The move by Wyeth Lederle ties in with a trend in recent years for multinationals to source ingredients from companies in Asia, sometimes selling off manufacturing to outside operators and then outsourcing back the production of ingredients used in already-validated facilities.
Earlier this month, Baxter International announced plans to outsource huge quantities of active pharmaceutical ingredients (APIs) from Indian pharma players for its global generic injectable markets.
Wyeth, currently the world's 10th largest drug company, is planning to purchase the entire production of one of the three facilities at the Ghatkopar plant which makes corticosteroid ingredients, according to India InfoLine.
And for Ariane Orgachem, the acquisition will bring not only a foothold in corticosteroids but also hormone ingredients and the capacity to make bulk drugs such as the antidepressant paroxetine, the diuretic torsemide and gliclazide for diabetes.
Although the value of the deal has not been disclosed by the MNC pharmaceuticals giant, media reports estimate the size to be anywhere between R400 to R600 million (€7.1-€10.7m).
Wyeth has other manufacturing facilities at Valsad in Gujarat, Verna in Goa and a unit at Nashik in Maharashtra after its merger with Geoffrey Manners.
Ariane is planing to increase the capacity at the Ghatkopar unit by de-bottlenecking and investing in modern equipment, and will reportedly spend R70-R80 million upgrading the facility to current Good Manufacturing Practice (cGMP) standards.