Global Giant Merial To Assess India Afresh Shortly

Merial, the new global giant which would be created by merging Rhone Merieux, Rhone Poulenc's animal health company and the animal health business of Merck, will assess India afresh once the actual structure is created a few months from now.

While the idea is to search for new joint ventures for animal vaccines, there are some key problems which need to be sorted out by the new corporate entity before it establishes a major presence in the $117 million Indian animal health market.

Jerome Gervais, vice president, corporate affairs, animal and plant health sector of Rhone-Poulenc, told Business Standard the key issue to be decided would be the distribution network for Merial products. While Alembic has replaced the Damania group as a distributor of Rhone Merieux vaccines, the problem before Merial would be to decide whether Merck's distribution or that of Alembic or any other entity could be utilised for the purpose. Talks are also on for a possible joint venture in India.

 

R-P executives said the basic issue in India in the animal health sector was of reaching the vaccines to the destinations in the absence of infrastructure which could preserve the vaccines. Besides, the small farms are not organised properly, as a result of which it is difficult to reach the products easily to them, who would be the main users.

Rhone-Merieux's main strategy for India would be to consolidate existing products in India through joint venture projects. In this, it comes together with countries like Vietnam, where similar ventures are being planned by the company once Merial comes into being.

But there are other problems to grapple with. One is the high duty structure in the country, and Rhone Merieux has been through 180 per cent duties. This makes the products uncompetitive in the local market, Rhone Merieux executives say. For poultry selection, Rhone Merieux already has an existing joint venture with the Venkateshwara group, V H Breeding Farm.