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Aurobindo forms Russian manufacturing JV

By Gareth Macdonald , 08-Sep-2011
Last updated on 12-Sep-2011 at 15:29 GMT

Contract manufacturing organisation (CMO) Aurobindo Pharma has teamed up with Russian supplement maker OJSC Diod to establish a manufacturing joint-venture.

The new enterprise, Aurospharma, will operate a new manufacturing facility that is planned for in Moscow's Podolsk district, at which it will produce non-penicillin and non-cephalosporin generic drugs and over-the-counter (OTC) drug products.

The joint venture, ownership of which is split 50-50 by Aurobindo and Diod, will also take over Diod’s existing pharmaceutical manufacturing business CJSC Olifen.

The intention is to supply the Russian, Belarusian and Kazakhstahi pharmaceutical markets when the facility is fully operational at the end of 2013.

Vishnu Sriram associate vice president of Aurobindo said: “Establishment of a JV with the Russian Diod company perfectly weds with our international expansion strategy, in accordance with which we establish partnership relations with competent local companies in the target countries.

The JV format gives us an opportunity to localize our production in Russia. Using the Russian partner’s marketing vision, we will be able to enter the growing and challenging Russian market with greater confidence and expedite our presence in the market.

Pharma 2020?

Aurobindo’s formation of the partnership and plans for local manufacturing capacity are largely in keeping with current efforts by the country’s government to reduce its reliance on pharmaceuticals produced outside its borders – its Pharma 2020 strategy.

The policy – which seeks to encourage drugmakers to set up manufacturing operations in Russia to reduce the country's reliance on imports – has already attracted a number of firms with Novartis, AstraZeneca and GlaxoSmithKline (GSK) being some of the highest profile examples.

In a press statement Aurobindo said that: “This project fully complies with the priorities of the strategy for development of the Russian pharmaceutical industry for the period through 2020 approved by the Russian Ministry of trade.”

However, Aurobindo said it will supply the joint venture with antibiotic active pharmaceutical ingredients (API) and several other products from its manufacturing facilities in India which, at least on the face of it, does not appear to fit with the drive to boost production in Russia.

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