The Rs 67 crore Bal Pharma in Karnataka is looking at Uttaranchal or Jammu & Kashmir as the location for its additional facility to manufacture products for the domestic market. The company, which was finalising its land at Baddi is having second thoughts as the Himachal town is already overcrowded. The final decision will be taken by early April.
The rush of drug units to Himachal Pradesh is creating a crowded landscape, which could lead to an unhealthy competitive environment detrimental to pharma industrial development. Bal Pharma, therefore, intends to keep away and opt for either Uttaranchal or Jammu & Kashmir which is offering attractive tax incentives. "Going by the economies of scale, we are toying with the idea to finalise the land at either Uttaranchal or J&K", Shailesh Siroya, managing director, Bal Pharma told Pharmabiz.com
Between the two free zones: Uttaranchal and Jammu & Kashmir, the latter's state government has an offer to refund both MODVAT and the excise duty. "We are now evaluating the fiscal benefits which could impact our sales growth before we finalise the location," he stated.
The company has set aside an investment of Rs 35 crore for two plants: Bangalore at Bommasandra for a bulk active US FDA compliant facility coming up on a 5 acre area and the other at any one of the free zone locations. At Uttaranchal, the company has already identified two plots one a 10 acre plot and the other a 5 acre location. The company will be purchasing only one plot for setting up its multipurpose formulation unit.
Meanwhile, the up and running companies at Baddi have offered Bal Pharma to manufacture their range of products to be produced at the free zone facility, until such time the plant is ready. “We are looking at the offer as it would help us to capitalise tax benefits till our own plant is commissioned," informed Siroya.
The new investments will see a massive recruitment drive where a total of 150 staff are being hired, out of which 75 personnel will comprise the skilled work force.
The proposed Rights Issue valued at Rs 11.45 crore which is slated for April 2005 is currently awaiting clearance from SEBI. The proceeds from the Issue will be utilised for setting up the new facilities at Bommasandra and one of the free zone locations.
In mid-March the company's research and development centre went through a customers audit for Gliclazide. In addition, three new products; two cardiology and one diabetology were also launched.