Bharat Forge may close Europe plant as demand slows

Around 75% of the company’s consolidated revenue comes from overseas, and a lion’s share of it from the automotive sector

Mumbai: On the back of automobile demand falling by at least 50% in Europe, Bharat Forge Ltd could shutter an unviable plant in Europe.

Around 75% of the company’s consolidated revenue comes from overseas, and a lion’s share of it from the automotive sector.

“We have six plants in Europe and we could do with five instead of six. It doesn’t really make any sense but we have not made that decision yet,” chairman and managing director Baba Kalyani said. “We will make that decision once we get a little more clarity from our customers.”

Scottish Stampings Ltd, which the company bought in 2005, could be the first. Deputy managing director G.K. Agarwal said: “At Scottish Stampings, which is located in the UK, we have seen some issues with the volumes being very low, as it is a single press operation. So that is a operation that could possibly get reorganized.”

The firm is now planning for flexible capacity that can be realigned to market demand quicker than fixed capacity. Although the company is trying hard to maintain profitability by shutting idle capacities, it is also looking to buying assets to climb up the value curve.

Agarwal said: “We are looking at a lot of consolidation opportunities right now. What would interest us is opportunities that would consolidate our business in terms of technology, market share and obviously our efforts to rationalize our own capacities on a global scale.”

The company said most consolidation opportunities are in Germany and the US.

With at least Rs500 crore in surplus cash, the company is looking at forging itself stronger to better weather future economic storms.

Menaka Doshi and Sumantra B. Barooah

CNBC-TV18

cnbctv18@livemint.com

Swiss firm moves apex court against Cipla

Basel, Switzerland-based Roche’s appeal questions the decision of a higher bench of the Delhi high court, which said the drug maker suppressed facts related to its Tarceva patent

C.H. Unnikrishnan

Mumbai: Swiss drug maker F. Hoffmann-La Roche Ltd has petitioned the Supreme Court against a Delhi high court order in a patent violation lawsuit regarding its cancer drug Tarceva with Indian pharma firm Cipla Ltd.

An executive at Roche’s Indian subsidiary, Roche Scientific Co. (India) Pvt. Ltd, confirmed that the company’s lawyers had been instructed to go ahead with the appeal. The official declined to be named.

Basel, Switzerland-based Roche’s appeal questions the decision of a higher bench of the Delhi high court, which said the drug maker suppressed facts related to its Tarceva patent and there was no case of patent infringement against Cipla. Roche has paid a fine of Rs5 lakh imposed by the higher bench as penalty for suppressing facts and not making full disclosure to the court.

Roche had in April appealed to a higher bench of the high court against a lower bench ruling that allowed Cipla, a manufacturer of generic medicines, to continue selling a generic version of Tarceva despite it having been granted a patent in India.

In March, a single-judge bench of the Delhi high court refused Roche’s plea for an injunction to restrain Cipla from selling the drug on the ground of public interest. The higher bench of the high court upheld the interim ruling.

Roche’s appeal to the apex court asks for a reversal of the high court’s finding that it suppressed facts, as well as the lower court’s decision to not grant a interim injunction against Cipla, said a lawyer familiar with the development, on condition of anonymity.

The Tarceva lawsuit started after Cipla launched a generic version under the brand name Erlocip in the domestic market in December 2007. In January 2008, Roche asked the Delhi high court for an injunction to prevent Cipla from selling Erlocip. A final judgement on the petition is awaited.

“Given that Cipla has been selling the drug for more than a year now, it is unlikely that the Supreme Court will now grant an injunction in favour of Roche. More so, the final trial is now proceeding in the trial courts,” said Shamnad Basheer, professor of intellectual property law at the National University of Juridical Sciences in Kolkata. “At best, the Supreme Court may order that the trial be expedited...”

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