Karnataka 2nd PUC Business Studies Notes Chapter 13 Entrepreneurship Development
Seeds of Virchow
→ Until 1981 Narayan Reddy, M.Sc. Organic Chemistry, had been working for a pharmaceutical company where he had developed a molecule. He was contemplating commercial utilisation of that molecule by setting up a small-scale unit – much smaller than what he actually started. Actually, he met two medicos, who had just returned from a Gulf country and were looking for some productive avenue for investment of their savings (remember the Gulf crisis?), Reddy’s idea appealed to them.
→ Thus, the willing entrepreneurs met- where there is a will there is a way- and the seeds for the venture were sown. After a detailed study of the technical, economic, commercial and financial feasibility of the idea of manufacturing a bulk drug from the molecule, ‘Virchow Laboratories’ was started in 1982 as a SSI with an initial investment of Rs. 28 lakhs – Rs. 8 lakh in the form of equal contribution by the three promoters and Rs. 20 lakh funding from the Andhra Pradesh State Finance Corporation (APSFC).
→ Project implementation was even more challenging as he set out to acquire land, construct factory, purchase equipment, negotiate with suppliers, potential customers and obtain environmental, drug control and other clearances. Initially, it was he who acted as the pivot of the enterprise wheel. In the course of time, a strong managerial team was put in place and thanks to persistent emphasis on good management practices, Virchow emerged as the world’s largest and the best producer of the basic drug from the chosen molecule.
→ In fact, web search on ‘Virchow Laboratories’ takes you to the home page saying “Welcome to Virchow Group of Companies”, the group comprising 4 companies with Virchow Laboratories being the flagship company.