Taking forward its strategic alliance with MCHEM Pharma (Group) Ltd of China, Matrix Laboratories Limited has signed a revised Memorandum of Understanding (MoU) with the Chinese partner to further strengthen the business relationship.

While the first MoU signed on February 6, 2005 broadly provides for a Joint Venture relationship between the two companies, the revised MoU will facilitate Matrix to acquire 60 per cent of the ownership interest in MCHEM Pharma Group and four other associate companies of the MCHEM Pharma Group. The consideration for the acquisition of the ownership interest will be in cash or in kind or a combination of both, subject to the detailed due diligence and all the requisite approvals.

The decision to enter into China is part of overall long-term strategy of Matrix Laboratories to become an end-to-end player and thus integrate both forward and backward. In line with this strategy, Matrix Laboratories acquired a Finished Dosage Facility in January 2005 in Nashik. Now, this Joint Venture is an initiative from Matrix Laboratories to backward integrate and further strengthen the Supply Chain.

"Apart from emerging as a fully integrated and cost effective pharmaceutical player, the combined strengths of Matrix and MCHEM should provide an opportunity to meet the unmet needs of certain emerging markets including China", said Mr. N Prasad, the Chairman & CEO of Matrix Laboratories.

"We are extremely happy to partner with Matrix Laboratories in its mission to become a major supplier of Active Pharmaceutical Ingredients (APIs) to the global market. MCHEM Pharma group companies will provide the requisite base for Matrix Laboratories in China to leverage the advantages that our country offers in this field", said Mr. Mark Gao, Chairman of MCHEM Pharma group.

About MCHEM Pharma group:
Based in Xiamen, on the East coast of China, MCHEM Pharma Group manufactures pharmaceutical products ranging from basic chemicals, intermediates, active pharmaceutical ingredients and finished dosage forms, apart from interest in distribution of pharmaceutical products in China. MCHEM group is a major supplier of finished dosage forms of Anti-AIDS products to the Chinese Government. MCHEM's finished dosage forms facility has been approved by the Medicines Control Council (MCC), South Africa. MCHEM group, with a sales turnover of USD 35 million in 2003, focuses on therapeutic categories such as Anti-AIDS, CNS, Cardiovascular and Oncology.