The Hindu Business Line : Sun Pharma shelves plans for Hind Antibiotics merger

EARLY indications that the country's first public sector drug manufacturing company, Hindustan Antibiotics Ltd, would be dropped from the sell-off list by the current Government came about two months ago, when Union Chemicals and Fertiliser Minister, Mr Ram Vilas Paswan, said so in as many words.

But Hindustan Antibiotics' prospective suitor, Sun Pharmaceuticals Industries Ltd, put a lid on the issue by stating that the proposal to merge Pune-based Hindustan Antibiotics with Mumbai-based Sun Pharma "is not being pursued now."

The statement came after Sun Pharma's board-meeting here.

Trade union sources expressed their happiness regarding the development and added that "merger-managers" should draw-up plans keeping in mind the interests of employees as well.

The ailing company largely produced penicillin and antibiotics and currently has about 1,700 employees, Mr Madan Phadnis, Vice-President, Hindustan Antibiotics Mazdoor Sangh (HAMS), told Business Line.

Hindustan Antibiotics had fallen into the Board for Industrial & Financial Reconstruction (BIFR) net in 1997, "but the company had not stopped production even then," says Mr Phadnis.

Elaborating on how employees expect the revival of Hindustan Antibiotics to happen now, he said: "The Government should infuse the funds and this should go towards new processes and technology and better penicillin. There are employees who do not want to continue working with the company and they can be voluntarily retired and these posts can be kept vacant till the company stands on its feet. Productivity can be improved through such measures.

Also, there is land that belongs to Hindustan Antibiotics that can be sold out or leased out to bring in financial resources."

According to an earlier statement made by Mr Paswan, Hindustan Antibiotics would require an infusion of about Rs 70 crore to turn it around. Besides, the company has about Rs 40 crore worth of land, he had said.

Industry watchers put the estimated rehabilitation costs for Hindustan Antibiotics between Rs 150 crore and Rs 250 crore.

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