Mitsui & Co. Ltd ("Mitsui") (Head Office : Tokyo, Japan, President and CEO: Masami Iijima) has today entered into an agreement with a pharmaceutical chemical intermediate / Active Pharmaceutical Ingredients ("API") manufacturer in India, namely Arch Pharmalabs Ltd ("Arch") (Head Office: Mumbai, India), to acquire newly subscribed shares of approximately 5% of the company at around 637Million INR (approximately 13Mil USD). Today's agreement with Arch makes Mitsui one of the first Japanese conglomerates to take a stake in an Indian CMO* (Contract Manufacturing Organization) in the industry.

This is the second investment of Medical & Healthcare Division,Tokyo in the Mitsui Asia Pacific region, with the first being M/s Gleneagles Clincal Research Centre( where mitsui took 49% stake of the company ) based in singapore executed  in March 2010.

Mitsui and Arch have been in business relationship since 2005 and have had many successful business projects to cater to the high outsourcing demand of pharmaceutical intermediates by the stringent innovator japanese pharma companies.

With this investment  we succeed in creating  a platform to migrate to the next level of our pharma business in terms of contract research ,contract manufacturing of intermediates and drugs for serving the global markets besides getting exclusive rights of business activities of Arch Pharma for Japan market ( which is the second largest market in world to the tune of USD85 billion  after the United States).

Arch is a chemical intermediate and API manufacturer in India with a head office in Mumbai and possesses factories across the country. Arch has a diverse range of technology and is currently supplying its products to numerous leading multinational pharmaceutical companies based in the US, Europe and the Middle East, for drugs related to hypertension, hyperlipidemia, antibiotics and cancer amongst others.

Mitsui, with over 40 years of experience of business in this field, has been a solution provider to pharmaceutical companies with services ranging from supplying raw materials, chemical intermediates and APIs to supporting management of manufacturing as well as providing logistics service to pharmaceutical companies. Through this investment, Mitsui intends to strengthen the CMO business platform. Further this investment further illustrates Mitsui's recognition of India as having a huge potential for manufacturing pharmaceutical chemical intermediates and APIs and the growing market demand in the Asia Pacific region.

The pharmaceutical industry as a whole is facing a "patent cliff" problem in the year 2010** where many of the so called "blockbuster drugs*" lose patent protection and are expected to encounter strong competition from generic products. Under the circumstances, many multinational companies are already moving into India and recognizing India as a global factory for the pharmaceutical industry with competitive technology and pricing, Mitsui, through this investment into Arch, hopes to take a further role to make a contribution to the industry and humanity by supplying key raw materials both in the Asia Pacific region and the world.

*CMO business - is where pharmaceutical companies outsource the manufacturing function to an external company. Such outsourcing will result in cost-savings for the pharmaceutical company and allow the resources to be allocated to the core R&D activities.

**"patent cliff" problem in the year 2010 - "patent cliff" problem in the year 2010** where many of the so called "blockbuster drugs" which are generally defined as products with a total revenue over USD 1bn worldwide, will lose patent protection and are expected to encounter strong competition from generic products. This phenomenon will put a large pressure on the profitability of the pharmaceutical companies.