In a facsimile response to The Financial Express, Rallis India managing director Vijay Rai confirmed that "Rallis is entering into an arrangement with a company, which is going to buy the Tumkur facility of the UB group." He, however, said that Rallis would not be part of the financial consideration involved in the sale.

The deal, which is expected to involve a consideration of around Rs 8-12 crore, will be finalised shortly. Tumkur Chemicals is a privately-owned firm. The UB group's unit at Tumkur essentially manufactures a range of fine chemicals and agrochemicals, and is part ofgroup company UB Pharmaceuticals. Indications are that the UB group may even consider putting UB Pharma, in toto, on the block, though no official confirmation on this was available. The entire exercise is apparently in line with Andersen's suggestions that the group focus on its core competency, its liquor and beer businesses. The UB group had reportedly identified non-core assets worth almost Rs 800 crore last year and was keen to rid itself of its entire debt burden partly through the sale of such assets.

Elaborating on the nature of the alliance at Tumkur, Rai said: "The strategic arrangement with the new company will be the process development of several new products, which have been identified by the Rallis Research Centre, for commercialisation." Rallis' state-of-the art research centre in Bangalore conducts a range of studies in bio-efficacy, residue analysis, analytical chemistry, ecotoxicology and regulatory toxicology studies. While two new products developed at the centre have already hit theinternational market, the R&D unit has recently decided to undertake development of fine chemicals and botanical medicines.

The seven-year-old UB Pharma, which had been through a rough patch in the recent past, registered a loss of Rs 13.25 crore for the year ended March 31, 1996. The company's Tumkur unit, which was set up in the early nineties, had also been supplying certain chemicals to the local subsidiary of German multinational Hoechst Marion Roussel. UB Pharma had, some years ago, chalked out plans to enter the natural products market, though this did not generate business in line with the company's expectations.