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| Summary of Project Information (SPI) |
| This Summary of Project Information 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. |
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| Project number | 24830 |
| Project name | Ocimum Bio |
| Country | India |
| Sector | Professional, Scientific and Technical Services |
| Department | Global Manufacturing & Services |
| Company name | Ocimum Biosolutions Ltd. |
| Environmental category | B |
| Date SPI disclosed | April 27, 2006 |
| Projected board date | June 6, 2006 |
| Date revised SPI disclosed | September 21, 2006 |
| Status | Active |
| Previous Events | Invested: November 8, 2006
Signed: November 3, 2006
Approved: November 1, 2006 |
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| Description of company and purpose of project |
| Ocimum Biosolutions Ltd. (Ocimum or the company) is a small sized, fast growing firm that provides contract research outsourcing (CRO) services to pharmaceutical and biotechnology companies & research organizations globally. Ocimum, with India as its base and subsidiaries in the US and Germany, recently acquired the Genomic Diagnosis Division of MWG Biotech AG, Germany (MWG) and integrated it into its Indian operations. Ocimum offers services to universities, research centers, various labs and pharmaceutical companies including basic human disease research, genetic analysis, pharmaceutical drug discovery and development, pharmacogenomics, toxicogenomics and clinical diagnostics. It plans to invest in research and development (R&D) infrastructure and for expansion into new business lines. The company had originally requested IFC to subscribe up to $5.0 million of equity to fund its growth plans. Since the release of the original SPI on April 27, 2006, IFC’s investment has been increased to an amount of up to $6.5 million to better serve the company’s business requirements. Out of this, up to $3.9 million will be in the form of equity and up to $2.6 million will be in the form of debt. |
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| Project sponsor and major shareholders of project company |
| The company’ sponsors are its three founders (employees), who own significant interest of the company’s equity: Mr. Subash Lingareddy, Ms. Anuradha Acharya and Dr. Sujata Pammi. |
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| Total project cost and proposed IFC investment |
| The company plans to invest about $12 million in the next 5 years to acquire the oligonucleotides business of a leading biotechnology firm and integrate it with its operations in India and invest in research and development (R&D) infrastructure in India. The company has requested IFC to invest up to $6.5 million to fund its growth plans. Since the release of the original SPI on April 27, 2006 the structure of the transaction has been modified to include equity of up to $3.9 million and debt financing of up to $2.6 million for a total of up to $6.5 million. These changes will have no adverse effects on the project or its developmental outcome. |
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| Location of project and description of site |
| The location of the project is in Hyderabad, India. |
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| Project Development Impact and IFC's Role |
The life sciences sector has the potential to make significant improvements in the health of the Indian population and worldwide. This is an area that is at the heart of the Millennium Development Goals, central to WBG strategy. Supporting the life science sector in the emerging markets has a number of important benefits: such as reversing the brain drain, ensuring access to high quality, cheap medicines for poor populations, providing high quality jobs, helping exports and supporting innovation, science and technology for the developing world. This biotech project will achieve a high development impact for the following reasons:
- By recruiting and training scientists to perform drug research services, this project supports global efforts in increasing developing country resources working on improving human health.
- India has already an emerging biotechnology industry. This project will help develop an internationally competitive CRO in India. Contract research outsourcing is a fast growing industry where India could become as competitive as in information technology.
- This project will also foster the development of a high-technology base in developing countries and the transfer of technology from North to South. |
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| 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 limited environmental and social impacts can be mitigated by adhering to industry best practices, recognized performance standards, guidelines, and/or design criteria. Environmental, health/safety, and social issues that may be associated with this project include:
- minimization of organic solvent usage,
- minimization of animal experiments,
- wastewater treatment and discharge,
- air emissions,
- solid and hazardous waste disposal,
- hazardous material management,
- occupational health and safety programs,
- reputational issues, and
- community relationship and development.
These issues will be reviewed during project appraisal to ensure the compliance with World Bank Group/IFC policies and guidelines.
To view the environmental documents for this project, click here |
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| Location of environmental documents in locally affected community |
6th Floor, Reliance Classic
Road No 1, Banjara Hills
Hyderabad - 500 034
A.P., India |
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| To contact the project company, please write to: |
Mr. Subash Lingareddy, Founder & CFO
6th Floor, Reliance Classic
Road No 1, Banjara Hills
Hyderabad - 500 034
A.P., India
Telephone: +91 40 5562 7200
Fax: +91 40 5562 7205 |
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