JB Chemicals looks to brand acquisitions for growth

Our Corporate Bureau

Mumbai, Aug 8: JB Chemicals and Pharmaceuticals is exploring inorganic growth options by acquiring brands in the cardiovasculor and the NSAIDs segments. It is also seeking strategic alliances and tie-ups with foreign companies for manufacturing and marketing of products, JB Chemicals, chairman and managing director JB Mody said at the company’s annual general meeting held here on Wednesday.

However, the company has not appointed any merchant banker to scout for brands and neither has it earmarked any specific amount for the purpose, company officials said. The company is cash-rich and has robust reserves to bank on.

The inorganic growth plan forms part of the company’s strategy to achieve a turnover of over Rs 500 crore by 2005. For the current fiscal, it expects the growth rate to be around 25 per cent, Mr Mody said.

Meanwhile, the promoter’s stake in JB Chemicals has gone up to 59.52 per cent from 51.31 per cent held last year following the merger of Unique Pharmaceutical Laboratories (UPLL) and the pharmaceutical division of Ifiunik Pharmaceuticals (IPL) with it, coupled with a creeping acquisition of around 1 per cent.

Mr Mody said the state-of-the-art, 100 per cent export oriented unit at Panoli to manufacture gel, ointments and large volume parenterals is expected to go on stream by December this year. The profit derived from the project, implemented at a cost of Rs 25 crore will be totally tax free in the hands of the company till 2010. This facility, now approved by the Drugs Authority of South Africa, assumes even greater importance in view of the Central government’s policy to phase out export incentives offered under section 80 HHC of the Income-Tax Act 1961 by March 2004.