Nicholas Piramal, Reckitt Benckiser dissolve JV

By Our Special Correspondent

MUMBAI, JULY 4. Nicholas Piramal India and Reckitt Benckiser India have dissolved their joint venture company, Reckitt Piramal. However, a strategic alliance will remain between the two companies.

In a joint statement, Mr. Ajay G. Piramal, Chairman, Nicholas Piramal India (NPIL), and Mr. Pranab Barua, Managing Director, Reckitt Benckiser India (RBIL), said the joint venture company would be `restructured' into a strategic alliance.

According to Mr. Piramal, ``The objectives set out at the time of forming the JV could very well be achieved without the separate JV device more cost effectively by eliminating the incremental costs associated with the JV.''

Mr. Madhukar Kurtkoti, Managing Director, Reckitt Piramal, said high costs of the venture were the main reason for the dissolution of the JV. ``The pressure was mounting in terms of high costs. This year, it accounts for Rs. 3 crores which was likely to increase substantially in the coming years,'' he added.

NPIL will continue to give doctor detailing support to Reckitt Benckiser brands such as Dettol Liquid and Disprin and distribute through the pharma channel some of Reckitt Benckiser brands on a need basis. Two major brands of Reckitt Benckiser plc. - Gaviscon and Fybogel - will continue to be marketed by NPIL. The brands now sold through the JV will henceforth be sold directly by the respective companies who owned or contributed these brands to the JV. NPIL will also assist Reckitt Benckiser with new product launches on a project basis and the latter will continue to tap the formulations development capability of NPIL.

The JV was formed in October 1997 between RBIL and NPIL for marketing over-the-counter (OTC) pharmaceuticals. Dettol, Polycrol, Saridon, Lactocalamine, Aspro, Burnol and Disprin were some of the key brands sold through the JV.

The brand, Burnol, which was purchased directly by the JV, will be handled for the time being by RBIL.

Reckitt Piramal's sales during 2000-01 were Rs. 308.82 crores while the profit after tax was Rs. 13 lakhs. Mr. Barua said Reckitt Benckiser plc. is now in the final stages of signing an agreement with NPIL for conducting clinical trials for Omeprazole and Gaviscon through NPIL's Clinical Research Organisation (CRO), `Wellquest'.

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