The Karnataka government has allotted 50 acres of land to GlaxoSmithKline (GSK) which plans to set up a formulation development unit, investing Rs.994 crore. The government has also acquired 3,232 acres of land at Yadgir for the setting of a Pharma Park.

The Karnataka Industrial Area Development Board (KIADB) cleared the formalities of land for GSK and the Karnataka Udyog Mitra (KUM) facilitated the investment for the UK drug multinational. For the Pharma Park, KIADB will now develop the land before it is handed over to KUM which is the single contact point for all investors who are looking at setting up units in Karnataka.

The GSK’s 50 acres of land is located at the Vemgal Industrial Area in Kolar to manufacture tablets and capsules. The facility is expected to generate jobs for 232 personnel. The manufacturing activity will need 2,600 KVA power.

In November 2013, Andrew Witty, chief executive officer, GSK who was in India stated the plans to increase its presence in India where it would invest Rs.864 crore for a facility and lead site would be Bengaluru. The unit is to be operational in 2017 and would have a production capacity of eight billion tablets and one billion capsules annually.

“Our role is to facilitate investments and execute initiatives to enable a smooth transition, from receiving an investment proposal to the eventual implementation of the project. We have now in principle cleared the GSK project which is a formulation unit, KA Jayananda, managing director, Karnataka Udyog Mitra told Pharmabiz.

GSK had indicated to the state government that the new plant would be engaged formulation of tablets and capsules besides packaging of the final product. “We have been working to ensure that all hurdles of land allotment were cleared and the 50 acres is leased for a period of 99 years,” added Jayananda.

In July this year, Karnataka government terminated the process of land allotment to industries on absolute basis and opted for long-term lease to 99 years from the existing 30 years primarily to attract investors.

“In the case of GSK too, they were attracted to the 99 years lease even though there were no tax sops offered to invest in the state, said the KUM managing director.

According to industry the big advantage for companies looking to invest in Karnataka with the 99 year lease period is that it would be far more economical than purchase of industrial property. The companies could utilise the financial resources judiciously as working capital and other expenditure.

With regards to the Pharma Park, KUM is now gearing up to ensure that it would be aggressive in their effort once they receive an investment proposal from prospective drug manufacturing companies and provide all support for the implementation of the project. Yadgir in north Karnataka is the 30th district created by the state government on April 10, 2010.

Karnataka has 240 pharmaceutical companies with the largest production base in Bengaluru followed by Mysore, Raichur, Hubli, Belgaum and Dharwad. A dedicated Pharma Park could solve issues of effluent treatment, power and water supply besides connectivity, noted KDPMA members.