The Zydus Cadila group had earlier spun off its animal healthcare division into a subsidiary company, Zydus Aqrovet Ltd. ASE, on the other hand, has a major presence in the tonic and feed supplement segment and is a leading player in the anti-infectives market. ASE already has a 50:50 joint venture with Nicholas Piramal for marketing certain human-healthcare products.

A press release said that both partners will pool their animal-health businesses to create the country's largest animal healthcare company. The joint venture, Sarabhai Zydus Animal Health Ltd, will be operational by April 2000 and is projecting a turnover of Rs 85 crore in the first year of operation (backed by a combined market share of 10 per cent). The new entity will have a combined field strength of over 200 personnel, while both partners will have an equal representation on the Sarabhai Zydus Animal Health board. ASE already has a sales network coverage of 70,000 veterinarians and 40,000 retailers.

Cadila Healthcare managing director Pankaj R Patel said, "At Zydus Cadila we have been exploring strategic approaches for growth in all areas of our business operations and have launched several new initiatives in formulations and bulk drugs. This partnership in animal health is an eventful start to the 21st century".

ASE chairman Kartikeya V Sarabhai said, "The JV marks a new beginning in the Indian veterinary market. The new venture will Insight and continuation on benefit from the strengths of both the companies creating ideal grounds for market leadership".

Meanwhile, Zydus Aqrovet has already launched Rabdomun (the only anti-rabies vaccine in the world with an antigenic content of 5iu -providing immunity for three years) in alliance with Schering Plough Plc. Other key products include Butalex (for the treatment of the theilariasis), a de-wormer Zycloz.

Insight
focus will be on formulations

Setting up of a joint venture in the animal healthcare business after hiving off the division as a subsidiary, is in line with Cadila's long-term plan. The company intends to hive off smaller business units as subsidiaries and is also planning to hive off the diagnostic business. Such a hive-off will not only make the company more focussed in formulations, but also give the stock the higher discounting enjoyed by formulators in the market.

Shishir Asthana