Deadlock continues at Zydus' Moraiya plant

Company losing production on around 150 machines per day

As the tussle between a set of workers and management continues at Zydus Cadila's Moraiya plant in the outskirts of Ahmedabad, the facility is incurring a daily loss in production of around 150,000-190,000 tablets and capsules per machine.

Around 350 workers have not reported to work at the Moraiya plant since Thursday, demanding a re-instatement of terminated workers.

With two workers operating a machine, nearly 150 machines are not productive at the plant.

A worker at the plant informed on grounds of anonymity that a machine can churn out around 400 tablets/capsules per minute, and they work an eight-hour shift.

It is difficult to gauge the production loss in terms of value, but in terms of volume, around 150,000-190,000 tablets/capsule production is likely to be affected.

Analysts said that it is difficult to calculate the production loss in value terms, as different medicines are priced differently.

However, they estimate the production from Moraiya, which is a US Food and Drug Administration (USFDA) approved plant, to be in the range of $35-45 million during the 2013-14 fiscal.

"Zydus had exported around $275 million to the US market in FY13, and by the end of this fiscal it is expected to export around $310-320 million worth of drugs. The incremental revenues would come from the new approvals which are getting produced at Moraiya," explained a Mumbai based analyst.

Prafful Bohra of Nirmal Bang said that the Moraiya facility had received a warning letter from the USFDA which was revoked around July 2012. "After that, Zydus has received some product approvals in the US, not many, which are made at Moraiya.

The company is expected to resolve the labour issue soon and hence a significant impact on production is not expected," he said.

The company did not wish to comment on the matter.

The Moraiya facility has over 2,000 workers.

A worker at the plant claimed that with 350 operators not reporting to work, per machine at least 10 more people downstream (who pack medicines, among other things) are left with no work at the plant.

Earlier this week, around 350-360 workers had protested outside the factory gates and stayed away from work.

They were demanding a roll-back of the newly implemented system of commissioning one worker per machine instead of the earlier system of two workers per machine.

Most workers had joined work on Wednesday.

However, following the arrest of two workers and a termination of around 60 workers, around 350 workers decided to stay away from work from Thursday.

The company too had posted a notice outside the factory gates terming the workers' action as an illegal strike.

Workers, senior human resources managers held a meeting today afternoon, however, no resolution has been reached.

A worker present at the meeting informed, "The meeting went well, and in an amicable environment. The company is yet to take a decision on taking back the terminated workers, and a follow-up meeting has been scheduled for next Wednesday. We are hopeful that the issue would be solved soon."

The worker added that workers would not report to work until the sacked employees are re-instated.