German firm plans to invest €30 mn in Indian Co

New Delhi: German pharmaceutical major Fresenius Kabi, which had recently acquired Dabur Pharma, is planning to invest up to €30 million in the next 2-3 years in the Indian company.

The investments will go primarily into doubling production capacity of Dabur Pharma’s active pharmaceutical ingredients (API) manufacturing facility in Kolkata.

Fresenius Kabi is also expanding Dabur Pharma’s global reach to regulated markets such as Europe and North America. The company is working towards getting clearance from the US Food and Drug Administration for the Indian firm’s formulation facility in Baddi, Himachal Pradesh.

“We will invest up to €30 million in doubling the capacity of API manufacturing facility of Dabur Pharma, located in Kolkata, and also in getting regulatory approvals for newly built formulation plant in Baddi,” Mr Rainer Baule, President and CEO, Fresenius Kabi, said.

The German company said it plans to sell one per cent stake in Dabur Pharma Ltd to a strategic investor to comply with Indian listing rules.

Fresenius Kabi had bought a 17.6 per cent stake in Dabur Pharma through an open offer at Rs 76.50 a share. This is in addition to the 73.3 per cent stake it bought in the Indian company from the Burman family at the same price in April.

Following the open offer Fresenius Kabi owns a 90.9 per cent stake in Dabur Pharma and will need to bring down its holding to 89.9 per cent to comply with Indian laws that require a listed entity to keep 10 per cent of equity for the public.

Mr Baule said that Fresenius will also invest in Dabur Pharma’s research and development operations.

“India is an extremely important market. It’s one of the fastest growing pharma markets in the world.
India is getting richer and richer, so healthcare expenses are growing here,” Mr Baule said. He said that while the company is open to acquiring more companies in India though the current focus was on strengthening Dabur Pharma.

Dabur Pharma has appointed Mr Satish Kulkarni as its new CEO. The firm has also appointed Mr Rakesh Bhargava, Mr Satish Kulkarni, Mr Gerrit Steen, Michael Schoenhofen, Mr John Ducker, Mr D.G. Shah and Mr Nitin Poddar as additional directors to its board.

It has also appointed Mr Rakesh Bhargava as the non-executive chairman of the board and Mr Anand C. Burman as an additional director of the company.