Under the alliance, Bayer India will transfer its existing pharmaceutical brands and marketing operations to the new joint venture company while Zydus will bring in select synergistic brands. The two partners are expected to render toll-manufacturing services to the joint venture.

Zydus group managing director Pankaj R Patel told The Financial Express that the new entity would market these brands under a licensing arrangement, even as the Indian partner will continue its existing businesses under group companies Cadila Healthcare, Alidac and Indon Healthcare.

The new venture's 20 brand portfolio willinclude Bayer brands like Ciprobay, Glucobay and Adalat though trademarks will be retained by the respective partners. Besides, it will also co-market Zydus' new products under different brand names and export its products to the German multinational and its subsidiaries.

Bayer India executive vice president (healthcare) Raghu Kumar said the combine would have around 3,200 stockists (2,400 from Cadila Healthcare and over 900 from Bayer) and 220-and-odd medical representatives, which would help achieve synergies of better market coverage (of almost 95 per cent) and penetration.

Bayer India managing director Alan P McGilvray said that the German multinational had appointed Coopers & Lybrand to undertake the valuation for the transfer of the marketing and distribution network to the joint venture. However, any such payment was "totally voluntary" as there was no legal reason to pay for intangibles, he added. Such payment, if any, will be made by Bayer AG to Bayer India.

The cumulative investment forsetting up the new venture will be approximately Rs 20 crore while the initial equity capital is Rs 16.2 crore. The German multinational's investment in the venture will be made through Bayer Industries, a 100 per cent subsidiary of Bayer AG.

The joint venture will also consider possibilities of collaboration on the research and development front though details on this are yet to be finalised. "It could be contractual or collaborative but essentially must be cost-effective," Patel said. Bayer head of pharmaceuticals in Asia, Latin America, Middle East, Africa and Eastern Europe Clemens Kaiser said, "This partnership shares commonality of strategic direction and we are not excluding any possibility." Bayer AG will support this alliance with new products from its strong R&D pipeline and "as of now" no royalty is payable.

The two partners will have equal representation on the board of the joint venture. While Patel will take charge as executive chairman of the new company, Raghu Kumar will be its managingdirector.The joint venture outfit is expected to be operational by January, 1999, once all the mandatory clearances are in place.

Feasibility study on

MUMBAI, July 2: The Bayer group is conducting a feasibility study on expanding its Indian polymer business to include synthetic rubber. Bayer India managing director Alan P McGilvray said the multinational has held talks with petrochemical giant Reliance and Haldia Petrochemicals for its synthetic rubber project, since it is esentially based on key feedstock, buta-diene."We are looking at a production site for the south-east Asian region in keeping with our strategy to produce where the market lies. A feasibility study is on," he said. Synthetic rubber finds application in a range of industries including tyres and conveyor belts.