BackMerck plans to make India unit its 8th global competence centre
The Navi Mumbai facility will also provide consumer training to its local and foreign clients
Premium(Abhijit Bhatlekar/Mint)
German drugs and chemicals group Merck KGaA plans to make its Indian chemicals units in Navi Mumbai a global competence centre to cater to markets in select product segments, apart from being a customer training and application development location.
Merck has currently seven such competence centres located in Germany, Japan, Taiwan, Korea, Brazil, China and the US. The Indian unit will be its eighth and will be part of the global network of Merck’s production and application training centres.
By being a global competence centre, the Navi Mumbai facility will also provide consumer training to its local and foreign clients, apart from being an international sourcing base for performance chemicals such as effect pigments and cosmetics.
Matthias Lergenmuller, global head of the group’s cosmetics and pigment business, who was in India last week to finalize the plan, said the centre would require substantial amount of investments in terms of infrastructure, technology and people.
“Nothing stops the company to bring new investments to the country in the current business and political environment," Lergenmuller said in an interview on Monday.
However, he did not specify the size of investment that the new centre will require. “We are in the first stage of planning for such a globally competitive project, and it’s too early to divulge the financial details," he said.
Merck has about 40% market share in India in this segment.
The local market for performance chemicals including pigments, plastics and printing material, cosmetics and others is worth at least ₹ 20,000 crore.
“This is another reason that we look at India as a very important market globally. Here we have been growing much above the 16% yearly industry growth," said Siddhartha Sengupta, head performance materials, Merck Ltd, the India unit.
Expanding its clientele base both among the large corporations and small and medium enterprises at a faster pace is high on the company’s agenda. “Setting up a global network centre here to provide both product-related services as well as application and development consultancy will help achieving this goal faster," Lergenmuller said.
“The greater challenge that most of these multinational chemical companies are facing in the way of growth in India is the fluctuating trends in the manufacturing sector— whether it is automotive, paints or cosmetics," said a sector expert with a global consultant.
“With a national chemical policy in place, the constant efforts of key players to integrate the market with global industry have shown positive impact of late," said this person, who doesn’t want to be identified as his organization has advised Merck in some Indian projects.
Merck India had in October created an online collaborative platform to allow professionals across design disciplines (product design, architectural design, interior design, package design, cosmetics, etc.) and industries (coatings, plastic, printing, brand protection, cosmetics, etc.) to interact and network to learn new global trends and explore new possibilities in consumer product development.
Merck currently operates two entities in India—Merck Ltd, which is listed on local stock exchanges, and Merck Specialities Pvt. Ltd, a wholly- owned unit. Both these companies are into making and selling of drugs and chemicals.
The parent is also looking at acquisition opportunities in India in the pharmaceuticals and chemicals space.
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