The Hindu Business Line : Shasun to invest $35 m in Rhodia Pharma Solutions

In the pipeline
Mr Govindarajan, Shasun's Chief Executive Officer, said there were 14 products in the pipeline at the phase II B stage of human trials, which will be taken through to commercialisation.

LOOKING AHEAD: (From left) Mr Nick Green, President, Shasun Pharma Solutions Ltd, UK, Mr N. Govindarajan, CEO, Shasun Chemicals and Drugs Ltd, and Mr S. Vimal Kumar, Joint Managing Director, at a press conference in Mumbai on Monday. - Paul Noronha

Mumbai , April 3

After sealing the acquisition of Rhodia Pharma Solutions, the Chennai-based Shasun Chemicals and Drugs Ltd is set to invest about $35 million in the acquired company over the next two years.

The investment includes the initial consideration and will go towards enhancing capabilities of the acquired company, Shasun's Chief Executive Officer, Mr N. Govindarajan, told mediapersons here on Monday.

Shasun had announced its acquisition of Rhodia Pharma Solutions, part of the French Group Rhodia SA, in January. But the agreement was signed only recently.

The acquisition is Shasun's first ever through its wholly owned subsidiary Shasun Pharma Solutions Ltd in the UK. The deal brings into Shasun's fold two manufacturing sites at Dudley in England and Annan in Scotland, besides Rhodia's development and custom manufacturing services.

Shasun will look to retain the current management and the 349 employees at the acquired company, according to the Shasun top brass. Also, product rationalisation may not be on the cards, said Rhodia's Mr Nick Green, now President of Shasun Pharma Solutions. Mr Govindarajan said there were 14 products in the pipeline at the phase II B stage of human trials, which will be taken through to commercialisation.

In 2005, the acquired business generated revenues of 60 million euros, though the company did post a loss, said Mr S. Vimal Kumar, Joint Managing Director of Shasun.

The acquisition will be funded through internal accruals, debt and through dilution of equity. Fresh equity will be issued to generate excess cash for future purposes, said Mr Kumar.

Promoters at present hold about 42 per cent equity in Shasun.

Mr Kumar expected the company's combined turnover to be about Rs 800 crore in 2007.

The company expects to add to its capacities locally, through a bulk drug facility in Vishakapatnam, at an estimated project cost of Rs 45 crore.