Speaking to The Financial Express, CHPL president B Ramanna said the two companies had initiated negotiations on the issue and expressed optimism that the plant would become fully operational by mid 2001 "if all goes well with the talks." In keeping with Cadila Pharmaceuticals' philosophy of retaining majority control in any joint venture, the CHPL proposal has offered Wembley a 49 per cent stake in the project which "could be at the current location (in Kadi near Ahmedabad) or a joint venture at a new location. We are open to the location of the plant."

Further, considering that there are several glove manufacturing plants in the country which have closed down due to various financial and other reasons, CHPL has invited Wembley to jointly examine these facilities too "for a possible takeover/turnaround as we foresee a major growth for non-medical application of the gloves."

CHPL is currently manufacturing examination and surgical gloves at its Kadi facility which has a capacity for manufacturing 14.4 million pairs per annum. Thus far, CHPL's glove manufacturing facility had been catering exclusively to the export market since it has been a 100 per cent export oriented unit. However, in view of the burgeoning demand in the domestic market itself, CHPL has got itself denotified just a couple of weeks back in an endeavour to expand its sales within the country itself.

According to statistics compiled by CHPL, the current local market potential and market size is an estimated 200 million pairs per annum for surgical gloves and 40 million pairs per annum for examination gloves.

CHPL is the second largest glove manufacturer with the Kerala-based Kanan Latex being the market leader with 25 million pairs. Other large players in the domestic glove market are the public-sector Hindustan Latex, Dial Rubber, New Life and Real Latex - all of which are located in Gujarat. A major chunk of the glove manufacture in the country, however, falls in the unorganised sector which accounts for almost 15 million pairs. According to Ramanna, the proposed tie-up with Wembley is likely to lead to a major shake out in the glove manufacturing industry. "We are planning to set up a joint manufacturing facility with Wembley with an initial capacity of 50 million pairs per annum," Mr Ramanna revealed. At present, Wembley has three manufacturing facilities in the far east, one in the US and another one in Europe. "Considering the surge in demand for all kinds of gloves ranging from the conventional surgical and examination gloves to industrial gloves, toxic material handling gloves, chemical gloves andgardening and cooking gloves, we are sure the joint venture will be a success," enthused Mr Ramanna.

It may be mentioned that CHPL has embarked on an expansion cum consolidation phase and has become a profitable undertaking of the Cadila group over the past one year posting a 125 per cent year on year net profit growth for the quarter ended June 30, 2000 offsetting its losses for the corresponding period in the previous year. The company's acutest pregnancy test kit has been a runaway success within five months of its launch. CHPL is also in the process of launching rapid test kits for hepatitis B and malaria in the coming months.