ET Bureau|Updated: Jul 17, 2019, 07.44 AM IST
MUMBAI: Drugmaker Cipla’s European unit has formed a joint venture with Shanghai-based Jiangsu Acebright to manufacture respiratory products in China, marking the Indian company’s second attempt at entering the Chinese market.
Cipla EU will hold majority stake in the JV which will have a combined investment of $30 million, Cipla said in a filing to the stock exchanges on Tuesday.
The announcement, which came during market hours, sent Cipla’s shares up by 1% during trade. The scrip closed 0.5% higher on the BSE at Rs 553.
“We are pleased to strengthen our relationship with Cipla through this joint venture and strongly believe the joint venture will bring more products to Chinese patients in the respiratory segment,” said Shengping Xu, chairman of Acebright Group, in a statement.
Jiangsu Acebright Pharmaceuticals is a subsidiary of Shanghai-based Acebright Pharmaceuticals Group that manufactures active pharmaceutical ingredients for anti-viral, oncology products and vitamin ingredients.
In 2014, Cipla’s then subsidiary Mediate had sold its 48% stake in its joint venture with Jiangsu Acebright to the latter for Rs 115 crore.
In an interview with ET earlier this year, Cipla’s CEO Umang Vohra had said the company planned to pull back from noncore regions and focus on markets like the US, China, Brazil and South Africa.
“While our core home markets remain our current growth anchors, we see China as a crucial part of our future roadmap. In May, we inaugurated our office in Shanghai. We have a longstanding relationship with Acebright, and this partnership to build a manufacturing facility in China is a significant step for us”, said Vohra.