of them would hold an executive position in Dabur. So Aditya joined as an intern at Dabur Pharma, a company that his father Anand Burman had incubated inside the Dabur Group.
The pharma business had a research wing, which did high-end cancer diagnostic reasearch. That fascinated Aditya. While he sharpened his skills at the pharma business, he tried to scale up the research business.
“The rule was you don’t work with Dabur and do things on your own,” says Aditya. His father had told him: “Here is the business (though it was just a small wing). Handle it.”
Soon, Aditya found himself torn between his role as an intern with Dabur Pharma, which employed a few hundred people, and the head of the research business.
In 2007, Dabur Pharma was spun off as an independent company. That’s when the problems started. The research wing was small; there were only 45 collection centres, doing just high-end cancer diagnostics; losses were mounting, and at a mere Rs 15 lakh in 2002-03, revenue was dwindling. So, when the management wanted to shut down the company in 2006-07, Aditya bought it for an amount, he now says “was hardly anything.”
Aditya was now on his own. But, running Oncquest Laboratories (that’s what he called it) was not an easy job. Within a year Aditya wanted to expand internationally to Malaysia and West Asia. He even appointed a CEO. But soon, the CEO’s death left the company’s expansion plans in jeopardy.
Aditya was now back at the helm. He put aside all international expansion plans, and decided to concentrate on domestic growth. In a couple of years, thanks to some help from his family and business lessons from Dabur, the company was on track to recovery.
But Oncquest’s diagnostics were still expensive. So the company started developing its own kits, bringing down costs substantially. A $2,000-3,000 test in the US costs Rs 300-500 in Oncquest. It also validates kits for other pathology laboratories.
The results are visible. From Rs 15 lakh in 2002-03, revenue shot up to Rs 100 crore in 2015-16.
THE BOOSTER DOSE
Once the cancer diagnostic business was stablised, Aditya decided to go for the bigger market — general diagnostics. The market had many organised and unorganised players, Dr Lal PathLabs being the biggest competitor.
“We are now in over 12,000 locations. There is also a central lab, which does high-end oncology work,” says Aditya.
“We took the top-down approach. We did the high end first and then got into routine stuff. Most of the other guys did the opposite,” he adds.
A sound strategy, considering it helped Oncquest scale up its low-end business faster than competitors.
But what was it like during the transition phase?
“In 2008-09, the problem was how do we scale up? It was a tiny little business, barely making any money,” recalls Aditya.
So he turned to the Entrepreneur’s Organisation (EO), Delhi, for help. Aditya was a board member of the organisation. Its other members, with businesses all over India in various industries, helped him find the right real estate for collection centres in various cities, set up human resource (HR) team, and advised him on how to scale up operations.
Oncquest now runs 23 labs for hospitals and other nursing homes. It is also expanding in clinical-trial support, such sample collection and reporting, for pharma companies. Aditya realised that just doing high-end diagnostics will not take Oncquest any further.
“We didn’t want to give the commodity business to other labs,” he says. But, unlike speciality, the sample collection and general diagnostics business require scale. He had learnt that from his early years at Dabur.
When he started on his own, he waited to meet doctors for hours. “No one met me because I was my father’s son,” says Aditya. But all that has changed. He has a sales and marketing team that does it for him. And Oncquest, he says, is also ready to go international, once again.