Numico buyout clouds Dumex India prospects

The status of child nutrition manufacturer, Dumex India, the subsidiary of Dutch company EAC Nutrition, remains undecided even as the sale of the latter to Royal Numico NV was intimated to the Copenhagen Stock Exchange today.

EAC has signed an agreement to sell its child nutrition business, EAC Nutrition (Dumex) to Royal Numico NV for 1.2 billion euros ($1.4 billion).

Numico said it intends to focus the activities of EAC Nutrition on profitable growth in the core markets centred on China, Thailand and Malaysia, and would possibly sell its Philippine and Indian activities.

In fact, Royal Numico had exited India in 2003 by selling its Mumbai-based arm, Nutricia India, to a consortium of four Indian companies. The Dutch firm had then stated that its Indian activities, "low-margin start-up operations in dairy and baby food", contributed negatively to EBITA in the first half of 2003.

EAC's brands include Dumex, Protinex, Mamex, Mamil, Dupor and Dugro in Asia, while Numico's owns the Cow & Gate and Olvarit brands.

EAC's India arm had purchased Protinex from Pfizer India for around Rs 35 crore in 2002.

Dumex India's officials, though communicated the global development through a media release, remained silent about the status of the Indian arm.

A single page document from the company merely stated that the global development would have no influence on its daily business, 'which we will maintain as usual' meeting the high-quality expectations of its customers, medical professionals, suppliers and business partners."

Dumex India's managing director Arun Singhal was not available for any further comments or clarifications. An e-mail sent to the public relations office in India could not evoke any response.

Numico NV, Europe's largest maker of baby formula, said in a statement on Monday it would pay cash for EAC Nutrition and launch a 550 million euro equity offering to help finance the deal.

EAC stated in its 2004 annual report that as on 1 December 2004, Dumex India had increased control of Protinex sales to about 75 per cent of India's territories.

The report also stated that land was acquired in Punjab for a production plant and that the facilities were expected to be operational in 2006.