Rhone-Poulenc Plans Joint Ventures

French pharmaceuticals and chemicals major Rhone-Poulenc (R-P)plans to multiply its Indian turnover 3.5 times by the year 2000. It also proposes to set up key joint ventures in the country by 1998. R-P is in talks with some key players for a nylon 6,6 project and is likely to discuss a $10 million downstream joint venture for silicones with some companies, including Reliance Industries. R-P is also evaluating the acquisitions route in India.

Top-level executives in R-P said nylon 6,6 was a priority area for the French major in India and that SRF was one of the parties R-P was negotiating with. The French company said the venture could be located either within India or elsewhere. Du Pont is planning a nylon 6,6 venture in India and had to face some opposition relating to its location.

 

Rhone-Poulenc's group vice-chairman Jean-Marc Bruel said: All I can say is nylon in India is an important issue. Senior executives handling R-P's international businesses said the joint venture was being planned for 1998, but other arrangements are also not ruled out. According to Rhone-Poulenc's Asia-Pacific strategy in fibres and polymers, India, Indonesia, Thailand, Vietnam, Philippines and Malaysia were clubbed together as far as attractiveness of investing is concerned. Future growth and cost advantages from localised production were two of the key factors which makes India attractive for polyamide or nylon 6,6.

Rhone-Poulenc's Asia Pacific strategy in polyamide 6,6 hinges around the expected growth of polyamide consumption in Asia, and the advantages of polyamide 6,6 over polyamide 6. R-P believes it has a competitive edge in polyamide 6,6 as it has the expertise in the business. Bruel said India was a question mark before 1991, but thereafter the situation has been looking up every year. There is skill for innovation in the country. We will also be on the lookout for new associations and acquisitions, Bruel said.

Christian Grenier, president of Rhone-Poulenc Silicone Enterprise, which is a part of the French multinational's chemicals sector, said R-P was in talks with two or three companies for a downstream venture for silicone applications. In fact, R-P already has a massive market share in India in special rubber for nipples, a silicone downstream application. We may also talk to Reliance, he said.

Mulls stake hike in arm

Rhone-Poulenc has said it is weighing the option of whether or not to hike its stake in the Indian arm, Rhone-Poulenc India, from the present 40 per cent to 51 per cent.

Top Rhone Poulenc executives handling international operations told Business Standard: ``This is a sensitive issue and cannot be decided quickly. But since most of our competitors have now done it, it is an option we would have to look at''.

Rhone Poulenc's stake in the Indian company is held by Rhone Poulenc Rorer, the pharma flagship of the French multinational. Around 30 per cent is held by financial institutions, while the rest is in public hands, since RP India is a listed company. Since it is a listed company, the issue will have to be weighed in greater detail, RP sources said. The price of the RP stock on BSE closed at Rs 682 on Saturday.