Booster dose for pharma units in Aurangabad

SEZ EFFECT: Majority of the players have now decided to stay put.

The proposed special economic zone (SEZ) for the pharma industry at Shendra near Aurangabad seems to be holding the industry from migrating to the hilly climes of Uttaranchal and Himachal Pradesh.

In 2003, when the National Democratic Alliance (NDA) government at the Centre announced 10 year tax holidays for investments in these states, several pharmaceutical units in Aurangabad were considering a shift to these states, lock, stock and barrel.

Even as late as last June, pharma units in the area were considering a move to Uttaranchal and Himachal Pradesh as local taxes such as octroi were strangling the small and medium units. The smaller units were afraid that with the larger units gone, the pharma ancillary units will lose their clients.

But the announcement of the Shendra pharma SEZ seems to have changed all that. The major units have all decided to stay put in the area.

Said joint treasurer of the Chamber of Marathwada Industries and Agriculture (CIMA), R K Vishwanathan, "Some of the units have started new operations in these states as HP and Uttaranchal are not only giving concessions on income tax but also on excise duty. But none of them have closed down their Aurangabad operations."

He added: "For many units the seven year tax holiday offered by the state government is yet to get over and shifting an entire unit is too cumbersome, something nobody wants to undertake unless they are left with no option."

Added Atra Pharmaceutical's' Managing Director Anil Save, "A few small and medium size companies have shifted or are in process of shifting to Himachal or Uttaranchal, but none of the major players are leaving Aurangabad."

"Those who had firmed up plans of moving away from here are also having second thoughts as the central government has already approved the Maharashtra Industrial Development Corporation's (MIDC) proposal to set up an exclusive special economic zone for pharma industry at Shendra," he said.

After the Waluj industrial estate of MIDC became operational in 1986, pharmaceutical giants like Johnson & Johnson shifted their manufacturing base to Aurangabad and nearly 100 large, small and medium units sprung around Aurangabad, employing around 20,000 people.

The pharma units here have been reporting a combined turnover of Rs 200 to Rs 250 crore.