Return
to Story Page
To print: Select File and then Print from your
browser's menu
Tuesday saw three major mergers being announced, two in the oil and petroleum sector and one in life sciences. While the companies in the oil sector have been merging mainly on account of low international crude prices, to pool in their resources, life-science firms are consolidating to take advantage of the post-2005 scenario in developing countries, which will increase the need for resources. The top three companies in both these sectors have been a result of recent mergers.
Domestic companies, on the other hand, specially in the pharmaceutical sector, are busy visiting government officials to alter the patent bill. Their argument no doubt deserves merit, but that should not prevent them from preparing themselves for the worst. Apart from a handful of companies, most Indian players are preparing to be generic market players and thriving on high-volume low-margin products which go off patent.
Multinationals, however, are not readily letting other players enter into products that have gone off patent ashas been the case with Glaxo for its ranitidine molecule. In such a scenario, Indian companies are forced to approach the courts, and the battle could be a long and bloody one.
Indian companies are busy consolidating their positions in the generic or the over-the-counter market. Some domestic companies are entering into joint ventures with MNCs for a fixed period of time, and continuation of such joint ventures after 2005 is anybody's guess. If companies like Dr Reddy's, Lupin Laboratories and JB Chemicals can carry on product research, there is no reason why other Indian companies cannot do the same. Indian companies will not only need their financial muscles, but also the technological skills to counter the threat from multinationals. Mergers are the fastest and cheapest ways to achieve this.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
------------------------------------------------------------
This story was printed from Net Express located at http://www.expressindia.com. Net Express provides a portal to India, with news from The Indian Express and The Financial Express along with sites on travel and tourism, the entertainment industry, the power sector, the environment and much more.
------------------------------------------------------------