Life Technologies Inc To Buy Out Gibo Brl

The US-based Life Technologies Inc will acquire 100 per cent equity of GIBCO BRL (India) Pvt Ltd, and turn it into a wholly owned subsidiary. Life Technologies Inc, which spends around $20 million on R&D, is a world leader in life sciences and agricultural bio-technology products

However, another US company(Alra International Inc)'s proposal to invest in an EOU unit in NEPZ, Noida for manufacture of bulk drugs like codeine and morphine salts and codeine and morphine derivatives has been rejected by the government as Central Bureau of Narcotics said the items proposed to be manufactured by the company are prohibited by the government except through the government-owned opium factory. Life Technologies Inc (LTI) proposes to make an investment upto $ 3,00,000 through its subsidiaries, affiliates or nominees including Life Technologies Mauritius Ltd.

 

In its application to the Foreign Investment Promotion Board (FIPB), LTI has stated that GIBCO BRL was identified as a shell company for turning it into a wholly owned subsidiary as it has only a nominal paid up share capital. The subsidiary has been justified in view of the proprietary and qualitative nature of the research technologies, and for having access to LTI's international brand name.

The FIPB okayed LTI's proposal in its last meeting. However, based on the recommendation of the department of biotechnology , the board has said that LTI must obtain specific clearances relating to biosafety and environment.

LTI proposes to test market its products in the country for a period of two-three years after which it will set up a lab in India for production of customs DNA libraries which will document DNA and other life sciences-based researches. It will also provide consulting and other technical services. Other optional services which LTI proposes to undertake include RNA isolation, poly (A) selection, library amplification, sequencing of the clone, screening with the clone and screening with LTI proprietary Gene Trapper technology.

LTI would also facilitate research and development activities at Indian research institutes in areas of agricultural bio-technology, cell and gene therapy, vaccine production, human and gnome research and forensics.

The US-based company had said in its application to the FIPB that it would work closely with local customers by providing resources and products to pursue specific research activities.

Through LTI's products and services, GIBCO BRL will provide research scientists access to developing technologies that will help the country provide improved healthcare, higher agricultural yields and improved environmental controls.

LTI supplies more than 3000 products to over 40,000 customers primarily consisting of university labs, medical and agricultural research centres and crime prevention organisations. The investment by LTI would be spread over 3-5 years.

Meanwhile, FIPB rejected Alra Labs' proposal for setting up an EOU unit in Noida with Alra International Inc of the US for manufacture of certain kinds of bulk drugs as they were on the banned list, and can be produced by only government-owned opium factories. The department of chemicals and petrochemicals had supported the foreign companys proposal.

The proposed foreign equity was slated to be 11 per cent amounting to Rs two crore, NRI equity of 32 per cent amounting to Rs five crore on repatriable basis and 25 per cent amounting to Rs 4 crore on non-repatriable basis in the total paid up capital of Rs 16 crore.

The proposal also involved payment of lumpsum know-how fee of Rs one crore. and royalty of 5 per cent on exports for seven years.