Samjong in talks with Indian pharma majors for JVs

Samjong KPMG, the Korean arm of the KPMG Asia Pacific, is in talks with Indian pharmaceutical companies, including Nicholas Piramal, Wockhardt and Elder Pharma, to explore opportunities for potential joint venture projects for its Korean pharmaceutical and biotechnology clients.

The KPMG team, currently in India, is scouting for strategic partners for leading Korean companies like New Life Inc, Dong A Pharma, Choong-Wae Pharma, Han-Mi Pharm, Han-Dok Pharma, Yu-Han Corp and II-Dong Pharma. The pharmaceutical and bitechnology companies in Korea are keen to float joint ventures in the areas of marketing, production and R&D.

Pratap Nambiar, regional executive partner, Global Markets, KPMG Asia Pacific, who is heading the Korea investment specific KPMG team in India, told Business Standard that the current project involves identifying Indian companies with better synergies, scope of collaborations and investments for the Korean clients.

The Korean companies are looking for 50:50 joint ventures with Indian companies. "In the pharma and biotech space, the Korean companies are currently looking for Indian JVs for generic drug production and marketing, research, clinical trials and manufacturing of biotech products," he said.

Referring to the key factors that have prompted Korean pharma and biotech companies to collaborate with Indian firms, Young-Gak (ken) Yun, Group CEO, Samjong KPMG, said that Korea's aging population drove steady growth of the production and imports in the pharmaceutical industry.

At the same time, keeping in mind the weak financial condition of the National Health Insurance Corporation (NHIC), a price reduction policy has been imposed in the country. The other two key reasons are high cost of manufacturing and labour and growth of generic drug market.

The Indian companies, on their part, can take the advantage of new market opportunity for raw materials by substituting China and also the market for low price generic products. For Indian biotech companies, the wide range of biotechnologies in Korea is another important opportunity.

Along with pharma and biotech, the KPMG team is also exploring possibilities for collaborations with companies in sectors like automobiles, steel and financial services. As part of this, the team will meeting Tatas, Birlas, Mahindra & Mahindra Anand Group and Murugappa Group.

"The Korean success stories in India have evoked a lot of interest among other countries as well. In Korea, there is a belief now that many of the middle market companies can begin to ride on the success of the large companies like Samsung, LG and Hyundai. We will soon see a much greater influx of investments into India from Korea," Nambiar added.