Dishman restructures struggling Swiss subsidiary

Dishman Pharmaceuticals & Chemicals Ltd, a contract research & manufacturing services company, has begun restructuring its Swiss subsidiary, Carbogen Amcis, which had dented the former’s top line in the third quarter.

While the current manpower strength at Carbogen has been cut by 20 per cent, the company will also have a new CEO joining from March 1. Confirming the development, Managing Director J R Vyas said, “We can take these people back once the contract research business picks up.”

He, however, declined to name the new CEO, saying he was currently working with another company in the sector. Post retrenchment, Carbogen has an employee strength of 375, Vyas said. The company has saved eight million Swiss francs as a result of the restructuring and expects this to boost its bottom line next year..
 

MEDI-PLAN

* Carbogen will now focus on high potency molecules

* Cuts manpower strength by 20%

* To get new CEO from March

Dishman reported subdued third quarter numbers, with net sales declining by 21.2 per cent to Rs 222.3 crore on account of the fall in sales of its Swiss subsidiary. The net sales of Carbogen Amcis fell by 27.5 per cent year-on-year (yoy), to Rs 81.8 crore. Its net profit for the quarter was Rs 33.1 crore, down 16.5 per cent, yoy.

The contract research business, that contributes to almost half the subsidiary’s revenue, is under pressure. Vyas explained: “Due to the global meltdown, small and medium-sized companies have cut down on basic research, and hence the contract research business of the subsidiary was hit. We will now focus on production of high potency molecules.”

The past 18 months has seen some significant changes in the markets Carbogen Amcis serves. While the company has seen a significant increase in the number and rate of progress associated with later phase projects, there has been a substantial decline in the number of early phase projects being generated, a release on its website said. “Carbogen Amcis has taken the opportunity to review the business and is making these changes to provide the foundation of a future-oriented business,” said Gaudenz von Capeller, managing director, adding: “In the last year, we’ve tried our best to keep all jobs intact. Thus far, due to decisions we’ve made, we’ve been able to weather the economy better than most in our industry. By making these changes, we believe that Carbogen Amcis continues to be a robust and profitable business and a key part of the Dishman group.”

Dishman inaugurated its active pharmaceutical ingredients (API) for the oncology facility at its Bavla plant near here, with an investment of $20 million (Rs 92 crore) recently. It will produce the high potency API products exclusively for Carbogen Amcis. The facility will produce 1,600 litres per annum of multi-tonne quantities of highly potent APIs.