Subscribe Ajit Patel is a pharmaceuticals tycoon who has never made a single medicine drug or remedy yet Goldshield Group the company he founded in
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Ajit Patel is a pharmaceuticals tycoon who has never made a single medicine, drug or remedy, yet Goldshield Group, the company he founded in 1989, is one of the fastest-expanding pharmaceuticals companies in Britain. Listed on the London Stock Exchange since 1998, the company is known to every chemist and health food shop in Britain as the name behind numerous prescription and over-the-counter medicines and remedies. Over the last few years, the now-tarnished sheen of the biotechnology industry rubbed off on the whole pharmaceuticals sector and anyone making pills was presumed to be a potential goldmine of wonder drugs. All the while, Mr Patel, Goldshield's chairman and chief executive, refused to be swayed from the core business - marketing laxatives, nipple soothing creams and rheumatism cures in large quantities, for what he calls "the lower end of the market".It is a philosophy that has paid off. Goldshield, which operates across western Europe and is expanding aggressively into the US, is one of the best performers in the sector.
For the year ending 31 March 2000, turnover was £52.7m, up from £34.6m the previous year, with pre-tax profit at £9.4m (up from £5.2m) Gross margins were 75.4 per cent (up from 73.9 per cent). Figures released yesterday show pre-tax profit at £5.5m in the six months to 30 September, against £4.1m a year earlier.What makes Goldshield even more curious for a drugs firm, is that it has never waivered from Mr Patel's philosophy of doing no pharmaceutical research, having no warehouse facilities and not actually manufacturing a single pill or unguent. The company buys licences to make drugs from major international players who have moved on to newer, more lucrative products. It outsources the manufacture of the drugs, and concentrates on marketing them to retailers and through direct sales.
"Our competence is not manufacture, it's not research, it's not storing and warehousing, it is marketing and sales," says Mr Patel "That's what we do. Trying to develop competences in other areas is simply inviting trouble."His business philosophy may be unusual, but it might come as little surprise to those familiar with the business success of Britain's Patels. A study of the media's rich lists indicates that if your name is Patel you are seven times more likely to be among the country's financial elite than someone called Smith. Two other inferences are: one, that rich Patels are likely to be self-made, having come to Britain with next to nothing, since many were East African Indians stripped of their possessions and ejected by Idi Amin's psychopathic regime in the early 1970ss.