Vadodara-based pharmaceutical major Alembic Ltd, which is planning to raise funds through a rights issue this fiscal, has chalked out an expansion plan which will be implemented in two phases in the next two years.

The company is also planning to set up a formulation plant in Himachal Pradesh this year, mainly to cater to the exports markets.

Alembic on Monday had informed the Bombay Stock Exchange about its proposed board meeting to be held in Mumbai on September 1 to consider the issue of equity shares to the existing shareholders.

The company has changed its earlier plan to borrow funds as the company at present owes Rs 240 crore (Rs 2.40 billion) to various financial institutions and banks, and also in the form of fixed deposits and other documents.

"We have decided not to go for further borrowing, though the company has been making constant efforts to pay back its existing debt. We have rather decided to raise funds from our shareholders to fund the ongoing expansion projects which are worth around Rs 65 crore (Rs 650 million)," Rajkumar Baheti, director and president (finance), Alembic, said.

"In addition to the upgradation of our main plant in Vadodara for which we have recently sought the approval of the United States Food and Drugs Authority, we also need funds for setting up a new plant in Himachal Pradesh. We are at present looking for land and discussions are at an advanced stage," Baheti said.

Alembic has also sought regulatory approvals from the drug administrations of the United Kingdom and South Africa for the Vadodara plant which has been given a facelift. The company has already invested Rs 50 crore (Rs 500 million) in its plant in Panelop where another plant for formulations also has been set up by it.

Both the plants together have a capacity to bring in a turnover of Rs 100 crore (Rs 1 billion) by fiscal 2005-05.

"The proposed plant in Himachal Pradesh will be in addition to our Panelop plant. We are expecting a significant jump in our formulation business, especially from exports. Also we are gearing up to meet the global demand post-2005," Baheti said.

Alembic has already included the US and the UK as its major destinations during the next two years and also looking for the South African market aggressively.