Chennai-based Shasun Pharmaceuticals expects to start commercial production at its proposed plant in Vishakapatnam by June 2012.
The plant has been long in the making and “the delay was because we were trying to consolidate operations at our plants in Puducherry and Cuddalore,” said Mr Abhaya Kumar, Managing Director, Shasun. Last year, Shasun's Puducherry plant witnessed a strike, while the Cuddalore plant faced closure for some time due to chemical leak.
Plant plan
Shasun had in 2009 announced that it would set up the Vishakapatnam plant.
The total outlay on the unit , located in an export-oriented special economic zone , is around Rs 100 crore. The Vizag plant will have an initial production capacity of 1,200 tonnes of bulk drugs a year . It will manufacture generic APIs (active pharmaceutical ingredients), particularly for the Japanese market.
“The Japanese market is opening up in a big way. It is also the third-largest pharma consuming market globally,” said Mr Kumar.
Shasun has outlined capital expenditure of Rs 100 crore over the next two years. Around $6 million was raised through external commercial borrowings. The company also recently issued warrants worth Rs 15 crore.
Bar-coding
With the government directing drugs exporters to ensure bar-coding on external packaging within a week , Shasun said it was ready with the necessary technology. The company has engaged a firm to help train its people in bar coding and its usage.
Barcoding on packs will be carried out at Shasun's Puducherry facility. “Production costs will go up by a small percentage but capital costs are high – ranging from Rs 10 lakh to Rs 1 crore. It can be a pain for small companies,” said Mr Kumar.
The Shasun share fell 1.40 per cent on Monday to close at Rs 67 on the BSE.