The Aarti Drugs Limited, leading manufacturer of bulk drugs in the anti-diarrheal and anti-inflammatory therapeutic groups in India, has initiated talks with four medium-sized pharma companies in China for a joint venture in manufacturing active pharma intermediates (API).

Satish Nachane, managing director, Aarti Drugs, has confirmed that the company was closely following up with these units and was busy with assessing their balance sheets so that the tie-up proposal could be initiated further.

"To begin with, we would identify the products with good potential and that would not face stiff competition. Traditional and leading API's like Metronidazole from the anti-diarrheal class and Diclofenac from the anti-inflammatory class would be given prime importance in the venture," said Nachane.

The company has earmarked a budget of 10 million dollars for the purpose and would be soon going overseas to finalise the deal, he added.

Citing reasons for entering the Chinese market, Nachane said the main purpose was to explore the huge potential that existed in one of the largest markets in the world. "We would be exploring all fronts and would try and gather as much information on the market and the government policies that exist for outside drug companies. Further with China's stringent government and bank policies, we expect to raise our margins from the proposed deal," he added.

According to Nachane, the Chinese Government is being constantly pressurised by the US, European Union (EU and Japanese Governments to uplift their currency value in the international market, which has been steady for almost 10 years. "From the year 1994, the Chinese currency stands at 8.21 Yuan / dollar despite the fact that China has one of the finest infrastructure and cheap labour. Once the amount is revaluated to 7.5 or 7, it would put China ahead on the international scene, which in turn would reap more benefits for Indian markets as the rupee value would depreciate," opines Nachane.

Still, the language barrier is a hindrance for setting up base in China, which has really caused concern about the prospects of the company's projects in that country. According to Nachane, since all transactions in China are carried out in Mandarin, the local language of China, their personnel would be trained to get acquainted with the language.