Lactose giant DMV-Fonterra to buy Indian cellulose excipient maker Brahmar

By Gareth Macdonald

- Last updated on GMT

DMV-Fonterra excipients (DFE) will buy Indian manufacturer Brahmar Cellulose Private Limited (BCPL) to strengthen its position in the pharmaceutical excipient market and reduce costs.

Cuddalore, Tamil Nadu-headquartered BCPL makes cellulose-based excipients, namely micro crystalline cellulose, sodium carboxy methyl cellulose and croscarmellose sodium, which are used in the manufacture of pharmaceutical tablets and pills, as well as foods and cosmetics.

DFE, a joint venture between New Zealand dairy farm group Fonterra and Dutch dairy company Royal FrieslandCampina (DMV), makes lactose excipients and claims to supply between five and 10 per cent of all those used in oral solid dose (OSD) tablets.

The firm said the acquisition, which is expected to complete in the fourth quarter, will position it as the “sole manufacturer and supplier of the most commonly used diluents and superdisintegrants to the pharmaceutical industry.

This, in turn, will improve DMV-Fonterra Excipients’ ability to support its customers with reducing their supply chain and formulation costs by having a consistent, single source and single quality framework across their key products.

DFE’s comments about reducing costs are timely given that, just yesterday, rival drug excipient supplier BASF​ cited energy, staff and raw materials expenditure as a key driver for its decision to increase what it charges for both excipients and active pharmaceutical ingredients (API).

In a press release DFE CEO Jan Jongsma said: “Long-term synergies will be achieved by combining DFE’s current global market position and sales network with Brahmar Cellulose’s extensive product knowledge and market position in India​.”

The acquisition will be DFE's most significant investment in the pharmaceutical excipient sector since it gained control of FrieslandCampina’s Domo-Pharma business in January​ last year in a transaction worth around $52.5m ($75.7m).

Neither Fronterra nor DMV was able to respond to request for additional information ahead of publication.

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