September 1, 2011

Fonterra acquires Indian pharmaceutical firm

Fonterra has purchased an Indian pharmaceutical firm as part of a joint endeavour with a Dutch dairy firm, expanding its dominance in the lactose excipients market.

Fonterra announced Wednesday (Aug 31) that its 50-50 joint venture with Royal FrieslandCampina, DMV-Fonterra Excipients (DFE), had agreed to acquire ingredient manufacturer Brahmar Cellulose Private Limited (BCPL), based in Cuddalore, India.

BCPL manufactures ingredients used by the pharmaceutical industry to make tablets and pills.

DFE was already the world's leading supplier of lactose excipients - substances used to bind or carry the active ingredients in tablets, capsules and powders for medical inhalers - accounting for around half of the global sales and for 5-10% of oral tablet excipients, according to Fonterra.

The acquisition would join two companies that developed, produced and marketed excipients and would help reduce supply chain and formulation costs, said the statement.

DFE chief executive Jan Jongsma said it would create a unique market position for DFE as a manufacturer and supplier of all the most commonly used ingredients in the pharmaceutical industry.

"Long-term synergies will be achieved by combining DFE's current global market position and sales network with Brahmar Cellulose extensive product knowledge and market position in India," said Jongsma. "The acquisition of Brahmar Cellulose is a further step in achieving our ambition to become a leading supplier in pharmaceutical excipients and will give a stronger base for future developments in this area."

The acquisition would be completed in the fourth quarter this year subject to conditions, including the obtaining of regulatory consents.

New Zealand-based Fonterra, a farmer-owned cooperative, is the largest processor of milk in the world, producing more than two million tonnes of dairy products every year and employing 16,000 staff.