Reckitt, Piramal Plan Thrust On Otc Products

Reckitt & Colman and Nicholas Piramal will use their newly-formed joint venture to aggressively tap the OTC market. New OTC brands will be introduced through this venture and existing brands like Dettol will get a marketing face-lift. The venture will also acquire brands from other companies.

Reckitt Piramal, the 60:40 OTC marketing venture will begin operations in January 1998 and will be the country's largest OTC company in India.

With an equity base of Rs 10 crore, the company has three stakeholders, Reckitt & Colman Plc, UK, with a 40 per cent, Reckitt & Colman, India with 20 per cent and Nicholas Piramal with a 40 per cent stake. Nitin Ghadiyar of Nicholas Piramal, has been appointed managing director of Reckitt Piramal.

 

Under the terms of agreement, the three partners will continue to own their respective brands and manufacture their products to be sold on a cost plus basis to the joint venture. No royalty is to be charged.

While distribution will be carried out by the partners, marketing will be handled by the joint venture's 180 strong field force drawn from the ranks of Nicholas and Reckitt.

The joint venture will also seek export opportunities. Addressing journalists, Vermon Sankey, CEO, Reckitt & Colman, UK, said " We are looking at the potential for sourcing raw materials and finished products from India."

These could be sourced from Nicholas Piramal, Reckitt & Colman of India or third parties.

"The turnover in the first year of operations is immaterial and it would be the current sales figures. What we are looking at is the future growth. The OTC market is expected to grow at least by 20 per cent per annum", he said when asked about sales projections.

"Both partners are bringing an equal number of products", said Ajay Piramal, chairman of Nicholas Piramal. New products from Reckitt & Colman Plc, like Gaviscon and Fybozest, will initially be marketed by Nicholas Piramals's 1200 strong field force and then transferred to the joint venture company when there is an OTC market for them, said Nicholas officials.

Francis Pinto, CEO, Nicholas Piramal, said, " The initial focus is on three areas- Dettol, pain relievers like Disprin and Saridon and gastro-intestinals like Polycrol and Rennie."