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Tuesday, Feb 05, 2002

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Manufacturing facilities in India -- Heraeus Kulzer plea for more time turned down

Ambarish Mukherjee
Nithya Subramanian


DENTAL products manufacturer Heraeus Kulzer Dental India Pvt Ltd's proposal seeking more time for setting up its manufacturing facilities in the country has been shot down by the Government.

The company had sought an extension of the validity period of its foreign collaboration (FC) agreement for setting up manufacturing facilities in the country after test-marketing its products.

The Secretariat of Industrial Application (SIA) pointed out that under the existing policy, the company had failed to meet test-marketing conditions and had also applied for deletion of the entry-level condition.

The company was initially granted approval to manufacture and distribute dental products, including alloys, denture vase, laginate, composites, teeth and dental equipments. Last year, the company was permitted to test-market products that are manufactured in India.

However, in its latest application to the Foreign Investment Promotion Board (FIPB), the company said that after last year's import policy, whereby quantitative restrictions were removed and imports freed, it has been finding it difficult to put together an economically viable plan for manufacturing activities for its product in India immediately. Meanwhile, it has introduced a range of products in the Indian market.

The company said that to make a manufacturing operation viable, it was important to attain a critical mass. At this juncture, it did not make business sense to commence production for its entire range of products.

Heraeus Kulzer has now sought permission to undertake import and wholesale trading of various brands of dental products in India and provide marketing and after-sales support to various distributors and retailers.

The company has also given an undertaking that it will not be involved in any retail trading activity. It has said that it is committed to manufacturing its products in a phased manner. Its business plan includes product selection. An agreement with the business partner would be finalised by the end of this quarter.

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