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| Granules |
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| Summary of Proposed Investment |
| This Summary of Proposed Investment is prepared and distributed to the public in advance of the IFC Board of Directors’ consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC’s activities, and this document should not be construed as presuming the outcome of the Board decision. Board dates are estimates only. |
| Project number | 25947 |
| Company name | Granules India Limited |
| Country | India |
| Sector | Chemicals |
| Environmental category | B |
| Department | Global Manufacturing & Services |
| Status | Active |
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| Date SPI disclosed | May 3, 2007 |
| Projected board date | June 4, 2007 |
| Previous Events | Invested: June 14, 2007
Signed: June 8, 2007
Approved: June 7, 2007 |
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| View Environmental & Social Review Summary (ESRS), click here |
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| Overview |
Sponsor/Cost/Location |
Development Impact |
Contacts |
Attachments |
| Project description |
Granules India Limited (Granules or the company) is a leading Contract Manufacturing Organization supplying high volume Active Pharmaceutical Ingredients (APIs) and Pharmaceutical Formulation Intermediates (PFIs) to the bulk over-the-counter (OTC) drugs industry in the US, Europe, Latin America, Australia and India. Granules has three wholly-owned manufacturing plants in India and one plant in China through a 50:50 joint venture (JV). The company is undertaking an investment program estimated to cost about $32 million, comprising of:
- setting up a 6 billion per annum multi-product tableting plant;
- setting up a 3,600 TPA paracetamol API plant;
- installing an additional 3,600TPA of paracetamol PFI capacity;
- investment in a JV in China for ibuprofen API with a capacity of 3,800TPA; and
- development and registration of new products. |
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| Project sponsor and major shareholders of project company |
Granules began operations in 1991 near Hyderabad, India. It is a public company that listed on the Bombay Stock Exchange in 2002 and the National Stock Exchange in 2005. As of April 30, 2007 the shareholding structure was:
- Mr. C. Krishna Prasad and Family 32.4%
- Ridgeback Capital Investments Ltd 14.78%
- Institutional Investors 13.03%
- others 39.79% |
| Total project cost and amount and nature of IFC's investment |
| The project costs are estimated to be $32 million. The proposed IFC investment will be up to $15 million. |
| Location of project and description of site |
| The key project sites are: Bonthapally and Gaigillapur in Hyderabad, India. Granules has existing plants located in industrial zones near the villages of Bonthapally and Gaigillapur, near Hyderabad. The sites are well connected by road to Hyderabad. |
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| Anticipated development impact of the project |
The project’s major development impacts include:
- promotion of knowledge transfer and technical skills development of the company and its staff resulting from an increased focus on the regulated pharmaceutical markets;
- setting higher standards for product quality and process efficiencies for the other local pharmaceutical companies;
- extension of the company’s expertise and know-how to its joint venture operation in China; and
- increasing access to high quality, affordable drugs in unregulated markets. |
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| IFC's expected development contribution |
IFC’s expected development contributions are as follows:
- IFC will provide long-term capital to support the growth strategy of the company.
- IFC will also provide advice on environment, insurance, and corporate governance related measures to help align the company’s practices with international best practice standards. |
| Environmental and social issues - Category B |
This is a Category B project according to IFC’s Procedure for Environmental and Social Review of Projects because a limited number of specific environmental and social impacts may result which can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria. The following potential environment, health and safety and social aspect of the project were analyzed:
- social and environmental assessment and environmental, social, and health and safety management systems;
- labor and working conditions; pollution prevention and abatement;
- community health, safety and security; and
- land acquisition and involuntary resettlement.
The review of this project consisted of appraising technical, environmental and social information submitted by the company including detailed questionnaires on the environmental and health and safety aspects of each of its facilities, including independent Environmental Impact Assessment (EIA) reports prepared for both the Bonthapally and the Jeedimetla industrial development areas. During project appraisal IFC visited all three of Granules’ production facilities (Bonthapally, Jeedimetla and Gaigilapur) in the Hyderabad area, and held discussions with Granules’ senior management team regarding the company’s human resource policies and procedures. |
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| For inquiries about the project, contact: |
Mr. Vaidyanathan Nateshan, Chief Marketing Officer
Granules India Limited
8-2-293/A/A/2, Road No. 2, Banjara Hills
Hyderabad 500 033, India
Telephone: +91-40-2355 3266
Dir: +91-40-2354 4032
Fax: +91-40-2354 7894
Environmental documentation will be made available at the following location:
Granules India Limited
8-2-293/A/A/2, Road No. 2, Banjara Hills
Hyderabad 500 033, India |
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| For inquiries and comments about IFC, contact: |
General IFC Inquiries
IFC Corporate Relations
2121 Pennsylvania Avenue, NW
Washington DC 20433
Telephone: 202-473-3800
Fax: 202-974-4384
E Mail: Webmaster |
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