The Hindu Business Line : Granules, Chinese co form jt venture

Health highlights
Biocause, a $65-million company, is the fourth largest manufacturer of Ibuprofen in the world. It has a capacity of 3,800 tonnes and 4 billion tablets.

Hyderabad , Oct. 13

Granules India Ltd (GIL) and Hubel Biocause Hellen Pharmaceutical Company (Biocause) of China have agreed to form a 50:50 joint venture entity to manufacture and sell pharmaceutical APIs (Active Pharmaceutical Ingredients), starting with Ibuprofen.

In the joint venture, to be known as Granules Biocause, the Hyderabad-based GIL will acquire a 50 per cent stake. The manufacturing assets of Biocause, located in Jingmen, Hubei Province of China, which currently manufacture ibuprofen, will be transferred to the venture.

Giving details of the agreement signed to newspersons here on Thursday, Mr Vaidyanathan Nateshan, General Manager, Business Development, GIL, said assets worth $8.25 million would be transferred to the venture. The manufacturing assets have been valued at $6.5 million and the balance is the cost of regulatory approvals.

Terming it as an all-cash deal, but preferring to keep the deal value in private domain as requested by the Chinese partner, Mr Nateshan said GIL expected to reach a topline of $25 million from the venture, at current capacities of production of Ibuprofen, at the end of the second year of operation.

Betting big on Ibuprofen

The entire transaction is expected to be completed in the next 90 days. Biocause, a $65-million company, is the fourth largest manufacturer of Ibuprofen in the world. It has a capacity of 3,800 tonnes and 4 billion tablets. The company's Director of API, Mr Xioa Yunhua, said in a statement "GIL has excellent presence in the regulated markets and will thus become our growth driver".

Mr Krishna Prasad, Managing Director of GIL, which specialises in manufacture of pharmaceutical formulation intermediates (PFIs), said the company was betting big on Ibuprofen in the next few years. It would be the single largest customer for the new venture. "We are also discussing with some US companies for finished dosage of Ibuprofen," he said.

Though the growth of the Ibuprofen market in the last few years has been 3-4 per cent, there is an expected shake-out and a jump in growth. GIL would focus on large-scale APIs. Its new manufacturing plant with a capacity to make 12 billion tablets near Hyderabad is expected to start commercial production by March 2007.

An investment to the tune of Rs 60-70 crore had been made on the facility, which would begin with a production capacity of 6 billion tablets, Mr Prasad said.

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