Following Merck KGaA’s global acquisition of Millipore in early 2010, the new division, Merck Millipore, began its operations in India on Monday. Marek Dziki, MD at Merck, the listed Indian arm of Merck KgaA tells FE’s MG Arun about the way forward for the new division.
How will Merck Millipore division contribute to Merck’s growth in India?
Based in Bangalore, Millipore has a staff strength of 300 and a turnover of roughly $25 to $30 million. We have opened an application laboratory in Navi Mumbai, while Millipore also has an application lab in Bangalore, which focuses more on bio pharma. Millipore will now contribute around 25% to Merck’s revenues in India.
Today, within chemicals in India, Merck has two divisions – performance materials, and Merck Millipore. Together, we have 35,000 products. From a company producing high quality products, we are moving to one that, in partnership with customers, will develop tailor-made solutions. The investment that has gone into the Navi Mumbai facility is two million euros, but it will create a lot of intangibles in terms of customer relationships. We are looking to address the Indian market now, but would be open to work with companies to develop unique products elsewhere also.
What is your outlook on the Indian pharma industry? Would you look to grow inorganically here?
We want to grow on the basis of the industry growth here. The Merck group worldwide is committed to both chemical and pharma. The Indian pharma market is growing at a rate of 14-15%. In the next five years, the market will grow between 11% to 13%. This will be on the back of growing population and growing disease diagnostics as incomes rise.
Some MNCs have grown in the market through acquisitions. We would want to grow in the market too. In pharma, we introduce 10 to 15 new products every year. We have prescription driven as well as OTC products. The growth in speciality chemicals in 2010 was around 10%. In 2006, we acquired Serono, Europe’s largest biotech firm. That added to our strength in pharma. In three years, we acquired Millipore. Now, we need a few more years to integrate and grow organically.
India is a major sourcing centre for MNCs, and they have alliances with Indian companies. What will be your strategy here?
Yes, we will follow a similar strategy. In Asia, India, China, and Indonesia are important for us. We already do a lot of export in chemicals to other countries in Asia, and South Africa. In pharma, our exports are much less. We have capacity in India to meet the current requirements, but if China starts buying, we will need more capacity. But you always don’t need to do it on your own. You can go in for contract manufacturing.
Merck globally is getting out of diabetes. What will the impact be on your diabetes portfolio in India?
The impact is not too much. We develop a lot of brands, and in 2010, we introduced four to five new products in diabetes in India.