The Kerala State Drugs and Pharmaceuticals Limited (KSDP), Aalappuzha, the only public sector Vitamin A manufacturer in the country, is understood to be in the process of shutting down its Vitamin A division by disposing off the machinery and trimming the workforce through VRS.
According to informed sources, the company has already sold off five big underground storage tanks worth over Rs.10 lakhs as scrap for a meager amount of Rs. 78.000, last week. The tanks kept at over 50 feet underground were dug out with earth removing equipments. Two of the tanks were highly sophisticated and had facility to store chemicals and ingredients at - 55 degree celsius.
Sources said the removal of tanks could affect the whole functioning of the company as tanks had links with various other underground sophisticated equipments of the formulation division. Sources also alleged the removal of tanks confirm reports on attempts to transfer the vitamin A manufacturing license and facilities to a few private player and ultimately close down the company. The RC Chowdhary Commission, which conducted a feasibility study on bailing out the company, had given a negative report on revival of vitamin A plant, said sources.
Meanwhile, the Kerala government has sanctioned Rs.10 crore to implement Voluntary Retirement Scheme (VRS) for the 420 odd employees. Majority of the employees have no other option other than to accept the not so attractive offer, said the sources. Their salaries were not paid for the last six months. The deadline for applying to accept the VRS package ended on 22nd of this month. About 50 employees of the defunct vitamin A plant, which had about 120 employees, had opted for deputation to work with the Kerala State Beverages Corporation's liquor retail outlets during September, this year.
Sources said the VRS was announced after a written report from technical experts within KSDP to the management stating that the plants were beyond redemption. Currently the company is working only for namesake. Two of the plants had been shutdown for sometime.
Sources say KSDPL, which was manufacturing 220 odd formulations besides Vitamin A, was not in a position to meet even the orders at hand, including three orders from outside the state. This includes Rs.1 crore from the health department of Andhra Pradesh government. Raw material sourcing has been fully dried up as bills worth several lakhs are pending to the suppliers. The telephone department has snapped all the telephone lines for not paying bills amounting to several lakhs due many months. Same is case of power bills. KSDP's total debts now stand at over Rs.48 crores, including the Rs.10 crore odd dues with interest to RIAB, which infused Rs.3.5 crore loan during 1997-98 to modernize the plants and machinery.
Some sources aver more than 90 per cent of the machinery were usable, and the company could be back on rails. KSDPL has assets to the tune of over Rs.100 crore in terms of machinery and 12 acre land located adjacent to the National Highway 47 at Kalavoor near Aalappuzha. If the government could further infuse another Rs.10 crore to pay off the immediate dues and by asking the State Health Department, which annually procures Rs.120 crore odd drugs, to place orders with KSDPL, the company could be saved from closure.
The United Democratic Front (UDF) sub-committee, which studied the possibilities of KSDPL revival, had recommended the management of the PSU should be transferred to the Kerala Health Department and dues could be converted as shares to save the company.
KSDP, once described as the pride of Kerala, was started in 1974 to supply cost effective life saving drugs to the state run hospitals and clinics. In 1983, KSDP commenced production and marketing of nutritional Grade Vitamin A from lemon grass oil as the basic raw material, either as Palmitate or as Acetate, designed to suit the various needs of pharmaceutical, Vanaspati manufacturing and for the fortification of various animal feeds and other food materials. The plant, started in technical collaboration with M/s.Hofmann-La-Roche, had an installed capacity to make 30 Mega Million Units (MMU) of vitamin A and 22 Metric Tonnes of Beta Ionone per annum. Then this was the largest of its kind capacity in the country.
Sources said KSDP had thought of selling vitamin A enriched milk, along with MILMA, the state milk supplier. Similarly, there were plans to introduce vitamin A mixed mineral water, and the Kerala Tourism Department and Railway had shown interest in sourcing the new mineral water. KSDP also had plans of starting a mineral water plant. About a year ago, there was a move to hand over the vitamin A plant to Indian Immunological lab, Hyderabad.
However, the plans of the company did not materialize as expected, mainly due to the lethargy of the bureaucracy coupled with mismanagement and indiscipline of the workers. Change of governments in the state resulted in shifting of management of the company from one to another, and on many occasions, landing in the hands of non-professionals.
The formulation division manufactures 60 tablets, including analgesics, antipyretics, vitamins, antibiotics, sulphas, anti TB Drugs, anti asthmatic, anti-allergic drugs etc, 15 vitamins and antibiotics in capsules, 30 large and small volume parenterals and steroids, 10 liquid orals, drugs like Kaylon (Chlorhexidine with Cetrimide solution which is one of the pioneer products manufactured in this area) etc.