Dishman Pharmaceuticals and Chemicals Limited

The Netherlands: A stepping stone for global expansion

Location: Veenendal
Activities: Location of Dishman Netherlands, fully owned subsidiary
Industry: Specialty chemicals

Setting up shop in the Netherlands was no overnight decision for Dishman Pharmaceuticals and Chemicals Ltd, but in the end, the company chose the Netherlands over other European nations to locate its manufacturing base. When it came to taking a decision, it was an effortless one for Mr J R Vyas, Managing Director of the company, who was thoroughly impressed by the professionalism and enthusiasm he saw among Dutch businessmen and scientists over a number of years of interaction.

Small Beginnings, Large Vision
For a company that started small, employing one chemist and three operators Dishman was forced to look at oversees markets early on. It realized, within a year of its inception in 1989, that there was no domestic market for specialty chemicals, especially quaternary ammonium compounds in India. Overnight, Dishman's vision went global.

From appointing stock points through 1990 to opening offices in London, UK and New Jersey, USA in 1998, the company grew rapidly. Throughout this period, Holland kept appearing on Dishman's radar with great regularity. "At that time, I visited the Netherlands, but had no intention of doing business there," says J R Vyas, Managing Director, Dishman Pharmaceuticals and Chemicals. "I delivered lectures to several R&D teams in several companies," he recalls.

Over time, Dishman has not only worked at growing its export base, but also diversified its product range through key acquisitions. Two of these have been in the Netherlands.

At Ease with the Dutch
Beyond marketing Dishman's export products, a relationship with Dutch chemical company Solvay is what really set the ball rolling for the Dutch connection. Beginning 2001, Dishman and Solvay entered a Toll Manufacturing Agreement to convert raw material supplied by Solvay into a vitamin D3 intermediate. This fostered many visits of Dutch scientists to help improve processes at Dishman's Indian facility, gradually growing into a relationship of trust. "Our interactions with the Dutch people grew into friendship and the friendship continues over time. I started liking the Netherlands and began thinking of it as a good destination to do business," explains Mr Vyas.

Cementing the Bond
When opportunity presented itself in the form of a meeting with the owner of Dutch company Chemconserve at an exhibition, Mr Vyas and he were quick to see the obvious synergies. Dishman acquired the quaternary phosphonium unit from Chemconserve in 2003, adding a new product to its bouquet.
In 2007, Dishman acquired Solvay's fine chemicals, vitamin D and vitamin D analogues business. Along with this, the Veenendal facility was also taken over, which now houses an amalgamated manufacturing and marketing company called Dishman Netherlands BV.

Good to do Business with
Lower taxation, simpler pension rules, transparent processes and a supportive government attitude are key aspects that make Dishman comfortable in the Netherlands. "In all our dealings, the transactions were smooth and there were no bureaucratic hurdles at all. The area council in Veenendal, where Dishman Netherlands is located, was also very supportive," stresses Mr Vyas. Also, Dishman has been using Rotterdam as a warehousing hub for Europe despite having an office London since 1990. "This is where our stocks come into Europe and are then distributed to other places," says Mr Vyas.

Whereas India's benefit for the chemicals and pharmaceuticals industry lies in the abundance of human resource available and the ability to generate 24X7 labour, Holland scores high in terms of working atmosphere, clear labour laws, knowledge and sincerity of workers. "As compared to neighbouring European countries, the Netherlands has friendly laws, especially labour laws that allow staff and employers to reach a consensus through the Workers' Council and other organizations," says Mr Vyas. Finally, this is what made the Netherlands the most logical choice for Dishman and this, among other reasons is why Holland is "a good country to do business with."

Source: Mukta, JR Vyas; Date: September 2008