Ranbaxy exits Chinese JV

Written by fe Bureau | Mumbai | Updated: Dec 30 2009, 05:30am hrs
Ranbaxy Laboratories has sold its entire stake in Chinese joint venture, Ranbaxy Ghuangzhou China (RGCL), to HNG Chembio Pharmacy Co Ltd for an undisclosed amount. The joint venture between the Ranbaxy group; Guangzhou Baiyunshan Pharmaceutical Company Ltd, China, and Hong Kong New ChemicRanbaxy was formed in 1993. Shares of Ranbaxy closed at Rs 520.55, up by 0.10%, on the Bombay Stock Exchange on Tuesday.

Ranbaxy had only a single manufacturing unit in China through RGCL. Now it will supply drugs to the market from other global production sites. China continues to be an important market for Ranbaxy and the company believes that this new approach will create greater value, Ranbaxy said in a statement. This transaction is part of the companys endeavour to develop a new business model for China which entails the marketing of value-added pharmaceutical formulations and consolidation of manufacturing operations for cost synergies, the statement added.

Ranbaxy had entered into the joint venture in 1993 and started production in 1995. The JV used to cater to the local market only.

Last year, RGCL contributed around $20 million to the overall revenue of the company while registering a growth of 17%.

HNG Chembio Pharmacy Co, a state-owned pharmaceutical company based in Hunan province of China, is engaged in marketing and distribution of finished dosages and active pharmaceutical ingredients.