Orchid Chemicals & Pharmaceuticals Ltd's 50:50 joint venture in China with the $800 million North China Pharmaceutical Corporation has commenced first t phase production at its manufacturing facility.

Of the total project cost of $25 million for the joint venture company, Orchid Chemicals has invested $5 million in equity for its 50 per share, while $15 million was mobilised by the joint venture as debt from a Chinese bank.

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Announcing the commencement of production, K Raghavendra Rao, the managing director of Orchid Chemicals, said that the joint venture company would produce sterile crystalline cephalosporin bulk actives.

In the second phase, which will be commissioned by October end, sterile lyopholised bulk actives will be produced, he said.

"Orchid Chemicals will be supplying advanced intermediates from its Chennai unit to the Chinese joint venture. This will give a revenue of $7-8 million to Orchid Chemicals during the current fiscal. Our teaming up with the largest pharma group in China, NCPC, is a win-win situation for both," Raghavendra Rao said.

"Orchid Chemicals is the largest manufacturer-exporter of Cephalosporin bulk actives in the country and ranked among the top five cephalosporin producers in the world. The Chinese manufacturing facility has a production capacity of 300 tonnes per annum and a product range of 6 cephalosporin bulk actives for parenteral use. The joint venture's scope is likely to be extended into formulations in future," Rao added.