J B Chem makes strategic investment of USD 5.1 mn in Biotech Lab, SA

Mumbai, Dec 14 (UNI) J B Chemicals&Pharmaceuticals has signed a definitive agreement to make a strategic investment of USD 5.1 million in Biotech Laboratories (Pty) Ltd (Biotech) of South Africa.

The transaction -valued at 1.1 times of Biotech sales of last year-will entitle J B Chemicals to own significant minority stake of the issued capital in Biotech with an option to increase its holding further in future, the company said in a notice issued to BSE today.

However, the transaction, subject to requisite approvals and conditions precedent, is expected to be completed during the first quarter of 2007.

Commenting on the highlights of Biotech, the company said it is ranked 10th (IMS, June 2005) amongst the generic Companies in the pharmaceutical private market in South Africa. Biotech owns a significant number of product dossiers, which the Company plans to leverage by undertaking the manufacturing of these products through site variation opportunities at its own facilities in India.

The Company will be able to exploit the markets of Southern African Developing Countries (SADC) through Biotech apart from its existing markets. Going forward, J B Chemicals plans to launch Doktor Mom range of products in South African markets.

Commenting on the strategic investment, Company Chairman and Managing Director J B Mody said ''The investment into Biotech is a strategic fit for JBCPL. This investment in Biotech results in considerable synergies for both companies and will allow JBCPL to tap the lucrative high growth South African and other African markets through the launch of its ethical and OTC range of products including Doktor Mom.'' Biotech is a strong BEE Company and enjoys this status for the tender. This will further strengthen the Company's position in South Africa in terms of participation in government and sector related tenders. South Africa is the largest pharmaceutical market in Africa, valued at close to USD 3 billion, with high potential for growth. Generics are becoming prevalent with the government promoting the need for generic medicines.

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