Dishman pharma forms JV to make API in Saudi Arabia

SIDF offers $55 million soft loan to the JV company for 15 yrs

Dishman Pharmaceuticals and Chemicals Ltd has formed a joint venture company to manufacture active pharmaceutical ingredients (API) in Saudi Arabia with three partners and expects to complete work on the facility in 15 months time.

"We have invested $9 million to pick up 30 per cent stake in the newly formed $100 million company CAD. Arab Company for Drug Industries and Medical Appliances (ACDIMA) has 15 per cent stake, Spimaco, one of the largest formulation manufacturers in the Arab world owns 20 per cent while Capital Advisory Group owns 25 per cent. Saudi Industrial Development Fund (SIDF) has offered a $55 million soft loan to the joint venture company for 15 years," said JR Vyas, managing director of Dishman Pharma. He did not divulge further information on the project.

Meanwhile, Dishman Pharmaceuticals will invest Rs 150 crore to set up four contract manufacturing facilites at its upcoming special economic zone project in the first phase. It is also in the process of investing Rs 150 crore to expand its existing facility at Bavla, and is expecting its Saudi Arabia project that will manufacture disinfectants to start commercial production in the last quarter of 2010.

Dishman Pharmaceuticals plans to invest Rs 500-600 crore over the next five years in the SEZ. "Work on the first phase will start in the first week of January and will take 15 months to complete.", Vyas said. The Pharmaceuticals & Chemicals Special Economic Zone (SEZ) of Dishman Infrastructure Ltd (DIL) has been notified by the central government recently. DIL is investing Rs 400 crore to develop the infrastructure of the SEZ.

Dishman Pharma is also investing Rs 150 crore to enhance its Bavla contract manufacturing facility by 1000 square meters. It currently has around 4300 square meter floor space. Dishman Pharma plans to fund this net Rs 300 crore investment through internal accruals and non-convertible debentures.

As for the disinfectant manufacturing project, Dishman Arabia, a 50:50 joint venture between Dishman and Saudi Arabia-based Takamul, it has received $9 million soft loan from SIDF for 15 years.

In another significant development, Dishman Pharma has commissioned its new vitamin-D analogue facility at Veenendaal, in Netherlands last month.

The company acquired this facility from Solvay Pharmaceuticals , Netherlands two years back and invested Rs 35 crore to set up this facility. With this facility, Dishman Netherlands will be the only company in the world having more than Seven Vitamin-D Analogues manufacturing capability.