Ranbaxy Laboratories will set up a majority-owned joint venture in Mexico to tap the growing demand for generic drugs there.
The joint venture with a Mexican firm will cater to the marketing and distribution demands of the local market.
The proposal was cleared by the Ranbaxy board recently. The move is part of the company's Garuda vision to become a $5 billion company by 2012.
About a year back, the company had picked up a controlling stake in France-based RPG (Aventis), besides setting up a subsidiary in Spain.
Industry analysts estimate the value of the Mexican pharmaceuticals market at $7 billion, with an annual growth rate of 10 per cent.
In 2001-02, Mexico accounted for Rs 149.6 crore (Rs 1.5 billion) of the total sales of Indian companies, according to a study by the Indian Pharmaceutical Alliance.
This grew by 66 per cent to Rs 248.3 crore (Rs 2.48 billion) in 2002-03. Mexico accounted for 2 per cent of the total global sales during the same period.
Ranbaxy was one of the few global generic companies to benefit from the quick opening of the Brazil market, which contributed $30 million to revenues in the second full year, post entry.
According to industry analysts, a similar upside in markets like Mexico, France, Argentina and Canada cannot be ruled out.
Ranbaxy has already lined up its manufacturing facility in Brazil to cater to the local generics demand.
Ranbaxy markets its products in 70 countries and has manufacturing facilities in seven locations across the globe. Companies like Ranbaxy have been seeking new revenue streams to beat a new law that recognised product patents and ended decades-old copycat trade.
Larger companies are looking overseas as drugs worth billions of dollars go off patent, or aim to become suppliers of drug ingredients for pharmaceutical majors, besides doing contract research such as complex chemical synthesis.
Other Indian pharmaceutical companies are also eyeing the Mexican market, with Wockhardt already announcing a majority owned joint venture in Mexico.
Wockhardt has signed a joint venture agreement for a 51 per cent stake in Wockhardt Mexico S.A. de C.V., with the remaining 49 percent held by Representaciones E Investigaciones Medicas, S.A. de C.V.
The joint venture will initially market insulins made by Wockhardt. Later, it will market other diabetology products and biopharmaceutical products.
The Mexican pill
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Analysts estimated the Mexican pharmaceuticals market at $7 billion, with an annual growth rate of 10 per cent
- In 2001-02, Mexico accounted for Rs 149.6 crore of total sales of Indian firms, which grew by 66 per cent to Rs 248.3 crore in 2002-03
