Financial Daily from THE HINDU group of publications
Friday, Jan 30, 2004
Financial Daily from THE HINDU group of publications Friday, Jan 30, 2004 |
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Corporate
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Announcements Nicholas Piramal set to establish subsidiary in US Our Bureau
Mumbai , Jan. 29 IN an effort to increase its brand equity in the world's largest pharma market, besides getting closer to other "innovative" players in the pharma segment - the Mumbai-based Nicholas Piramal India Ltd (NPIL) is set to establish a subsidiary in the US. The new NPIL outfit would essentially seek to facilitate more custom manufacturing arrangements and strategic partnerships in this market and is expected to commence operations by April 2004, the NPIL Chairman, Mr Ajay Piramal, told analysts here on Thursday. A top brass with the company said that it was not a late entry in the US market, given that a host of Indian and foreign companies are already active in this market. "Our strategy is different from other companies that are in the generics or chemically-equivalent drugs business. We look to partner with the innovator companies for long term supply agreements," the official said. ICRA reaffirms rating Meanwhile, rating agency ICRA reaffirmed the MAA and A1+ ratings assigned to the Rs 100 crore debenture and Rs 200 crore short-term debt programme of NPIL, subsequent to its decision of acquiring Canere Actives and Fine Chemicals Pvt Ltd and amalgamation of its wholly owned subsidiary, Sarabhai Piramal Pharmaceuticals Ltd. "ICRA's rating reaffirmation is based on NPIL's dominant position in the domestic formulations industry, its high profitability, and strong cash accruals. While NPIL has established a leading position in several key therapeutic segments of the domestic formulations industry, it still derives an export turnover of Rs 76.4 crore for the nine-month period ended December 31, 2003, accounting for 9.1 per cent of its total sales," the agency said in a communiqué. Further, it pointed out that the acquisitions were likely to strengthen NPIL's exports and domestic formulations business, while Canere will allow NPIL to increase its exports to global markets. SPPL would bring in certain operational synergies for the domestic formulations business. Meanwhile, the acquisition of Canere will allow NPIL to grow its API (Active Pharmaceutical Ingredients) business through custom manufacturing over the medium to long term. However, sales to regulated markets of the US and Europe would be subject to getting the necessary regulatory approvals. NPIL expects a speedy USFDA approval for this facility on account of its international quality, proximity to its existing USFDA-approved facilities and common documentation & quality control procedures post acquisition. Though over the short term, ICRA expects an increase in gearing to enhance NPIL's financial risk, this is expected to be offset by the benefits brought in by the acquisition of Canere and SPP, the agency said. Moreover, high profitability, strong cash accruals and no major expansion plan would allow NPIL to reduce its debt levels and further boost its current strong coverage indicators over the medium term.
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