MUMBAI, May 22: Global animal health company, Merial, formed by the merger of Rhone-Poulenc's animal health business with that of Merck's, is set to finalise a joint venture with Baroda-based Alembic Chemical Works Co Ltd.

Alembic is ranked sixth in the $117-million Indian animal health market.

Merial's interest in India is significant as Rhone-Poulenc had, in 1995, sold off its animal health care division to Prima Vetcare, a closely held Mumbai-based company. The French multinational's move was aimed at focusing on its core competency, the human health business.

Industry sources said that talks were at an advanced stage, and the two partners are close to deciding whether it would be a 50:50 venture or a 51:49 alliance.

Sources indicated that while Merial is keen on a controlling stake in the venture, the Rs 292-crore Alembic would prefer an equal holding though it is not averse to the first proposal.

The proposed alliance may entail a spin-off of part of Alembic's veterinary business into the joint venture firm, though finer details could not be ascertained.

Alembic has already replaced the Damania group for marketing and distribution of Rhone-Poulenc's animal vaccines. The Indian partner is expected to kick off marketing operations by next month.

Rhone Poulenc's animal health company, Rhone Merieux, is a leading player in the global canine vaccines and foot and mouth vaccine (used in livestock) market while Alembic's veterinary product portfolio includes antibiotic injections, antihistamines and feed supplements for livestock and poultry.

Merial's interest in Alembic comes at a time when the Indian company has laid down plans to launch a new herbal veterinary division to boost its presence in the animal health business. The new unit, which is to be officially set up on June 4, would have an exclusive marketing network and is expected to generate sales worth Rs 10 crore within the first four years of operation.

Alembic's veterinary unit already has a marketing tie up with Ciba Geigy (Bangladesh) besides a distribution deal with a Korean firm for a genetically engineered product. However, no conflict of interest is envisaged if the proposed alliance with Merial goes through.

Alembic's veterinary division notched up sales of Rs 19.36 crore for the year ended December 31, 1996, compared with Rs 13.66 crore in the previous nine months ended December 31, 1995.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.