Against an actual industry demand of 35 crore units (each unit is one bottle of 500ml), there has been capacity creation for 70 crore units, which was the expected demand. The annual growth in this industry is 10 per cent to 12 per cent. But with capacity utilisation being poor - the larger players are facing intense competition and witnessing an erosion of margins. Wockhardt, Core and Albert David are the leading players, who constitute two thirds of the market. There is also anmultinational player in Fresinius which had a tie up with Mafatlal originally and is now operating independently.

Mount Mettur, based in Chennai (with another unit in Bhopal), can be classified as one of the smaller players (around 75 lakh units capacity per annum), and is now looking at 1 crore units this year. The capacity addition is coming from its Gummidipoondi plant near Chennai where the company is planning to manufacture IV fluids in polypropylene (PP) containers using blow-filled sealed technology.

The company has all along been selling IV fluids in glass bottles through its thousand stockists. It refused to die despite the onslaught of plastics into the industry and huge capacities coming to play, though others in the small scale have been wiped out. The reason: "We have a good name for consistency in supplies and quality (recycling of glass bottles is not allowed in our company)," Mount Mettur executive director AK Govande said.

Despite the fact that margins are far lower for IV fluids inglass bottles (a glass bottle costs Rs 3.25 vis-a-vis Rs 1.20 polyethylene bottle) and innumerable disadvantages such as weight, hair line cracks, Mount Mettur IV fluids are still widely accepted. One of the greatest advantages is that fungus can be more easily detected in glass bottles than in opaque polyethylene ones.

But margins are telling for Mount Mettur despite operating at 100 per cent capacity. So in order to cash in on its good reputation in the industry, Mount Mettur has invested around Rs 20 crore (totally) for installing a spanking new premises using blow filled seal technology and polypropylene material. Polypropylene is far better than polyethylene as it can be exposed to high temperatures of 120 degrees in autoclaves after sealing, to ensure total sterilisation of product.