Parke Davis Shuts Saki Naka Unit After Prolonged Parleys

After almost six-months of negotiations with its union, Parke Davis (India) Ltd has finally managed to close shop at its formulations plant at Saki Naka in Mumbai.

Parke Davis is in talks with several pharma majors to sell the Saki Naka plant spread over a 12 acres land. However, the proceeds from sale of this unit are not likely to be distributed as dividend but instead ploughed back to acquire new brands and in equipment that would be leased to Warner Lambert (India) Ltd. Besides it will also meet the VRS costs . When contacted Pramod Lele, managing director, refused to comment on any of the issues.

Sources close to the company claim that the production will be shifted to the existing facility in Hyderabad. They do not rule out possibility of using the new facility of Warner Lambert's 100 per cent subsidiary in Bangalore.

Furthermore, Parke Davis is also planning to source its requirement from third parties. Currently, around one-third of formulations are being routed through third parties.

The pharmaceutical company had decided to close down the plant as labour costs and other overheads were very high.

However, the Bhai Jagtap led union succeeded in obtaining a stay on the closure and over the past few months, the management was engaged in hectic negotiations for an out-of-court settlement with the workers. Of the 293 workers, 292 have accepted the VRS (voluntary retirement scheme) offered by the management. Parke Davis has offered 107 months salary to workers who served for more than five years and up to 90 months of salary to those who have served less than five years.

The VRS was offered on October 9 and closed on October 29. A union official said "The VRS offered by the company was so good that all employees accepted the scheme. S R Sawant, secretary of the union, is the only permanent employee not to have accepted VRS.

Parke Davis had earlier spent close to Rs 12.5 crore on retrenchment of 312 employees in 1996. However, this scheme had been for field and administrative staff and worker had not been retrenched at that time.