The Hindu Business Line : Ranbaxy shuts down ‘unviable’ Pune formulations plant

The company did not give details on how many people worked at the plant, nor has it said whether they have already been granted compensation or whether they would be absorbed at other facilities.

The plant makes formulations for the domestic market, and making finished dosage forms of medicines is people-intensive, said an industry-watcher familiar with the company.

Though he indicated that over 100 people could be employed at the plant, a Ranbaxy official indicated that “much less than 100 people” worked at the factory.

Though no reasons were given on why the plant was unviable, an industry representative said that companies are increasingly finding it difficult to keep factories running, especially when they have to compete price-wise with plants located at tax-free havens like Baddi (Himachal Pradesh) or Jammu and Kashmir.

Outsourcing

Ranbaxy’s plant in Pune is a relatively small one and possibly a legacy inherited from one of the early acquisitions, the industry representative said.

The decision to close the factory is most likely based on commercial considerations, as companies are finding it easier to outsource manufacturing to third parties, he added.

A Ranbaxy official added that the company had 10 local manufacturing facilities and twice the number globally.

“Products being made at the Pune plant could be made at other sites as well,” he added.

Ranbaxy’s stock was down marginally at Rs 353.30 on the BSE on Friday.

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