Thursday, January 24, 2008

Krebs Biochemicals - Outcome Of Board Meeting

Krebs Biochemicals & Industries Ltd has informed that the BoardJustify Full of Directors of the Company at its meeting held on January 22, 2008, has approved the manufacturing contract of the Company with M/s. Wacker Chemie AG of Munich, Federal Republic of Germany.

The agreement is for manufacture of L-Cystine for Wacker with technology supplied by the party. Krebs has to establish and reserve production capacity to produce at least 700 tons of the product per year. The microbial strain and technology necessary for the manufacture will be supplied by M/s. Wacker. The unit is to be established, within the premises of the Company in Unit II at Kothapalli village in Visakhapatnam district of Andhra Pradesh.

Cost of the equipment required for the purpose will be initially financed by Wacker to be recovered in phases from payments to the Company. The product has to be manufactured to meet the quality standards specified by Wacker.

In addition to the contract for manufacture of L-Cystine, M/s. Wacker Chemie have also entered into a Memorandum of Understanding with Krebs for establishing a joint venture unit for manufacture of various products. It is agreed that M/s. Wacker will have 51% interest in the joint venture and Krebs shall have the remaining 49%. The time for establishing the venture is not yet decided. The other details regarding the organization of the joint venture will be decided later.

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