For Smithkline Beecham Growth Lies In Acquisitions

The SmithKline Beecham group has decided to acquire major pharmaceutical brands in India to spearhead its ambitious growth plans. The $ 12.4-billion group is also planning to utilise the country as a base to exports its products to countries lying to the east of India.

SmithKline Beecham Plc., the multinational pharmaceutical and healthcare products major, has set up a 100 per cent subsidiary -SmithKline Beecham Asia Private Ltd - and, it will be primarily responsible for acquiring well known Indian brands.

SKB Asia will also be responsible for a portion of the companys total exports out of India, while the rest will be taken care of by the Bangalore-based SKB Pharmaceuticals Ltd and the New Delhi-based SKB HealthCare Ltd - its two existing subsidiaries. SKB Healthcare makes the popular health drink `Horlicks.

 

We are talking to some Indian companies as part of our efforts to acquire well-known brands both in the pharmaceutical as well as in the healthcare segment, said Simon J Scraff, managing director, SKB HealthCare Ltd. Scarff is also a director on the board of SKB Pharamceuticals Ltd.

As part of its efforts to grow via acquistions, SKB Plc had recently acquired `Crocin, one of the oldest brands of paracetamol drugs in the country, from Dufadr Interfan. Subsequently, this was licensed by it to SKB Asia Pvt.

SKB Asia also recently launched `Aqua Fresh - a toothbrush brand. The company has exclusive marketing rights to the product while the manufacturing job has been assigned to third parties.

India is perhaps the only country where the international pharma and healthcare group has two subsidiaries which are public limited companies. Elsewhere, the operations come under branch offices of the parent company, Scarff said.

On being questioned why SKB continues to have two separate entities in the pharmaceuticals and the healthcare segments in India, Scraff said: We are constantly evaluating the propsects of the two companies in the country but as of now we do not feel the need to merge them.

Both run profitably and have a combined turnover of nearly Rs 850 crore. SKB HealthCare had notched up a revenue of around Rs 500 crore in 1996 and is growing at a rate which is over the industry average of 9 to 10 per cent, he added.