Orchid Chemicals has pulled out of its joint venture with North China Pharmaceutical Corporation (NCPC) to focus efforts on India.
The Indian manufacturing and development firm has worked with NCPC since 2002 , when it first signed the 50:50 JV to manufacture sterile cephalosporin bulk actives and formulations for the Chinese market.
However chairman and managing director K Raghavendra Rao said though the project at first afforded a “win-win” situation, the competitive nature of the Chinese pharma market has led to the decision to consolidate manufacturing operations in India. As a result, Orchid has sold its half of the business to NCPC for $13.9 million.
In a press statement, Rao said: “With the local Chinese players fast integrating, the operating conditions have grown quite competitive in China. Moreover, the products that the JV manufactures and markets in the local Chinese market have reached a mature stage resulting in flat growth prospects going forward. Hence, it was a prudent decision to relinquish our stake to the partner and exit the JV.”
The news follows a difficult financial year for the firm which saw profits fall as a result of a plant closure in India.