Financial Daily from THE HINDU group of publications
Friday, Jul 19, 2002
Financial Daily from THE HINDU group of publications Friday, Jul 19, 2002 |
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Corporate
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New Projects Orchid to set up Chinese facility for cephalosporin — Forms 50:50 joint venture Our Bureau
Mr K. Raghavendra Rao
CHENNAI, July 18 ORCHID Chemicals & Pharmaceuticals Ltd based here has joined hands with North China Pharmaceutical Corporation, Shanghai, to promote NCPC Orchid Pharmaceuticals Co Ltd, a 50:50 joint venture for manufacture and marketing of cephalosporin bulk actives and formulations in China. At a press conference to formally announce the project in Chennai today, Mr K. Raghavendra Rao, Managing Director, Orchid Chemicals, said that the $25-million project with a 300 tonne per year capacity will produce cephalosporin-based bulk drugs and finished dosages such as sterile, crystalline and lyophilised injectable forms of cephalosporin. The facility for the crystalline product will go on stream in January 2003, that for lyophilised form in April 2003 and the non-sterile bulk facility in September 2003. The facility is coming up at Shijiazhuang, about 300 km north of Beijing, China. Orchid and the North China Pharmaceutical Corporation (NCPC) will take an equal stake in the $10-million equity; banks in China will chip in with NCPC guaranteeing the loan. Pending completion of the non-sterile bulk production facility, Orchid would supply the non-sterile product for the first two years for conversion to the final product. To Orchid, its revenue streams include the fee and royalty for technology it will bring to the joint venture and the income from the supply of bulk form. The joint venture could well pave the way for diversification into other therapeutics later, Mr Rao said. China has emerged as one of the most competitive production bases, and the single largest market for pharmaceuticals apart from some of the developed countries. The market for pharmaceuticals is estimated at $15 billion, growing at 10 per cent per year and `anti-infectives' account for 29 per cent of this market growing at 12 per cent, annually. The cephalosporin market is estimated at $2.2 billion. China is a major component in Orchid's growth strategy and an important base for collaboration, he said. Mr Lu Weichuan, Chairman, NCPC, said that Orchid's technological capability and NCPC's marketing strength will strengthen both the partners. NCPC is also looking to market in India, through Orchid, some of its fermentation-based and biotechnology products. NCPC is among the largest pharmaceutical companies in China and is part of a group that has a turnover of $680 million. The group has expertise in a wide range of pharmaceutical products including fermentation-based products, recombinant DNA products and pharmaceuticals. It has a global presence with 17 joint ventures in the US, the EU and Japan, 30 factories and a workforce of 18,000 employees. Orchid Chemicals is a leading pharmaceutical company involved in the manufacture of cephalosporin and non-cephalosporin bulk actives, formulations and neutraceuticals with exports to more than 70 countries.
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