Food company Nestle has initiated talks with British Biologicals, a dietary supplements manufacturer, to produce baby-food products.
A top executive with the Bangalore-based British Biologicals told Business Line that a team met its counterpart at Nestle in Geneva recently to negotiate a joint venture.
“Although at the initial stages,” the tie-up hinges on agreement on the stake each company will hold in the new company.
The deal will entail technology transfer and marketing support from Nestle for “exclusive paediatric products” to be manufactured by British Biologicals.
If the deal comes through, over 1,500 medical representatives with British Biologicals will be employed to market the new line.
New factory plan He said the agreement over stake-holding and due diligence of the Indian company would take some time.
Most of British Biologicals’ products are in the form of capsules, manufactured from its two plants near Bangalore.
Plans for a new factory are being drawn up. It is estimated to be built at a cost of ₹40-45 crore over 3.5 lakh sq ft at Jigani Industrial Area near Bangalore.
The company’s 2012-13 revenue touched ₹350 crore.
Exports to US likely VS Reddy, Founder and Chairman, British Biologicals, had earlier said this plant will produce paediatric products at manufacturing costs much lower than its competitors.
Exports to the US from this factory are also on the cards, with the company planning to file an application with the US Food and Drugs Administration.
The market for nutritional supplements in India is close to ₹1,000 crore and has big players such as Pfizer, Abbott, Alembic, Ranbaxy Laboratories, and Parry Neutraceuticals of the Murugappa Group.
Nestle has a nutrition segment in its business portfolio through which it launched NAN PRO1, an infant formula that contains probiotics. British Biologicals is working on vitamin gummies for children, and also tablets to fight infertility.
Nestle SA said by mail that it will not comment.