The Israeli branch of veterinary company Phibro Animal Health Corporation has signed a memorandum of understanding (MoU) with Indian company Zydus Cadila, in which the latter company will set up a plant in India to manufacture Phibro's products and market them in India. Market sources close to Zydus Cadila estimate the value of the deal at $150 million over five years. Phibro is listed on Nasdaq with a $1.5 billion market cap.
Phibro Israel general manager Jonathan Bendheim, son of parent company chairman, president, and CEO Jack Bendheim, says, "We're a leading global company in vaccinations and drugs for animals used as food for people. My grandfather founded the company. In the 1970s, my father decided to start operating in Israel for Zionist reasons, and this activity is now very financially worthwhile.
"We have a drugs plant at Neot Hovav, and in late 2008, we acquired Abic from Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA) - not 'Abic and it's over,' which deals in drugs for humans, but their activity in animals, from which the decided to get rid of. Actually, most of the major veterinary drug companies were founded as spinoffs of drug companies that dealt with both animals and human beings. This is no longer the case, however; most companies now deal with one or the other."
Its business in Israel has now become Phibro's global base for development and marketing of vaccinations, in which Phibro is a global leader.
"Since Israel is in the birds' migratory path, many bird diseases come here. After we develop the drug in Israel, we find other markets for it. In birds, we're among the leaders, and we're also developing vaccinations for other animals. 18 months ago, we acquired activity in fish vaccinations in Israel. Global fish consumption is growing, because they supply the most protein, compared with the protein they consume. This acquisition didn't cost a lot, but it gave us a rare opportunity. There's a lot of innovation in the fish sector in Israel."
In addition to vaccinations, Phibro Israel also includes a plant in Petah Tikva for making veterinary drugs, and the company's marketing activity in Turkey, where it leads the vaccination market, Africa, India, and Russia is conducted from Israel. Phibro's business in Israel accounts for 20% of its global total of $750 million last year. The company has 360 employees in Israel.
Relations were established with the Indian company when Teva still had the vaccinations business. "This company used to distribute Teva's products, and today, from a small company, it has become the fourth largest pharmaceutical company in India, if you take both veterinary and human drugs into account. At the same time, we saw that in India, regulation is becoming tougher, and it will soon be more difficult to export to there, so we saw an opportunity to set up a joint plant. They're experts in building such plants. The potential for expansion is enormous," Bendheim says.
"Everybody's talking about startups and high tech," he sums up, "and when it comes to production and agriculture, it's hard to get attention. We see ourselves as an opportunity for Israel."
Published by Globes [online], Israel Business News - www.globes-online.com - on July 23, 2017
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