Pfizer may merge Duchem with itself

The wholly owned subsidiary is likely to be merged with the parent company.

Pfizer India, subsidiary of the US pharma major Pfizer Inc, proposes to merge its wholly owned subsidiary, Duchem Laboratories, with itself. Pfizer India managing director Kewal Handa said the wholly owned subsidiary is likely to be merged with the parent company.

"We are yet to take a final decision. A time frame for the consolidation process has also not been fixed," he said.

Duchem Lab, a 100 per cent subsidiary of Pfizer India, is marketing a few specialty products of Pfizer in the country. The merger proposal is learnt to be part of a strategic move by the parent to streamline its operations.

An industry analyst pointed out that the reason behind the plan could be the declining performance of Duchem Laboratories.

"Duchem's performance during the last few years was not as satisfactory as it was earlier. Net sales had fallen by 124 per cent to Rs 4.51 crore in the last year as against Rs 10.11 crore in the previous year," the analyst said.

Though the arm had been making losses for the last two consecutive years, the results for the first quarter of the current financial year has showed an improvement in performance.

Company sources said the merger might happen in a year or two. Since it is 100 per cent subsidiary of the Indian company and its results are already consolidated in the balance sheet of the parent company, the merger may not have any serious implications on the business structure and accounting procedures of Pfizer.

The sources said the reduction in Duchem's turnover was consequent to the change in the product portfolio of the company.

Pfizer also declared a dividend of Rs 10 per share for the financial year ended November 2005. The company sources said the total dividend for the year was Rs 29.84 crore.