City-based pharmaceutical company Granules India is setting up a bulk drugs and intermediaries manufacturing facility in Visakhapatnam with an investment of $20 million (around Rs 90 crore) in joint venture with Belgian pharmaceutical firm Ajinomoto OmniChem.
The JV, equally owned by the two companies, is targeted to offer high-value active pharmaceutical ingredients (APIs) and intermediaries to pharmaceutical players.
"We are excited to enter the contract manufacturing sector through a partnership with OmniChem, which is a highly reputed company with an established track record in the sector. In addition, Granules will have an opportunity to manufacture formulations for the JV APIs," Krishna Prasad, managing director of Granules, said here today.
The promoters hope to earn revenues of Rs 400 crore from the joint venture facility by 2015. Construction of the plant will start in November this year and is expected to start production by January 2013, according to Prasad. Granules reported revenues of Rs 476 crore for FY11.
This is a first joint venture for the Belgian company in India. The facility would mean a saving of 30 per cent in production and 50 per cent in capital costs, according to Gwin Bompas, managing director of Ajinomoto OmniChem.
The company will supply products from this facility to its existing customers abroad. The plant will have a capacity to handle 4-6 products at a time, and has a product pipeline related to central nervous system (CNS), cardio vascular diseases (CVD) and oncology. Starting from high-value, low-volume APIs and intermediates for the existing customers, the company would also focus on custom manufacture of new chemicals in future.
The pharmaceutical industry is increasingly focusing on the $234 billion generics market, in particular APIs where more than 80 per cent is for the generics market. Additionally, an increasing number of pharmaceutical companies are looking at outsourcing their various manufacturing needs. Granules is looking at tapping into this market.