The Hindu Business Line : Unichem to set up SEZ in Madhya Pradesh

Mumbai, July 25 Unichem Laboratories Ltd is setting up a special economic zone (SEZ) at Pithampur, Madhya Pradesh, and is set to invest over Rs 50 crore in its first phase of its development.

The company has leased about 27.5 acres of the land notified by the M.P. Government for the purpose, Dr Prakash Mody, Unichem’s Chairman and Managing Director, told Business Line. The company has spent about Rs 10 crore on the land and another Rs 45 crore will be invested in the first phase of development, he said.

With an eye on exporting to the US and other developed markets, Unichem is setting up a formulations plant at the SEZ, to make finished dosage forms of medicine, he added.

Phase I

The company has two existing export-oriented facilities at Goa and Ghaziabad and the new facility would be to meet the upcoming requirements, he said. The first phase of development is expected to be in place in 18 months, he added.

“I subscribe to the view that it’s better to stick to your knitting,” he said, responding to critics who believe that drug-makers should stick to making medicines and not dabble with infrastructure. Unichem will look to largely utilise the new facility to meet its export needs, but having set up an expensive facility, the company would also look at third-party work, where it would manufacture on contract for another company, he indicated.

Performance

Unichem recently saw a dip in its net profit after tax at Rs 22.2 crore for the quarter ended June 30, 2007, as compared to Rs 25.2 crore in the corresponding period of the previous year, largely because of the appreciating rupee, he said.

The company is also looking to streamline its exports, he said. The company clocked sales of Rs 156.5 crore for the period under review, as compared to Rs 141.7 crore for the corresponding period in the previous year. Local performance helped, with domestic sales growing by 18 per cent, he said.

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