Usha Sharma – Mumbai
Mumbai-based Unichem Laboratories (Unichem) plans to use sale proceeds of its Madhya Pradesh (MP) formulation facility to expand existing facilities in other locations as well as set up a new manufacturing plant in Goa. Construction work on the new facility in Goa is likely to begin in the next two to three months.
The deal between US -based Mylan Laboratories and Unichem, worth Rs 160.50 crores, was recently cleared by the Competition Commission of India (CCI). At present, Unichem has seven manufacturing facilities in India; two for APIs and the remaining for fixed dose forms (FDFs).
Giving further details, Rakesh Parikh, Vice President – Finance, Unichem said, “As targeted early this year, we are in line with the schedule. Both companies have almost received all required approvals from their respective ends. Now, we are awaiting final approval from MP’s SEZ authority.”
Spelling out the management’s plans post the deal, he said,“We owe dues to the Income Tax Department, which we would like to pay off first. The rest will be spent on our existing API facilities and also to build up a new manufacturing facility in Goa. We also plan to expand our existing research and development (R&D) facility in Goa.”
Justifying the company’s decision to sell the MP formulation facility he said, “When we were allotted land from the MP SEZ authority in 2007, the core aim of this facility was to target the developed market. However, US registration used to then take 12-18 months; today this has been extended to 33 months. Secondly, the US authorities have since introduced generic user fees which amount to almost Rs one crore per individual facility. Finally, around two years back, the Finance Ministry exempted SEZ profit in maximum alternate tax.”
Giving Mylan’s takeway from the deal, Nina Devlin, Vice President, Global Communications Mylan said, “The (Mylan) facility has a capacity of approximately two billion tablets and capsules, providing Mylan with a meaningful expansion of its oral solid dosage (OSD) capacity in line with the company’s stated strategy to double its OSD manufacturing capacity over the next several years.”
Mylan has 11 manufacturing facilities of which eight facilities are used for the manufacture of Active Pharmaceutical Ingredients (API); two facilities for FDFs; and one facility for injectibles. The company also has two dedicated R&D facilities in India.
Unichem is present in over 30 countries, with more than 300 registrations filed for emerging as well as existing markets. “We have filed 28 ANDAs and plan to file one to two every quarter for the next two years. During 2013, we have touched revenues of Rs 1080 crores. We also target to do business in the US and other developed markets,“ added Parikh.