India-based Granules – a vertically integrated pharmaceutical manufacturer – will share ownership of the new venture with Belgian-based fine chemicals maker OmniChem.
The new company, which will operate under the Granules-OmniChem Private Limited umbrella, will be a marriage of Granules’ technological know-how, and OmniChem’s sheer muscle power; their extensive customer base.
Granules-OmniChem expects its new facility to open for business in 2013, in the Pharmacity special economic zone (SEZ) in Vishakhapatnam, Andhra Pradesh, with a capital expenditure of over $20m (€14m).
The company will initially focus on high-value, low-volume active pharmaceutical ingredients (APIs) and intermediates for existing customers.
Krishna Prasad, managing director (MD) of Granules, said: “The partnership will allow Granules, from day one, to focus on leveraging our core competency, which is offering high quality products and exemplary customer support with industry leading efficiency.
“Our shareholders will benefit since this will enable Granules to diversify its business by offering high value APIs and intermediates which will increase our profitability. In addition, Granules will have an opportunity to manufacture formulations for the joint venture (JV) APIs.”
However they look to a future in manufacturing new chemical entities.
OmniChem’s Thierry Van Nieuwenhove, Head of the Pharma Fine Chemicals business unit, told In-PharmaTechnologist: “Omnichem is already active in NCE manufacturing out of the three manufacturing sites we have in Belgium.
“Eighty five per cent of OmniChem's turnover is achieved in Custom Manufacture for innovative pharma companies with a portfolio of NCE as well as products.
“In a second phase of construction, foreseen within next 2 to 3 years, the JV will also aim at having capabilities to start manufacture of NCEs at small and medium scale. Customer base for this will be same as current clients of OmniChem.”
Show of interest
Though the opening of the new facility is at least a year and a half away, companies and existing clients have already shown an interest in outsourcing fine chemical production.
When In-PharmaTechnologist asked Van Nieuwenhove if any companies had shown interest he replied: “Yes, Omnichem's main current activity is custom manufacturing for pharma and start-ups companies.
“Our target is the same customer as we deal with today - large, medium and start-ups innovative pharma companies in Europe and in US.”
“There is a need in the industry for "Best of both Worlds" approach. We see that this JV will be growing to a reasonable scale, targeting within five years about 50 per cent of current OmniChem capacity.”
On the bandwagon
The new venture follows a growing trend of European companies reaching out to India for high quality low yield products; traditionally not seen in the ‘low margin, high numbers’ facilities of the East.
But the two ingredients suppliers’ new offspring is somewhat different to previous partnerships, such as the one between Kemwell and Boehringer back in 2009.
Like others before it, the Boehringer-Kemwell venture saw Indian company Kemwell’s star rise in the biologics industry, whilst Boehringer benefitted from Kemwell’s speed and ability to produce large quantities of product quickly.
However in the Granules-OmniChem mix the brains reside within the Indian company, and the brawns in the European.
In a joint statement, a spokesperson said: “The new Company, Granules-OmniChem Private Limited, will provide value through a unique contract manufacturing platform that will benefit through Granules' technological capabilities which offer high quality products through efficient processes and OmniChem's extensive product portfolio and existing customers.”