Piramal Finds New Avenues of Growth Through JV With Navin Flourine

Piramal Finds New Avenues of Growth Through JV With Navin Flourine
Piramal has just formed a JV with Navin Flourine for developing and producing as well as selling speciality fluorochemicals that find applications in the field of healthcare. The JV is 51:49 with the majority stake owned by Piramal. The JV will also invest a lot of cash in India's healthcare sector. During the first phase of development, the JV will invest close to INR 1,200 million in the healthcare sector.

Fluorochemicals is a sector that is rapidly expanding in India. Deal Curry has reported how the international fluorochemicals industry which was worth around $15.3 billion in the year 2011 is now going to generate revenue of around $21.5 billion by the year 2018. This amounts to a CAGR of around 5% expected from the year 2012 to 2018.

Navin Fluorine is coming up with new initiatives in this field. It is owned by the Arvind Mafatlal Group and it has specifically developed in-house expertise in speciality fluorine. Navin Fluorine has been following an acquisitions route for growth for some time now. UK based Manchester Organics was acquired by Navine Fluorine in the year 2011. Moreover, the company has a turnover of around 100 million USD currently. It is a company based in Mumbai.

Piramal Enterprises is currently led by Ajay Piramal. The corporate group has expertise in pharma as well as healthcare information management apart from financial services. Piramal has not been left behind in its quest for growth either. Though in the year 2010, Piramal sold rather than bought its way to prosperity. The corporate group sold its Indian drug formulations business to well known US drug maker Abbott Laboratories.

After having exited from the drug discovery research field, the company now seeks to continue generic and contract research business. Piramal had demerged its business from Piramal Phytocare Limited formerly Piramal Life Sciences Limited under PEL. The group has revenues of around INR 20.9 billion for the last fiscal.

Navin Fluorine and Piramal Enterprises have now sought to form the JV with the intent of developing fluorochemicals solely for the healthcare industry. Following the JV agreement, Navin Fluorine International rose by 5% while Piramal Enterprises gained another 4%.

Joint ventures are an effective way to create synergy and dynamism. Moneywise, it makes sense too. Pooling in resources to expand significantly in the field of fluorochemicals has been a good move, considering the growing relevance of this area in the healthcare industry.

With pharmaceuticals companies set to make a lot of profit as diseases are on the rise, it makes sense to invest in a JV that can cure many ills. As far as functioning and operation are concerned, the JV can work wonders for the two groups as they join hands to work towards products that can save lives and improve the quality of living.