India has announced a 50:50 JV with Chinese company Hubei
Biocause Pharmaceutical Company to manufacture and sell
Prasad, managing director, Granules India, says this is
the first step towards strengthening their relationship
and fully integrating backwards into their supply chain,
which is the model for Granules India.
adds that the actual assets that are being transferred
to the joint venture will be about $8 million. CNBC-TV18
shares with domain-b its interview with
you give us more details of the joint venture, what's
your role going to be in it and how much of an investment
would you be looking at making?
This company has been our supplier of ibuprofen for quite
sometime. This is the first step towards strengthening
our relationship and fully integrating backwards into
our supply chain, which is the model for Granules India.
the parent company is spinning this ibuprofen plant into
a separate entity and we would be owning 50:50 equity
would be managing the manufacturing operations and Granules
India would be lending its market reach, market expertise
and market understanding in the regulated markets to Biocause.
much money will you be pumping into this joint venture?
I am not at liberty to talk of how much we are pumping
in. But all I can tell you is that the actual assets that
are being transferred to the joint venture will be about
is the volume of ibuprofen that you will manufacture and
how this tie translates in terms of margins? Would it
enhance margins or is ibuprofen not a very high margin
That's right. Our entire model so far has been on high
volume and low margin products. We make our total value
by high volume but ibuprofen is a step improvement from
what we have been doing. Products like paracetamol were
not giving as much margins as ibuprofen would give us.
product for which we really are looking at higher margins
is metformin. Metformin, which has been approved in the
US in some of the ANDAs gives us good margins and even
ibuprofen approved in the ANDAs in the US would give us
a better margin.
would be the key markets that Hubei and your venture would
We are actually working with some companies in the United
States for manufacturing finished dosages of Ibuprofen
for them, so it will basically be the United States and
Canada and a little into Europe too.
this joint venture at some later stage also include paracetamol
No, this is only for ibuprofen API.
us an idea of a basket of PFI (pharmaceuticals formulation
intermediaries) that Granules hopes to add because like
you mentioned, you have four key elements and then you
have combinations of those?
That's right. The four backbone APIs today we have are
paracetamol, ibuprofen, guaifenesin and metformin. Then
we have different combinations of paracetamol with some
or metformin with some other ingredients.
now on we plan to add at least a two minimum every year
and we will be focussing again on high volume APIs, could
be products like Naproxen and a few other products.
much revenue are you targeting from this JV?
The JV at full capacity production would give at least
a Rs110 crore of topline.