Nicholas Piramal To Produce Five Novartis Products

Ajay Piramal-promoted Nicholas Piramal India (NPIL) and Swiss pharma major Novartis have entered into a contract manufacturing agreement to produce five products for the latter. The products will be manufactured at NPIL's Mahad plant in Maharashtra.

The manufacturing agreement, having a fixed validity period, will benefit both companies. While NPIL would be able to utilise its facilities better, Novartis will have a fixed local supply without having to actually set up a manufacturing unit for these five products.

NPIL is also in talks with a couple of European companies for a possible joint venture for its fine chemicals business. Parleys are currently at a preliminary stage, sources close to the company said. NPIL is looking at a possible 50:50 partnership for the business.

 

The 100 per cent NPIL fine chemicals subsidiary, Global Bulk Drugs & Fine Chemicals, achieved break-even in the first quarter of the current year and is expected to show a profit in the third-quarter. The company now plans to bring in a new partner to expand operations, the sources said.

Earlier, the group had finalised a strategic equity alliance with British chemicals company, La Porte, for its bulk drugs business. The tie-up is expected to see the partner make an approximately Rs 50-crore capital infusion in a new bulk drugs facility at Hyderabad.

NPIL holds 49 per cent in La Porte Piramal, while the UK firm holds the remaining equity.

Nicholas Piramal had earlier spun off its glass and bulk drugs businesses. NPIL, as a pure pharmaceuticals company, will enhance shareholder value by facilitating an improved return on capital employed, transparent management and higher dividend payout, the sources added.

NPIL, at present, holds a 60 per cent stake in the glass company, Gujarat Glass. Forty per cent of the equity is shared between IndOcean Packaging, a fund set up by Chase Capital Partners & Soros Chatterjee Group's the India Private Equity Fund, supported by the Overseas Private Insurance Corporation & Citicorp Investment Bank.