Kemwell Pvt Ltd, a leading contract manufacturing unit in Karnataka has now acquired Pfizer's manufacturing unit in Uppsala, Sweden. In February 2006, the company had signed agreements with Pfizer for the acquisition process.
After obtaining the necessary regulatory and other approvals, this acquisition was closed on August 28, 2006 and the unit was handed over to Kemwell's management. Kemwell is the first Indian pharmaceutical company to acquire business in Sweden, informed Subhash Bagaria, chairman and managing director, Kemwell.
Kemwell, which serves requirements of multinational and large Indian pharma companies, will now use its manpower and resources to successfully integrate the Swedish unit with its existing Indian operations. While it will maintain the current organizational structure in Sweden, Perake Oldentoft, board member of Kemwell and resident in Sweden, will operate as the managing director of Kemwell AB. His primary role will be to ensure the continuity of operations at the Swedish facility.
Besides growing inorganically, Kemwell has also completed constructing its state-of-the-art tablet facility in Bangalore, which has capacity up to five billion tablets for exports to the US and Europe. Kemwell will begin validation activities for this facility as well as a recruitment drive to hire the necessary skill set for running a plant of global standards.
"Through the Swedish acquisition and the new facility in India, we can not only ensure rapid growth with a major capacity addition but also apply best practices from both parts of the world," stated Bagaria.
The production unit in Uppsala manufactures both API and finished formulations. The facility is approved by US FDA, EMEA, and Japan's regulatory authority and will supply to 80 markets, including USA, Europe and Japan. The Swedish facility mainly produces salazopyrine, dubbed in medical circles as the "first designer drug" used to treat arthritis and IBS (irritable bowel syndrome). The new entity, to be called Kemwell AB, will continue to manufacture this drug for Pfizer while scouting for new global contract manufacturing opportunities. Kemwell is retaining all 170 employees on the site thus ensuring the continuity of operations and management. The funds for this acquisition were arranged through Kemwell's internal accruals and loans from a Swedish bank.
The Uppsala facility will add Rs 200 crore to Kemwell's annual turnover. It will also provide access to technology and quality standards on a continuing basis. The addition of USFDA-approved manufacturing capabilities to its operations will allow it to transfer some of the learning and experience from Europe to India and help it to expand its contract manufacturing business. Kemwell will now be capable of providing the market with additional capacity quickly. This acquisition provides Kemwell with a global site to serve its customer base, in addition to its four sites in Bangalore, thus significantly reducing customers' sourcing risks.
The two-decade-old Kemwell formulates liquid orals, tablets, ointments, creams, and external drops from its four manufacturing plants in Bangalore. Its customer profile encompasses six of the top 10 pharmaceutical companies in the world and it manufactures five of the top 10 pharmaceutical brands in India. As a dedicated contract manufacturer, Kemwell has no branded products of its own in the market, thereby avoiding any conflict of interests with its customers. As a value add to its capabilities, it is also venturing into services such as formulation development and analytical method development and validation.