Adcock plans foray in Indian mkt

ADCOCK Ingram — the pharma business of South Africa’s $3-billion Tiger Brands group — is planning to enter the Indian pharmaceutical market through a joint venture with its Bangalorebased outsourcing partner Medreich Ltd. Tiger Brands has a diverse food and healthcare portfolio in South Africa.
The $500-million company with a leading position in the South African pharma market, had recently formed a JV with Medreich — a Rs 400-crore contract manufacturer with manufacturing plants in India and Europe — to source medicines for other markets. The company would eventually enter the retail pharma market in India through this joint venture, Adcock Ingram MD Dr Jonathan Louw told ET.
The Bangalore-based company already supplies to major drug MNCs and has presence in Europe, South East Asia, Australia, and New Zealand, according to Medreich CEO Rajeev Mehta. The companies would initially invest Rs 71 crore in the JV, in which Medreich’s stake would be around 50%.
The JV would also help Medreich to participate in the procurement of medicines by the South African government. Norms framed by the South African government make it mandatory for suppliers to have a local partner company which reserves a part of its work-force to local ethnic groups and and spends 1% of profit after tax on charity.
The South African government procures medicines worth about $2 billion in a calendar year. The tender business is a high-volume-low value opportunity and is highly competitive, said Mr Louw.
The joint venture with the Indian firm is part of Adcock Ingram’s expansion plans outside South Africa involving a competitive sourcing route.
courtesy:economictimes
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