Vivimed lab close to buying German firm

Hyderabad-based Vivimed Laboratories, a business-to-business speciality chemical and pharmaceutical manufacturer, is close to buy the cosmetics and related ingredient manufacturing division of a German multinational specialty chemical and pharmaceutical company.

Vivimed will add to its fold three units of the German company, located in Germany, the UK and India, sources said.

The three units, which include a research and development centre, currently manufactures about 45 products with a turnover of $30-40 million. Vivimed was negotiating with the German company since last year to take over the brands, existing business and intellectual property rights of that division, they said.

Germany, the fourth-largest chemical manufacturer in the world, is home to some of the largest pharmaceutical and specialty chemical companies such as BASF, Bayer, Henkel, Fresenius, Boehringer Ingelheim, Lanxess, Merck KGaA, and Evonik, which acquired Degussa.

Santosh Varalwar, managing director and promoter of Vivimed Labs, preferred not to comment on the acquisition. "We have identified a few targets in Europe and negotiations are going on," he said. The deal may be signed within a week," said the source, adding that Vivimed would move production of the acquired company to its manufacturing locations in India.

Vivimed, which already has two specialty chemical manufacturing locations in Hyderabad and Bidar, Karnataka, and three pharmaceutical plants at Haridwar, Nainital and Hyderabad, is planning a large scale green-field chemical complex at a 50 acre location in Sri Sailam Road near Visakhapatnam. Investment in the chemical complex with three to four blocks will be to the tune of above Rs 200 crore, said Santosh Varalwar.

The first phase planned to be completed by 2008 with Rs 25 crore investment, the company plans to augment the manufacturing capacity of anti-dandruff product zinc pirithione (brand Dantuff), from 300 tonne a year to 1000 tonne a year. The company manufactures about 20 per cent of the global production for this chemical.

He said Vivimed has plans to launch about 12 new products, mainly in the skin care and hair-dye segment. This includes a unique skin tanning product, Di-Hydroxi Acetone (DHA), developed in association with JNT University, Hyderabad. Vivimed will also launch a sunscreen UVB absorber (octocrylene), an ascorbic acid derivative for skin care and specialty chemicals for hair-dyes, said Varalwar.

Vivimed, started in 1985, is the second largest manufacturer in the world for Trichosane "" an anti-microbial agent used in mouthwash and toothpaste. The company supplies its products to most of the leading FMCG goods and cosmetics manufacturers in different parts of the world.