Indian and Chinese Fine Chemicals Suppliers Increase Presence on Global Scene

February 16, 2006
Patricia Van Arnum

Patricia Van Arnum was executive editor of Pharmaceutical Technology.

Informex, ORLANDO - The rising influence of custom manufacturers and fine chemicals suppliers from India and China in the global market was evident at Informex 2006, the trade show of custom and batch manufacturers, which is being this week in Orlando. An increase in the number of exhibitors from India and China, expansion plans by several large players, and partnering strategies of Western fine chemical companies, all point to the growing participation of India and China in the fine chemicals market.

Informex, ORLANDO - The rising influence of custom manufacturers and fine chemicals suppliers from India and China in the global market was evident at Informex 2006, the trade show of custom and batch manufacturers, being held this week in Orlando. An increase in the number of exhibitors from India and China, expansion plans by several large players, and partnering strategies of Western fine chemical companies, all point to the growing participation of India and China in the fine chemicals market.

China second only to US in Informex exhibitors

One measure of growing market penetration was the increase in the number of offshore suppliers. There are 76 companies from China exhibiting at Informex or 15 percent of the total 500 exhibitors, based on pre-registration data supplied by CMP Information, the trade show organizers of Informex. Chinese companies' participation at Informex was second only to the 285 US-based exhibitors at this year's edition of Informex.

CMP, which purchased Informex from the Synthetic Organic Chemical Manufacturers Association in 2005, will take the Informex trade show international for the first time in 2006, with China being the first destination for the show. The first non-US event will be held at Guangzhou, China November 6-8.

Indian players expand

Several of the large Indian fine chemical players--Jubliant Organosys, NPIL Pharma, and Hikal announced expansions plans at Informex. These announcements follow further activity among Indian players, including Shasun Chemicals & Drugs Ltd.'s (Chennai, India, www.shasun.com) pending acquisition of Rhodia's pharmaceutical custom synthesis business. 

Jubliant Organosys

Jubilant Organosys Ltd (Noida, India, www.jubl.com), one of India's largest custom manufacturers, is expanding. A new facility for finished solid dosages in Uttaranchal with a capacity of 1.8 billion tablets and 160 million capsules (on a two-shift basis) is on schedule to come on stream at the end of 2006, said  Carlos Gonzalez, vice president and general manager at Jubliant Organosys USA Inc., at Informex.

Over the last year, Jubliant Organosys has invested roughly Rs 150 crore ($34 million) on enhancing its capabilities in R&D and manufacturing of advanced intermediates and fine chemicals for the pharma and agrochemical industries. It recently set up two new multi-purpose plants at Gajraula, Uttar Pradesh, India, which that the company expects to be fully utilized during 2006. It also has expanded its kilo lab in Gajraula.

Jubliant has booked annual contracts worth more than $40 million for 2006 and another $28 million for 2007 in its custom research and manufacturing (CRAM) segment with various global life science companies. Jubliant Organosys, which posted sales of $270 million in 2005, expects 50 percent of its revenue to come from international sales over the next three years.

In addition to internal expansion, the company has made several acquisitions to build its pharma-related businesses, including the 2005 acquisition of Target Research Associates Inc. (renamed Clinsys, Inc., Berkley Heights, NJ, www.ClinsysCRO.com), a clinical research organization for $33.5 million and the 2004 acquisition of the generics company Trigen Laboratories (renamed Jubilant Pharmaceuticals, Inc. Salsibury, MD, www.trigenlabs.com) for $12.25 million. 

Jubilant Organosys, which is the second largest global producer of pyridine, was predominantly a chemicals company until it acquired Max India's active pharmaceutical ingredient (API) unit in 2002.

Hikal grows, forms agreement with Degussa

Hikal Ltd. (Mumbai, India, www.hikal.com) is building a new contract research facility in Pune in Western India to meet increasing demand for contract research services for pharma, biotech, and agrochemical companies, said Sameer Hiremath, executive director at Hikal, at Informex this week. The new 140,000-square foot facility will have 28 laboratories and will house 250 chemists and scientists. It is slated to be operational by the end of 2006, says Hiremath.

Hikal is a custom manufacturer of APIs, intermediates and crop protection products. It operates GMP manufacturing facilities in Mahad and Taloja in Maharashtra; Panoli in Gujarat; and an R&D center and API manufacturing facility in Bangalore. In November 2005, Hikal acquired a minority stake in a subsidiary in China's chemical conglomerate Sinochem Corporation (Beijing, China, www.sinochem.com). The acquisition enables Hikal to backward integrate sourcing for some of its intermediates and APIs. Hikal had already been sourcing intermediates from Sinochem for one of its products.

Hikal also has partnered with Degussa AG (Duesseldorf, Germany, www.degussa.com), the large specialty and fine chemicals company. Degussa announced at Informex that Hikal and Degussa have signed a long-term, non-exclusive cooperation agreement for specific pharma products. 

NPIL Pharma aims for top spot

Meanwhile, NPIL Pharma, the custom manufacturing arm of Nicholas Piramal India Limited (Mumbia, India, www.nicholaspiramal.com)is positioning on becoming one of the top players in pharma custom synthesis following its acquisition of Avecia Pharmaceuticals in 2005.

"We aim to be one of the top three players in pharma custom services," said Michael J. Fernandes, executive director, of the custom manufacturing group at Nicholas Piramal at Informex this week.

The top priority for NPIL Pharma for 2006, said Fernandes, is to complete its integration of Avecia's custom chemical synthesis and pharma manufacturing services business following completing the acquisition in early December. With the acquisition, NPIL Pharma gained three business units: (1) the early-phase delivery team, based in Huddersfield, UK, which is focused on custom synthesis for Phase I and Phase II clinical-phase products; (2) the pharma products division, which has operations in Huddersfield and Billingham, the UK, and which focuses on scale-up and manufacture of advanced intermediates and APIs for Phase III clinical trials and launched products; and (3) the high-potency substances division, based in Grangemouth, Scotland, which specializes in process development, scale-up and manufacture of high-potency prostaglandins and cytotoxic APIs. Also as part of the acquisition NPIL Pharma acquired the Avecia subsidiary Torcan Chemical Ltd., based in Aurora, Ontario, Canada, and which specializes in pre-clinical and early-phase clinical trial products. It also acquired a 25-percent stake in the Reaxa Ltd. (Manchester, UK, www.reaxa.com), the catalyst technology company that was spun off from Avecia.

The Avecia assets will be integrated with NPIL Pharma's assets. NPIL Pharma has four production facilities in India, including R&D labs and kilo labs at Mumbai and Chennai; a GMP site at Chennai; and a commercial-scale plant at Hyderabad.

The Avecia acquisition was NPIL's first acquisition in the custom synthesis sector. Fernandes said NPIL Pharma is now positioned with a "global footprint" in custom synthesis and is one of the few custom manufacturing organizations that is integrated from API/intermediates development and manufacturing into final dosage forms.

NPIL Pharma is part of the Nicholas Piraml India Limited, India's fourth largest pharmaceutical healthcare company with 2005 revenues of Rs 13.1 billion ($291 million)

Dishman makes acquisition

Dishman Pharmaceuticals & Chemicals Ltd. (Mumbai, India, www.dishmangroup.com) also is building its global custom manufacturing business. The company announced this week that it has acquired IO3 Ltd. (Bern, Switzerland, www.io3s.com), a company specializing in ozone chemistry. The assets base of IO3S (excluding the revaluation of assets) is currently $2 million, and the purchase price is below this price. In 2005, Dishman acquired the Manchester, UK-based contract research company Synprotec Ltd. It also has completed construction of a new 75,000-square foot R&D center, including a new CGMP pilot plant at its CGMP Bavla production site in India.

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