Nicholas Piramal, Reckitt In Venture Talks

Reckitt & Colman of UK is tying up with Nicholas Piramal for product development and marketing of Reckitt's over-the-counter products (OTC) in India. Although details of the tie-up are not available, the alliance could take the shape of a separate joint venture depending on the outcome of the talks. Industry sources say that the two companies have made an application to FIPB for a marketing alliance and depending on what shape the talks take, a separate company could be floated for the purpose. Sources close to Piramal confirmed that talks are on between the two companies for jointly developing and marketing over-the-counter products.

 

Officials of the Indian subsidiary, Reckitt & Colman of India Ltd, said that talks for tie-ups are routine in the industry. However, they denied discussing the sale of brands or a possible marketing tie-up with Nicholas Piramal. Piramal sources refused to comment on the matter.

The UK parent, Reckitt & Colman, has decided to focus on OTC drugs as part of a strategy to push reputed brands. Although there has been speculation on Reckitt & Colman of India selling off its Disprin brand to Nicholas, this is unlikely to happen. In India, Reckitt's OTC product, Disprin is a Rs 15-crore brand. Other brands in the OTC category are Dettol, Gelore and Geladent.

It would be prudent for Reckitt to tie-up with Nicholas as the latter has an extensive distribution network and Reckitt would benefit by an addition to its marketing strength for pushing sales in the highly competitive over the countet category. Analysts say that Reckitt & Colman has been facing stiff competition from Smithkline Beecham, which acquired the Crocin brand from Duphar Interfran. The UK-based Smithkline decided to source the drug from India and has made huge investments in building capacities for Crocin.

Nicholas Piramal has been scouting for OTC brands as the company is targetting the OTC segment for growth in the years to come.

The chairman of Nicholas Piramal, Ajay Piramal, had earlier said that since the company has few over the counter products, acquisition of brands would be imperative to build up a product portfolio and drive growth in the category.

Analysts say that Reckitt & Colman has been facing stiff competition from SmithKline Beecham, which acquired the Crocin brand from Duphar Interfran. SmithKline decided to source the drug from India and has made huge investments in building capacities for Crocin