The Hindu Business Line : Hikal in drug supply pact with Degussa

Hikal Ltd has signed a long-term agreement with German specialty chemicals company Degussa for the supply of pharmaceutical intermediates and active pharma ingredients (APIs).

The agreement allows Hikal to work with patented companies on innovative compounds, said Mr Jai Hiremath, Vice-Chairman and Managing Director of Hikal. No details, however, were available on the size of the agreement.

The agreement is for five years, to start with, and Hikal is already working on a product in the lifestyle segment, he said. Three more products had been identified, he added.

There wouldbe investment in expanding manufacturing capacity to support this deal, he said. The company had recently raised about Rs 100 crore, part of which will be invested in a new plant in Bangalore, he said.

Degussa is the global market leader in specialty chemicals, especially in pharmaceuticals. In fiscal 2004, Degussa's 45,000 employees worldwide generated sales of 11.2 billion euros.

Meanwhile, Hikal is in the process of restructuring its operations overseas and Mr Hiremath indicated that rationalisation of people and products was on the cards. On the manufacturing side though, there would be investments in scaling up its facility in Germany, he said. Hikal acquired a majority stake in Marsing & Co, a Denmark-based bulk drug marketing company, in 2004. The following year, it formalised an agreement with China-based Sinochem Corp.

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