Merial Sees $1.86bn Sales By 2000, Draws Plans For Asia-Pacific

Merial, the new megacorp which will be created by bringing together the animal health and poultry genetics businesses of Rhone Merieux, a Rhone Poulenc group company, and some of Mercks businesses sees itself at the very top of the ladder, with sales at $1.86 billion in the year 2000. Merial, which will formally be in place a few months down the line, has also chalked out a specific five-year vision for its businesses in the Asia Pacific.

In the year 2000, Merial is forecast to clearly be ahead of competition globally, since the synergies achieved by merging the business lines of Rhone Merieux and Merck will make it an undisputed leader in animal health and poultry genetics. Individually, however, they are not expected to top the charts by that year.

 

Rhone Merieux executives told visiting journalists from the Asia Pacific the year 2000 would see, assuming there was no Merial, Pfizer at the top, followed by Novartis (another product of a global merger), Rhone Merieux at number three, Bayer and Merck, in that order. But the creation of Merial would propel the new company right at the top, followed by Pfizer ($1.75 bn), Novartis ($1.08 bn) and Bayer ($1 bn).

The figures drawn up in Rhone Merieuxs estimate come from market growth estimates, planned figures, forecasts or announcements made by the various companies for the estimate which considers Merck and Rhone Merieux separately, while for the estimate considering a single identity, Merial, the figures are based on a 8.8 per cent increase for the merged entity and a 7 per cent industry average increase for the rest.

According to Rhone Merieux, the joint venture, Merial, identifies synergies in chiefly three areas. Sales increase will be achieved through a combination of Merck and Rhone Merieux sales forces added to product line synergies, especially in the United States and Europe, for cattle and pets.

There would also be an optimisation of costs due to the combined structure allowing for definite savings.Besides, it would also have the largest research and development budget in the industry.

On the Asia-Pacific front, Merials vision for the next five years hinges on three aspects: maintaining leadership in vaccines becoming the leader in pharmaceuticals becoming a major player in the Chinese and Japanese markets.

Its sales objective is of $300-350 million, and of 900 employees. In the Asia-Pacific, Merial has drawn up country-specific plans of action. In China, it plans to establish a second joint venture to become the leader in poultry vaccines, and would also work with the countrys ministry of agriculture to penetrate the pig market. In Indonesia, it plans to establish a local production base with its distributor, while in Thailand and Philippines it plans to support the government in the control of diseases like foot and mouth disease (FMD) and rabies. In Japan, it would launch new product lines through its two joint ventures. In India and Vietnam, it plans to set up joint ventures and local production facilities.