Matrix Laboratories Limited and Aspen Pharmacare Holdings Limited, South Africa, have forged a strategic alliance for further strengthening of their respective businesses by forming joint ventures in India and South Africa.

As part of this alliance, both the companies have signed two separate memoranda of understanding (MoUs) to enable them to hold cross-country ownership in two pharmaceutical manufacturing units through joint venture (JV) route.

As per the first MoU, Matrix and Aspen will form a 50:50 JV in India, which shall manufacture Active Pharmaceutical Ingredients (APIs) required by Aspen. Matrix would license the product technology relating to several Active Pharmaceutical Ingredients (APIs) to the JV Company on a non-exclusive basis. Aspen will uplift its requirements of these APIs from the JV company.

As per the second MoU, Matrix will pick up a 50 per cent stake in Fine Chemicals Corporation (FCC), South Africa, which is currently 100 per cent owned by Aspen. FCC has an API manufacturing facility in Cape Town, South Africa. This company has US FDA approved manufacturing facilities and has filed 25 DMFs with the US-FDA. The turnover of the company for the year ended June 2004 is ZAR 157 Million (US $ 23 Million).

FCC has a good customer base for its products in US, Europe and Africa. This is the leading API manufacturing company in South Africa. FCC has expertise in handling Oncology, Controlled substances and High Potency APIs. There is no overlap between the products of FCC and Matrix.

"The strategic alliance that we have formed with Aspen Pharmacare is very significant and will go a long way in further strengthening our overall API business. In addition, this alliance will also give Matrix a strategic presence in South Africa", said N Prasad, the Chairman and CEO of Matrix.

"Our alliance with Matrix will be a major milestone in our effort to secure strong supply source for APIs for some of our key products. Matrix would also provide strategic inputs in running the business of FCC", said Stephen Saad, the Chief Executive Officer (CEO) of Aspen Pharmacare.

The contemplated transactions remain subject to conclusion to definitive agreements, the performance of due diligence investigations and the obtaining of necessary approvals from, inter alia, the boards of directors of Aspen and Matrix, the South African Reserve Bank and the Reserve Bank of India.

About Aspen Pharmacare:
Aspen Pharmacare is Africa's largest pharmaceutical manufacturer and a major supplier of branded and generic pharmaceutical products to the southern African and selected international markets. With a total group turnover of US $ 321 million and net profit of US $ 52 million for the year ended June 2004. Aspen is listed on JSE Securities Exchange South Africa (JSE) with a market capitalization of over US $ 1.3 Billion.

Aspen's strong business foundation in South Africa provides the launching pad for its global expansion. The Aspen group has made strategic investments in the United Kingdom and Australia in line with its plan to harness synergies internationally.