Piramals To Help Reckitt Peddle Its Wares

Reckitt and Colman India is entering into a tie-up with a pharma company of the Piramals to set up a joint venture firm for marketing and sale of its products.

Reckitt and Colman, makers of the Dettol brand, will tie-up with the Piramal company, Global Health Care, and is holding talks for taking a majority stake in the new company, its managing director Ashok Pradhan said.

We have decided on having Piramals as our partner for the venture but talks are still on about the level of equity holding, Pradhan said, adding both partners had expressed their desire to hold majority stake.

 

The new company will market and sell all the pharma products Reckitt and Colman has introduced in the country as well as all the future pharma products the UK-based parent has in its stable but is yet to introduce in India.

We have good pharma products but were unable to get the real support of the medical profession.

So we scouted for a company which has the muscle to reach out to doctors and wide distribution channels to market over the counter (OTC) pharma products, Pradhan added.

Reckitt and Colman India, subsidiary of Reckitt and Colman Plc, manufactures Dettol, Robin cloth whitener, Disprin, Lysol, Mortein mosquito repellent and Cherry shoe polish.

Pradhan said the companys products needed greater penetration in the rural markets and the new joint venture with Piramals, who already had a company to market its OTC products, would give them the needed thrust.

This would be a strategic alliance that could be finalised in a months time and comes at a time when we are taking a big rural thrust this year, Pradhan revealed.

Reckitt and Colman has decided to focus on six core categories, including antiseptics, surface cleaners, pest control and lavatory care, and there would be increased ad spending in these areas.

With spending power on rural areas increasing, Reckitt and Colman is expanding its rural network this year and the new tie-up would expedite the entire process, Pradhan said.

The Rs 400-crore company has identified towns with a 50,000-plus population and 20,000-plus population in urban areas for expanding its network.

The UK parent has decided that in its worldwide strategy, India would be a top priority country in that if it requires resources, it will be made available for acquiring companies, he said.

Asked whether Reckitt and Colman India was planning to acquire companies in the same field, Pradhan said, We are exploring options and possibilities.

Pradhan said only OTC pharma products would be marketed by the new joint venture company, but refused to specify which were the products. Reckitt and Coleman Plc has many products that are in the pipeline to be introduced in India as the market is now ready for it, Pradhan said.

He said the joint venture would not mean the parent company bringing in more money to the country or raising stake in the Indian subsidiary. He said this year there would not be too many product launches as the company had brought in four new products last year.

We have decided on having Piramals as our partner for the venture but talks are still on about the level of equity holding

Ashok Pradhan, Managing Director, Reckitt and Colman India