April 16 - 29, 2001

Nature in his net – Propelled by Herbal extracts, Sami Labs Ltd is on the way to the Rs.500 – crore league by 2005.


Muhammed Majeed is a globetrotter. As founder of $25-million New-Jersey-based Sabinsa Corporation, he travels around with a tonne-load of material and a mission: to popularise ayurveda and education people on the medicinal benefits of Indian herbal extracts. Equipped with is educational tools, Majeed begins his day out on Sabinsa on Wheels (SOW) at 8 am. Typically, his audience is a group of 20-odd pharma manufacturers who sit through his day-long presentations. Finally, by the end of the day, he manages to sow the seeds in the minds of his listeners.

For Majeed, like most hard-working Indians, it has been tough journey. In 1974 Majeed, then 23 years old, with an undergraduate degree in pharmacy from Kerala University, decided to go West. With just $8 (the maximum amount that emigrants were allowed to remove from India at that time) in his pocket he went to the US. There he landed a maintenance job with a pharmaceutical manufacturer. "Soon I switched over to production and in a short span of three years headed the manufacturing operations, "he recalls. To pursue his studies he moved to the East Coast, where he joined Pfizer’s R & d department. By 1980 he got his Master’s degree in industrial pharmacy and six years later he earned his doctorate.

With a strong educational back-ground, Majeed had no probelem switching jobs. He soon won an assignment as a senior research pharmacist with Cranbury – based Carter-Wallace. Subsequently, he joined Lakewood, New-Jersey-based Paco Pharmaceuticals. Finally in 1988, with rich knowledge in research, he decided to set out on his own. So under the banner of his wife's name, Majeed started Sabinsa.

Recalling those early years Majeed says, "When I started the business in 1988 I was fully focused on the pharmaceutical business, not in the natural medicine business. After struggling along for two years it became obvious that any approval from the US Food and Drug Administration (USFDA) would take 5 – 7 years. During the initial years, i.e. 1991-93, I was trying to establish a market for ayurvedic products for the first time in the US. This was the biggest challenge I ever faced.

Most Americans at that time (some even today) are not aware that an ancient system of medicines existed in India, which by all counts is the mother of all medicines. The very term ayurveda, coupled with the difficult names such as Gugulipd (difficult for the American tongue), was a challenge in itself. Persistence paid off in the form of one company agreeing to try my first ayurvedic product in 1991,"

"By this time I ran out of my life savings of $250,000. I had to make a decision either to give up the business or get into another area which is not totally regulated by the FDA. Nutritional products were the first choice. The first product I developed for the US nutritional market was ‘directly compressible’ slow –release Niacin granules." Niacin is a good cholesterol – lowering agent and belongs to the B group of vitamins. The concept helped Majeed turn his ailing business around into a small profitable venture.

At this point he returned to his roots – figuratively speaking – and started to look at some of the plant products available in India. "Although the Indian herbal scenario was big and there were a number of products available, it was difficult to find good documentation on the clinical effectiveness of these products to introduce into the markets. I had no choice but to embark on a massive effort to collect whatever documentation was ever published on every one of the products that I sold in the US," he explains. "Please keep in mind that in 1990-91 the Internet was not that proficient in providing the information. I have spent substantial time researching from available Indian publications and compiled the documentation required to present the products to the market."

As Majeed’s exploration in cholesterol control continued, he came across the guggul plant that yields a gum resin which is the starting point for many natural products aimed at cholesterol control. That marked the launch of Sabinsa’s flagship trade marked product – Gugulipid. "The new ingredient was quickly lapped up by Nature’s Herbs, a TwinLab company. They were the first to accept the new material," says Majeed.

His return to India in 1991 saw the birth of Sami Chemicals & Extracts Ltd., which in the year 200 was renamed Sami Labs Ltd. (SLL). Based in Bangalore, the company’s first export was Gugulipd a standardised extract. "Once the first product was accepted the first roadblock was cleared, "says nephew C.A.Anzar, a director at SLL. Anzar started his career with the company virtually as an office boy doing odd jobs while assisting his uncle.

Year after year, SLL’s product list expanded. In 1992, hydroxy citrin acid from Garcinia Cambogia (kokam fruit which is used in curries as a substitute for tamarind in Kerala, Karnataka and Maharashtra) was introduced, which within two years became a hit in the US market. It has the property to interfere with the deposition of fat in the body. Hence, it became a major product for weight management in the US. "this product earned the company the development and export award in 1994-95 from the Spices Board of India," says M.A. Rahiman, full-time director at SLL.

In early 1993 SLL opened up the Singasandara unit at Bangalore from which it exported Boswellia serrate (dhup tree) extracts to the Us. Sabinsa followed this up with the launch of Boswellin, a trademarked anti-inflammatory phy-tonutrient. This was followed by a number of standardised herbal items from India. Coleus forshohlii came along in 1996, and by 2000-1 it had became a major product for the treatment of obesity.

Majeed’s method of research involves focusing on a target and expending every effort to achieve that target "with the understanding that if you fail you will learn from that failure"…evidence to this fact, he cites his own experience. "We spent four years researching the safe and proper manufacturing aspects of selenium in the form of L-Selenomethionine. We believe this is the most biologically available form of human nutrition. Today we are the largest producer of this substance in the world."

Being a researcher, he believes that one has to look at how best one can exploit an existing material in a new way. For example, the exoskeleton of shrimp, garbage for may, is the starting point for the manufacturing of cosamine sulfate. Consequently the products from SLL’s four manufacturing units (Shimoga, Kunigal, Singasandara and Mysore, all in Karnataka state) exemplify value-addition to traditional material. For instance, there are a number of Indian companies exporting raw herbs, of values ranging from $6 to $8 per kilogram, but SLL exports standardised extracts of these materials and realises twice the value. To provide an example: Piperine in pure form is available for export from Cochin and is sold at $75-80 per kilo; SLL exports Bioperine, a patented product consisting of the powdered extract obtained from bacl pepper, which fetched around $200 per kilo. Another example: chilli oleoresin is exported at $25-45 per kilo depending on the pungency; SLL manufactures and markets the actual pungent principle capsaicin at an export value of $-3000 per kilo depending on the grade.

The list goes on…

Another product from India is turmeric extract, which is sold in the international market for around $25 per kilo. SLL extracts the powerful antioxidant content and sells it to the neutraceutical market for $45 per kilogram. In the area of synthetic fine chemicals SLL has pioneered specialised products for manufacture in India. An example is L-Selenomethionine. "The export price of this item is around $4000 per kilo, "says director Raj Bammi, considered a veteran in the pharmaceutical industry. Bammi had earlier brought Cipla up from Rs.1 crore to Rs.1,000 crore in turnover when he left in 1997 to join Majeed.

Today SLL boasts a list of over three dozen products. Another unique feature that has helped the company in its business plan is the development of these produts in association with Sabinsa, which secures contracts with other US company to manufacture certain chemicals in India. "We realise almost double our cost of production. For example, our cost of production for one particular extract is around $450 and we export it for around $800 per kilo," explains Rahiman. A carotenoid called Lutein extracted from marigolds and is used for ocular nutrition in the US neutraceutical industry, is sold at $150 a kilo.

SLL received its first Us patent as early as 1996. By 2000 it had seven, withan additional 25 European and world patents pending. In 1999 the company started an R & D centre and tissue culture laboratory in the Peenya Industrial area and set up a biotechnology centre at Nelamangala where trial production of Lactospore, a probiotic, has already begun.

In financial terms SLL, which started with Rs.25 lakh in 1990, has now grown into a Rs.50 – crore company. In fact, within a span of three years to March 2000, sales more than doubled from Rs.18.59 crore (1997-98) to Rs.44.5 crore. During the same period the profit after tax also zoomed from Rs.1.36 crore to Rs.5.89 crore. "we have been ploughing back the profit into the business," says Majeed.

As for the future: "SLL will continue to manufacture and sell traditional standardised extracts as well as nutritional and pharmaceutical fine chemicals. In addition, we will develop a product management team to handle broader responsibilities- adapting as many pharmaceutically useful herbs from around the world to Indian soil conditions and assisting Indian farmers with cultivating them. SLL, will do the extraction and export. International colloborations will form a important part of our strategy, "says Majeed, who is clear that SLL will develop research-based intellectual property and explore its subsequent commercialisation to prepare for the future post – 2005, when WTO patent regime comes into force. "SLL will join the Rs.500 – crore league then," he declares.