The Mumbai-based Hikal Ltd. has entered into a Joint venture agreement by acquiring a minority stake in one of Sinochem Corporation's subsidiary company. Sinochem Corporation of China is a "Fortune 500" company.
Jai Hiremath, Vice Chairman and Managing Director, Hikal said: "This joint venture will help Hikal improve its cost base, as we see many sourcing opportunities of raw materials and intermediates for our APIs. The association with Sinochem will open up new avenues for marketing and sourcing of products in different markets."
According to a company release, the acquisition will enable Hikal to backward integrate for sourcing some of its intermediates and APIs. Currently, it is already sourcing intermediate from Sinochem for one of its products. Earlier, in 2004, Hikal acquired a majority stake in Marsing & Co., Denmark.
The company completed allotment of cumulative redeemable preference shares of Rs.47 crores at a conversion price of Rs.665/- per equity share.
Sinochem, one of the largest trading companies in the world, engaged in the trade of petroleum, fertilizer, rubber, plastics and chemicals. It also has broad based activities starting from Research & Development to manufacture of chemicals.