KEL will set up its subsidiary in Europe

Karnavati Engineering Ltd (KEL), a group company of Cadila Pharmaceuticals will set up its subsidiary in Europe to cater to the European market.

Talking to Business Standard, I A Modi, chairman of KEL and Cadila group, said, "We will set up a marketing company in Europe to cater to the European market business."

He further said, "We had made in-roads in the US market and very soon we will enter the European market." The KEL, a manufacturer of pharmaceutical machinery, was set up by Cadila Pharmaceutical Ltd primarily to cater to its parent group.

Modi further said that its European subsidiary will be held by KEL. "The company will be set up by the end of this year or by begin of the year 2008," adds Modi.

The European subsidiary will be set up in the same line of Karanavati's subsidiary in US. Karnavati America, the marketing office of Karnavati Engineering, based in USA. This strategic move of Karnavati was aimed at capitalising on the enormous potential of the machinery business in America.

"The European subsidiary will be held by KEL," informs Modi. As per the company, the European subsidiary will be named as "" Karnavati Europe. Presently, the company has gained grounds in Belgium, France and Italy.

To further tap the European pharmaceutical machinery market, the company is keen to have direct presence in Europe. Uptil now the company had agents through whom the business were carried out.

As per sources, the company is talking to a German pharmaceutical machinery manufacturing company for a possible joint venture to enter the European market.

Even the company might become original equipment manufacture (OEM) supplier for the German company. However, when asked to Modi he declined to comment on the issue as he said he is not aware of the matter.

The new company that will be set up will be based in United Kingdom (UK), as it is the preferable country for the company to set up its operation in Europe. The company is also planning to focus on new geographical areas for its expansion.

Nikhil Mehta, divisional head international business, KEL, said, "This year we will focus on Australia and New Zealand." The company has already carried out studies in both of these market and would enter into the market through agent.

The company had clocked a turnover of Rs 29 crore for the financial year ended on March 31. The company's 47.4 per cent business is in domestic market while the remaining comes from international business.