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Chinese purchase makes Indian gelatine maker world number 2

By Kirsty Barnes , 27-Sep-2006

Sterling Biotech has emerged as the world's second largest gelatine producer after making its first international foray to acquire the gelatine manufacturing facility of Chinese firm China Gelatin.

Prior to the acquisition, Sterling was already the largest gelatine producer in India, with four manufacturing units producing 10,400 tonnes of gelatine per annum to supply the pharmaceutical industry who use the gelatine to make hard and soft shell capsules for drugs, as well as vitamin encapsulation, tablet binding and plasma expander.

However, the ambitious firm has been working hard to reach the number two position in the growing global gelatine market, which already has a turnover of about $3bn (€2.4bn) per year and a world consumption estimated at 250,000 tons.

 

To achieve this, Sterling has been actively expanding its capacity in India while also eyeing opportunities to tap into new global markets, particularly growth markets.

 

China is a good place to make its international debut - providing prime access to the Far East Asia growth markets, and itself being among the world's major consumers of gelatine.

 

In 2004, the company acquired the gelatine business of Rallis India - Asia's largest gelatine maker and at the time among the top five worldwide.

 

Last October, the firm struck a deal with Gujarat Biotech (TGBL) to purchase its penicillin G manufacturing unit, located in Vadodara, India, which it then converted into a facility for manufacturing gelatine derivatives by upgrading the technology.

 

Sterling has also indicated it is looking for opportunities to make additional acquisitions in the US and Europe, where its nearest rival, Gelita, is currently active.

 

German-based Gelita is the world number one gelatine producer, manufacturing about 85,000 tons of gelatine every year in its production plants in Europe, North America, South America and the Asian-Pacific.

 

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