An Experienced Newcomer

Even for those who are familiar with Indian contract research organizations, Mumbai's Research Support International Ltd. (RSIL) tends not to ring a bell. Yet its researchers have been providing chemistry services to foreign customers for decades.

Since the late 1980s, chemists at what is now RSIL have been conducting synthetic organic chemistry projects to support Solvay's drug discovery efforts. The cooperative arrangement flowed from the fact that Solvay had owned a 40% stake in RSIL's parent, Duphar Interfran Ltd. (DIL), for decades. DIL was launched 50 years ago by an Indian family, the Rajus, who still maintain a controlling interest in it.

When DIL was jointly operated with Solvay, it was a major pharmaceutical company listed on the Bombay (Mumbai) Stock Exchange. It made raw materials, active pharmaceutical ingredients, and finished drug formulations. The joint venture was dissolved in 2000 after Solvay decided it wanted full ownership of its operations in India.

The breakup was traumatic. Because Solvay was one of DIL's main customers and business partners, there were layoffs and plant closures from 1999 until 2003. Irfan Bandukwalla, director of RSIL, recalls that, for a time, there were barely 100 DIL employees left at the firm's main site in the Mumbai suburb of Thane, down from 1,000 in the heyday of the joint venture.

For nearly five years, DIL managers were so preoccupied with managing the dissolution of the joint venture that they could think of little else. But Bandukwalla stresses that the separation proceeded amicably. "Many Western companies have had bad experiences with their Indian partners. We're not in that category," he says.

The period during which DIL was slashing its operations was one of tremendous growth for India's chemistry contract research sector. It's a trend that Bandukwalla quickly spotted when he joined DIL in 2003. Just before joining the company, he had been involved in setting up Degussa's operations in India, and prior to that he had worked for years in the business advisory division of the auditing firm Arthur Andersen. It was obvious to him that contract research was a business DIL knew well.

In January 2005, RSIL was officially formed as DIL group's chemical contract research unit. It had a staff of 40 and a single customer, Solvay. Collaboration in the area of organic chemistry R&D had survived the joint-venture breakup.

RSIL's growth has been rapid since its launch. The company already has a staff of 90, with 17 people working in a kilogram-scale production lab, 44 performing synthesis work, 12 people in an analytical lab, five in a biotech lab, and a support staff of 12. Arvind K. Manian, RSIL's research group head, says he has seven major customers divided about evenly between the U.S. and Europe.

RSIL has two basic arrangements with its customers. Under one, it accepts custom synthesis projects with the understanding that it gets paid only after meeting customers' specifications. In the other, it offers "full-time equivalent" (FTE) services, whereby customers pay for the time and expense of assigning work to RSIL scientists. "Custom synthesis is a low-risk way new customers can try us out," Manian says.

Expecting steady growth, the firm is constantly looking for promising new recruits, and it is hiring them at the rate of about seven per month. Manian says he prefers hiring new graduates and training them for about a year before assigning them to FTE projects.

The growth of RSIL is leading to a revival at DIL's Thane site. Bandukwalla expects that the unit's first lab facility will be fully occupied within a few months, with 120 scientists on the payroll. By then, RSIL wants to have started building a new facility that is large enough for 200 scientists. Bandukwalla believes RSIL is both a new company and one with tradition. "We're a new company with a 50-year history," he quips.