Ranbaxy to set up drug making unit

Daiichi Sankyo’s first project after the takeover to be set up at Baddi in 6 months.

Indicating that the ownership change has not altered the growth plans of Ranbaxy, the country’s largest drug maker has secured an approval from the Himachal Pradesh government to build a new drug manufacturing facility in Baddi.

The new facility, meant to augment Ranbaxy’s production capacity to serve domestic business, is to come up before March 2010. This is the first new manufacturing project since Japan’s Daiichi Sankyo became its major shareholder last year. Company sources declined to provide details of the project but said it is “well on track to qualify for tax benefits”. The estimated cost of the project is known to be around Rs 40 crore.

While the Baddi project is to augment domestic supplies, Ranbaxy’s Mohali pharma SEZ project, also in the process of execution, is meant for exports. “Our SEZ Greenfield project at Mohali is progressing as per schedule and will augment our already significant manufacturing capability when complete. The product and volume plan would be to try and maximize financial benefit”, a company official said.

Ranbaxy’s domestic drug manufacturing facilities are located at Dewas (Madhya Pradesh), Paonta Sahib (Himachal Pradesh), New Delhi, Jejuri (Maharashtra), Goa, and Mohali and Toansa (Punjab). The Paonta Sahib and Dewas facilities are under the regulatory scrutiny of the United States Food and Drugs Administration and products from these facilities are not allowed to be marketed in the United States. The company is in the process of complying with US regulations and hopes to resolve the problem soon.

India’s growing medicine market is being seen as a major future growth driver by foreign multinational firms. It was one of the triggers for the Ranbaxy acquisition.

The quarterly results of Daiichi, announced in Tokyo today, indicate that Ranbaxy revenues, from both domestic as well as international business, contributed 29.6 billion Yen (Rs 1,487.65 crore). Daiichi has stated that its quarterly revenues from regions including India (excluding major markets like the US, Europe, Japan) saw a 318.7 per cent jump on a year on year basis.