Serum Institute picks up 50% in glass vial maker Schott's Indian JV

Deal value not disclosed; former co-promoters Kaisha exits JV

Vaccine maker Serum Institute of India (SII) has picked up a 50 per cent stake in specialty glass company Schott AG’s Indian joint venture, Schott Kaisha, from the former co-owners Kairus Dadachanji and Shapoor Mistry for an undisclosed sum.

While the deal helps SII to have more control over its supply chain (glass vials are a critical component of vaccine packaging), it also helps the Kaisha group to focus on their other pharmaceutical ventures.

Sources in the know say that now Dadachanji and Mistry would focus on bringing in new pharmaceutical products – both drugs and drug delivery systems – to the frontend of the market. Kaisha Group companies such as Sovereign Pharma are contract manufacturers and make drugs like remdesivir for Cipla and other companies which market it. Kaisha Group now wants to have a frontend presence itself through brand launches, sources indicated.

Schott Kaisha is a leading Indian manufacturer of pharma packaging products like vials, syringes, ampoules, and cartridges that are used to package medicines.

Adar Poonawalla, CEO, SII said, “Even the best medication can’t reach the patient without the right packaging. Securing this supply chain is of strategic importance. Schott is the perfect partner for us to do this because of their expertise and global network.”

Poonawalla said that as a longtime customer, they use Schott Kaisha’s vials, ampoules and syringes to store our vaccines including Covishield.

With this acquisition, SII is securing its supply of pharma packaging amid rising global demand.

German Schott, owned by Carl Zeiss Foundation, has clocked a turnover of 2.2 bn euros in the fiscal year 2020. The 130-year old company has presence in 34 countries and thus also presents a good opportunity for SII to tap the high-demand market of glass packaging of pharma products like vaccines, biologics, and other drugs.

Frank Heinricht, CEO Schott says, “As India has steadily established its position as a global pharmaceutical hub, we are delighted to strengthen our footprint within the Indian pharma supply chain. We are looking forward to strong impulses from this partnership. It is an excellent example of shifting towards new cooperation models, with greater synergies between pharma manufacturing and packaging production.”

Kairus Dadachanji, Managing Director, Kaisha Group said that they are now expanding their 'horizon' to cater to the front of the pharmaceutical value chain. "We want to work more closely with the medical community, and channelize our strengths by bringing ease of drug administration to our healthcare workers and highly effective medication for our end consumers. My son, Rishad and I will remain in close contact with the industry through our other businesses, namely Sovereign Pharma, Kaisha Lifesciences, Kaisha Packaging, Kairish Innotech and Packwell Industries."

The joint venture will definitely continue to supply its customers in India and abroad, says Eric L’Heureux, the new Managing Director and former longstanding Head of Operations.

“We have significantly increased our production capacity in India. Over the last three years we have invested roughly Rs 600 crore to set up two new plants in Umarsadi, Gujarat and Baddi, Himachal Pradesh, and to secure uninterrupted supply in our existing facilities during the pandemic.”

Both Schott and SII plan to invest further in the business.

On the packaging end, Schott has already exceeded its target to deliver vials for more than 2 billion vaccine doses through 2021. The company is providing glass vials globally to key vaccine manufacturers.

 

• Schott is a German specialty glass company

• Had 50:50 JV with Kaisha Group in India

• Schott Kaisha invested Rs 600 cr in last 3 yrs to build capacity

• Serum Institute secures control on packaging material supplies

• Kaisha promoters now plan to focus on their other pharma businesses