Granules India divest its stake in its joint venture located in China

Granules India to divest its stake in its joint venture located in China

10:54 AM, 16th October 2019
Granules India logo

NEW DELHI, INDIA: Granules India Limited announced its intention to divest its entire equity shareholding in Granules Biocause Pharmaceuticals Co Ltd by selling its stake to joint venture partner.

Granules Biocause Pharmaceuticals Co. Ltd. is an equal joint venture between Granules India Limited and Hubei Biocause Heilen Pharmaceutical Co Ltd. The manufacturing facility of the joint venture is in Jingmen, China.

Granules formed the JV in 2007 to ensure a regular supply of Ibuprofen API to support its requirements for manufacturing Pharmaceutical Formulation Intermediates and Finished Dosages.

The key reasons for exiting the JV are as follows:

1.Environmental issues have created an atmosphere of business uncertainty in China. To comply with regulatory issues on pollution, Granules Biocause Pharmaceuticals’ production facility had invested and will continue to invest substantial capex, which is contrary to Granules India’s strategy of reducing Capex outflow and Free Cash Flow generation.

2.Several existing Ibuprofen API manufacturers have expanded capacity or stated their intention to increase capacity. In addition, several companies have announced their intention to enter the Ibuprofen API market. Granules believe the additional API supply will enable it to have more supply options and having a JV is not necessary to ensure Ibuprofen API continuity.

Granules India’s decision to dilute the stake of this JV will not impact its commitment to achieving the profitability target provided for the year even without any additional JV’s contribution to the consolidated Net Profit. Further, the sale proceeds from this transaction will enable Granules India’s Cash position and will eventually reduce the Net Debt position.

© Worldofchemicals News



Your Comments (Up to 2000 characters)
Please respect our community and the integrity of its participants. WOC reserves the right to moderate and approve your comment.

Related News

Nouryon inaugurates new ethylene amines demonstration plant in Sweden

AMSTERDAM, NETHERLANDS: Nouryon has inaugurated a demonstration plant in Stenungsund, Sweden to showcase a revolutionary and more sustainable technolo ...

Read more
Ineos Styrolution introduces new styrenic solutions

FRANKFURT, GERMANY: Ineos Styrolution introduced a broad range of new styrenic solutions, giving customers a competitive advantage in their industries ...

Read more
Arkema, Agiplast partner to recycle high performance polymers

COLOMBES, FRANCE: Arkema’s Technical Polymers in partnership with Agiplast, announced a new program to recycle high performance polyamides and P ...

Read more
BASF launches new high molecular weight dispersing agent

LUDWIGSHAFEN, GERMANY: BASF has launched a new high molecular weight dispersing agent: Dispex Ultra PX 4290. These features excellent performance ...

Read more
DPDHL Group, Total strengthens partnership on energy solutions

BONN, GERMANY/ PARIS, FRANCE: Deutsche Post DHL Group (DPDHL Group) and Total SA have signed a Strategic Cooperation Agreement to strengthen their par ...

Read more
AkzoNobel launches new range of powder coatings

AMSTERDAM, NETHERLANDS: AkzoNobel Powder Coatings business has launched new global range of high-performance primers, through this complex corrosion c ...

Read more uses cookies to ensure that we give you the best experience on our website. By using this site, you agree to our Privacy Policy and our Terms of Use. X