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Fonterra takes over Indian pharmaceutical firm

Dairy giant Fonterra is extending its footprint in the global pharmaceutical market with the acquisition of an Indian-based manufacturer.

Dairy giant Fonterra is extending its footprint in the global pharmaceutical market with the acquisition of an Indian-based manufacturer.

As part of a 50/50 venture with Dutch dairy company Royal FrieslandCampina, DMV-Fonterra Excipients (DFE)is to buy Brahmar Cellulose Private Limited, which makes ingredients used by the pharmaceutical industry to create tablets and pills.

According to Fonterra, DFE is the world's number one supplier of lactose excipients – or inactive substances that give drugs their form or consistency – used in tablets, capsules and powders for medical inhalers.

DFE accounts for around half of the global sales of lactose excipients and 5-10 percent of oral tablet excipients. It sources lactose from New Zealand and Europe.

The company said in a statement the deal would reduce supply chain and formulation costs.

DFE chief executive Jan Jongsma said the acquisition would create a unique market position for DFE as a manufacturer and supplier of all ingredients most commonly used in the pharmaceutical industry.

"The acquisition of Brahmar Cellulose is a further step in achieving our ambition to become a leading supplier in pharmaceutical excipients and will give a stronger base for future developments in this area", hesaid .

The acquisition, which is subject to conditions including the obtaining of various regulatory consents, is scheduled to be completed in the fourth quarter of 2011.

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