Parke Davis In Bid To Sell Mumbai Formulations Unit Land For Rs

Pramod Lele, managing director, Parke Davis, said the company has not finalised any details for the sale, and said a final picture would emerge in a few weeks

Parke Davis, the Warner Lambert pharma subsidiary, is close to selling off its formulations unit at Saki Naka in Mumbai.

There are reports that the land is being sold for a consideration of Rs 89 crore. However, Pramod Lele, managing director, Parke Davis, denied such reports saying that they have not finalised any details for the sale, and that a final picture would emerge in a few weeks.

According to industry sources, proceeds are likely to be used for buying OTC brands from Knoll Pharma.

 

Parke Davis has two divisions -the consumer health products division for OTC products and pharmaceutical products division for ethical formulations.

An analyst at a leading research firm said the company has taken a strategic decision that around 20 to 30 per cent of its turnover should come from products acquired or introduced during the previous five years. Parke Davis is targetting to double its turnover of Rs 176 crore in three years.

The company had decided to sell off the Saki Naka unit, located on approximately 48,000 sq m of land, to save on overhead costs. The production plant will be shifted to the Hyderabad plant, and a part of the production will also be handed over to third parties. Formulations produced at the unit include the cough preparations, Benadryl and Caladryl.

When contacted, Lele said they are yet to decide on whether the plant will be sold as a going concern or if all employees will be asked to leave under a voluntary retirement scheme (VRS).

The sale had been blocked by the workers who obtained a stay from the Bombay High Court. At the company's AGM held earlier, Lele had said that the management was in negotiations for an out-of-court settlement with workers, and added that they would be offered the best terms for retirement. Although negotiations are currently on with the union, there are still some issues to be ironed out on both sides.

Union sources said that workers would decide on whether to stay on with the buyer or whether to accept the VRS depending on the terms being offered.