London-headquartered TLG Capital, a frontier-markets-focused private equity fund, has increased its stake in Cipla’s African joint venture with Quality Chemical Industries Ltd (QCIL). According to reports, TLG has increased its stake in the Uganda-based QCIL to 12.5 per cent. The company, in which Mumbai-based Cipla Ltd holds around 40 per cent stake, manufactures triple-combination antiretroviral (ARV) drugs.
TLG Capital had first invested in QCIL in September, 2009. The company had also received backing from South Africa’s Capitalworks Investment Partners. Incidentally, Cipla is one of the largest Indian drug manufacturing firms, with revenues of Rs 6,321 crore and a net profit of Rs 989 crore in FY11.
QCIL, which was initially set up to import drugs from India, had formed a joint-venture plant with Uganda in 2004 and manufactures drugs that combat HIV/AIDS and malaria.
QCIL currently produces up to six million tablets per day, but the capacity is set to rise to 18 million within the next 12-24 months, with production costs to be funded mainly through the company’s existing cash flows. The firm was also prequalified by World Health Organization (WHO) last year to become a contract manufacturing plant for Cipla.
TLG Capital has also invested $5 million in Kolkata-based Re-Feel Cartridges, a printer cartridge refill and laptop repair services company.