Ranbaxy sells China JV and changes strategy

By Gareth Macdonald

- Last updated on GMT

Related tags: Generic drug

Ranbaxy Laboratories has sold its Chinese JV, Ranbaxy Guangzhou China Limited (RGCL), as part of a new approach to the country’s rapidly expanding drug market.

The Indian generics firm, which set up the joint-venture (JV) in partnership with Guangzhou Baiyunshan Pharmaceutical and Hong Kong New Chemic, sold its 83 per cent stake in RGCL to state-owned HNG Chembio Pharmacy.

Ranbaxy said that, while China is still an important market, in the future its operations will focus on importing generic drugs produced at manufacturing facilities outside the country.

This transaction is part of Ranbaxy’s endeavour to develop a new business model for China which entails the marketing of value added pharmaceutical formulations and the consolidation of manufacturing operations, for cost synergies​.”

Sarabjit Kour Nangra, vice-president of research at Angel Broking, told India’s Business Standard​ that the development is part of Ranbaxy's efforts to look at synergy opportunities with parent Daiichi Sankyo.

He explained that: “This is part of the restructuring process that is going on. The company had mentioned that it will be exiting non-profitable geographies. To that extent it is a positive development​.”

Early last month​ Ranbaxy pulled out of its Japanese JV Nihon Pharmaceutical Industry, selling its 50 per cent stake in the enterprise to partner Nippon Chemipar in order to pursue an independent strategy in the country’s generics market.

And, outside Asia, Ranbaxy has also been restructuring its operations, reducing its workforce in the UK and Romania to cut costs and stave off the impact of the US import ban on products made at two of its plants in India.

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