The Ahmedabad-based company, the second-largest animal vaccine maker in India with a 35 percent market share, has chosen to go global with an agreement signed with the Golchha Organisation of Nepal, a nearly 75-year-old industrial house with interests in steel, electronics, jute, paper and trading and service activities.
As per the agreement signed between Hester's CEO Rajiv Gandhi and Shekhar Golchha here Sunday, a 100 percent export-oriented factory that will supplement the existing range of vaccines manufactured by Hester in India will be set up in Panchkhal in Kavre district, close to Kathmandu.
To be built on an investment of about Rs.150 million, the plant is expected to be operational by December 2012 and export 2.5 billion of animal vaccine doses, mostly to Europe, Africa and South America.
Hester, listed on the Bombay Stock Exchange and reporting a turnover of Rs.375 million last year, will hold 65 percent share in the JV.
The deal was struck in July after Shekhar Golchha went to Ahmedabad to woo investors and gave a presentation on Nepal.
Speaking to the local media, Gandhi said though aware of the political turmoil in Nepal and strong-arm tactics of the Nepali labour unions, a decisive factor for setting up the Nepal JV was the cold climate of the Himalayan kingdom, a major requirement for the plant, and a dust-free environment.
The product range will include between 15-20 vaccines for poultry, sheep, cattle and swine. This is the first venture abroad by the 14-year-old company.
The fresh Indian investment comes even as Indian ayurvedic giant Dabur's Nepal venture remains under a prolonged smear campaign by a section of the media.
Though deplored by the Nepal-India Chamber of Commerce and Industry as well as the Federation of Indian Chamber of Commerce and Industry, which warned that such attacks would keep away foreign investors, Dabur's Real Mango Nectar brand of fruit juice as well as its honey remain under siege.
India is Nepal's biggest trade partner, accounting for 58 percent of Nepal's merchandise trade and one-third of trade in services.
It is also the single largest source of foreign direct investment, running over 450 projects that together have an investment of over Rs.1,400 crore - 43 percent of all foreign direct investment (FDI) in Nepal.