Oaktree Capital acquired nearly 60 per cent stake in Cogent Glass and plan to invest Rs 200 crores in the company. Tell us about the strategies for the investment?
The strategy is to establish Cogent Glass as a leading supplier of type 1 moulded and tubing glass for the pharma industry in India and, furthermore to develop it as a global supplier focussed on regulated markets.
SGD, another firm in which Oaktree Capital has made an investment, has signed an agreement with Cogent Glass. Can you reveal more about the terms and conditions of the agreement?
The agreement calls for technology exchange between Cogent and SGD. In addition, it calls for SGD to provide assistance and advice in the areas of production and industrial management, sales, marketing, financial management and control.
Why is an LA-based investment firm, Oaktree investing in a pharma packaging firm?
Oaktree has several investments in the packaging field including its investment in SGD, which is a global leader in pharma packaging. Oaktree believes that the pharma packaging segment will provide significant growth opportunities in the future.
Will this deal help Cogent Glass to access SGD market and vice versa?
Cogent and SGD will cooperate first in developing the Indian market for type 1 pharma glass and then jointly leverage opportunities for export.
How large is the Indian packaging market and out of three different type glass manufacturing which other area you are targeting to explore and why?
The Cogent plant is focused on the niche of type I glass, which is the highest quality glass for pharma, used specifically for products that need to be packaged in highly neutral glass.
Do they have plans to bring this global technology to India?
The cooperation agreement calls for a mutual exchange of technology in the moulded glass and tubing glass areas.
Is this development restricted to the Asia-Pacific market or is it for the global market?
There are no geographical restrictions in the agreement, though the primary focus will be the rapidly growing pharma market in India.
Cogent is a three-years old company and isn’t it too early to take such a bold step. Tell us why you chose this way to grow?
Cogent Glass has a world-class plant with some of the best glass-making technology in the world. It also has employees with a high level of technical competence. Making type 1 glass is a very complex operation with very high quality requirements and we believe that this plant will be the standard for manufacturing this type of glass, not only in India, but in the world.
Tell us about the shareholding pattern after the stakes owned by Oaktree capital?
At closing Oaktree became the majority share-holder of Cogent with approximately a 60 per cent share of the equity.
Will the employees of the Cogent Glass get affected by this deal?
No, there will be no change in the existing pattern.
Presently, how many people are associated with Cogent Glass, and are there any possibilities of increasing this headcount in the near future?
The Cogent head-count will continue to grow as the business ramps up. Recently, the company started up a world-class plant in Addakal, near Hyderabad to produce high quality moulded type I glass vials as well as tubular glass vials and ampoules for the pharma industry, and the plan is to fill up the capacity of this plant as quickly as possible and to expand capacity as the need arises.
Tell us the market potential of glass vials in the India and how much business have you captured in the Indian market?
The market for glass vials in India is growing at a double-digit rate. Cogent is just starting production but hopes to capture a significant share of this market.