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Anju Ghangurde
Mumbai, Nov 12: Hoechst Marion Roussel (India) may review its current profit-sharing arrangement with UB group company, Carews, for its popular analgesic and antipyretic brand, Combiflam. The entire exercise, which could vest all future rights on Combiflam with Hoechst Marion, is expected to see the German multinational make a one-time payment of around Rs 20 crore to the UB group.
The Rs 42-crore Combiflam brand is a combination of ibuprofen and paracetamol and has been jointly developed by Hoechst Marion and the Calcutta-based Carews.
"The original profit sharing arrangement between Hoechst Marion and Carews could be reviewed and this may entail a payment to Carews. Combiflam is at present manufactured by Carews and marketed by Roussel India which is in the process of being merged with Hoechst Marion Roussel," industry sources said. However, no official confirmation on the proposed new arrangement was available.
Sources, however, ruled out any sale of the Combiflam brand to Hoechst Marion, in thestrict sense of the term, given that the UB group itself holds approximately 20 per cent of Hoechst's equity capital. The UB group and Hoechst Marion Roussel also share a common chairman in Vijay Mallya.
Sources also say that any new arrangement would be beneficial to HMR with an eye on the long-term potential of the brand, though it is unclear whether Carews will continue to manufacture the brand for HMR.
Analysts, however, expressed concern over the proposed payment to Carews, given that HMR has had a difficult first half in the current fiscal.
The German multinational is expected to find it tough to maintain high levels of growth in the current fiscal given its Rs 75-crore exposure to the troubled Russian market. HMR is expected to see a 15 per cent decline in its Russian business even as industry sources project an overall decline of 10 per cent in the company's export turnover for the current fiscal.
Meanwhile, Roussel has reportedly put on the block its Thane facility in Maharashtra. Thelabour-free unit comprises a formations and bulk drugs manufacturing area along with a administrative block.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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