United Phosphorus Ltd signs agreement with ISK

United Phosphorus Ltd has announced that Ishihara Sangyo Kaisha, Ltd (ISK) has signed the agreement for the production of certain agrochemicals with the Company and furthermore is exploring the possible business alliance of distribution in India and certain other countries.

The Company has been entrusted by ISK with manufacture of certain products developed by ISK. ISK, the Company, and Mitsui & Co., Ltd (Mitsui) have a plan to establish a joint venture company for the development, registration and distribution of ISK products in India. In addition, the companies continue the discussion about the possible co-operation in the countries other than India.

ISK is intending to continue to focus on the Research and Development, especially creating the new novel molecules and more than ninety percentage of the total turnover for agrochemical sales (turnover of 41.0 Billion Japanese Yen and net earning of 8 Billion in March, 2006 as consolidated basis) is coming from their proprietary products.

With this venture, ISK will be able to access the world class manufacturing base of the Company as well as the Company's domestic marketing network. The Company presently has 8 manufacturing facilities in India, one each in UK and Argentina. The Company currently has a 8% market share in India.

This partnership will continue to allow the Company to grow organically, inorganically and through business alliances.

The Company believes that this alliance is of strategic importance and this business model will differentiate the Company from other generic companies as being the most cost competitive manufacturer with an access to new patented chemistries which can be leveraged by the global distribution network set up by the Company. This will also compliment some of the recent brand acquisitions.

ISK intends to implement their new manufacturing business model for their agrochemicals products as their one of the business strategies in addition to the R & D aiming at increasing its global competitiveness and profitability.

ISK, therefore, is strengthening the stability and global competitiveness of their production through establishing the multi-production sites of technical materials. Most of its agrochemical products already have been produced not only in Japan hut also in Europe North America, Korea, China and Brazil.

It is currently estimated that 70 percentage of total products used globally are off-patent products while the cost of the development and commercialization with new molecule have been increased significantly. The Company has been recognized as one of the most competitive producer of agrochemicals in India and the fastest growing Generic company in Agrochemical industry with direct presence in 35 countries and a sales in more than 80 countries.

Source : Equity Bulls

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