Financial Daily from THE HINDU group of publications
Tuesday, Nov 29, 2005
Financial Daily from THE HINDU group of publications Tuesday, Nov 29, 2005 |
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Corporate
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Mergers & Acquisitions Hikal picks stake in Sinochem arm Our Bureau
MUMBAI: Hikal Ltd has entered into a joint venture agreement by acquiring a minority stake in one of Sinochem Corporation's subsidiaries. The agreement marks Hikal's formal entry into the Chinese market, Mr Jai Hiremath, Hikal's Vice Chairman and Managing Director, told Business Line. While no financial details were disclosed, he said the deal completes Hikal's supply-chain. The Chinese company will supply Hikal the bulk-ingredient. Hikal will in turn do the value-addition and the finished product will be marketed in Europe through Marsing, a Denmark-based company in which Hikal had picked up a majority stake, he elaborated. Further, he said that Hikal was still scouting for acquisition opportunities. The company was looking to strengthen its presence in the North and Lain American markets, he said. Hikal has sourced bulk ingredients from China in the past, but the deal with Sinochem is strategic, he said, explaining the significance of the deal. The Chinese market has a lower cost structure and Hikal has the US FDA approved plants, he pointed out. "This joint venture will help Hikal improve its cost base, as we see many sourcing opportunities of raw materials and intermediates for our API's (active pharmaceutical ingredients). The association with Sinochem will open up new avenues for marketing and sourcing of products in different markets." It is already sourcing intermediates from Sinochem for one of its products, a note from the company said.
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