The Ahmedabad-based Paras Pharmaceuticals is setting up a joint venture with the New Jersey-headquartered Novartis Consumer Healthcare to handle exports of the former's over-the-counter products.

The venture, which will be floated soon in India, is also expected to bring Novartis' OTC products to India.

Girish Patel, chairman of Paras Pharma, said: "Our search for a joint venture partner since March last year ended with a formal tie-up with Novartis. This alliance will handle the exports of Paras' products. We will shortly set up a company for which the modalities are being worked out."

Patel denied to divulge details about the new company's financial structure, while Novartis officials could not be reached for comments.

Though Patel did not disclose whether all the existing brands of the company will be marketed by Novartis under the tie-up, sources said Novartis is mainly interested in Paras' top three brands -- Moov, Itchguard and Crack cream.

It may also show interest in marketing Paras' Livon hair oil and Borosoft, an antiseptic cream.

Novartis Consumer Healthcare had sold OTC products worth over $1.6 billion by the end of last year.

The company, which has been operating in India as Novartis India, is mainly into the pharmaceutical products along with some OTC products, which include its Calcium Sandoz tablets.

The consumer healthcare division of the company in India generates around nine per cent of its total revenue.

Last year, Paras Pharma had appointed Mehta Partners, a Vadodara-based consultant, to work out a business strategy for the company, which included the restructuring of its business.

Following this, Paras Pharma had received various proposals from pharmaceutical majors such as Pfizer. Its tie-up with Novartis is likely to put an end to speculation of Paras selling off the company or its brands.

The company, which has a distribution channel across the country, is known for its high ad-spent. In fiscal 2001-02, Paras spent around Rs 34 crore (Rs 340 million) on brand building, which was around 28 per cent of its sales.

The company had reported sales of Rs 190 crore (Rs 1.9 billion) by the end of last fiscal. It expects to post sales of Rs 200 crore (Rs 2 billion) by the end of this fiscal.

Paras generates most of its business from the Moov pain balm which is pegged at Rs 56 crore (Rs 560 million). Its Crack cream brand garnered around Rs 32 crore (Rs 320 million) sales in last fiscal.