Pharma major Dr Reddy's Laboratories has requested the government to denotify its Special Economic Zone (SEZ) at Medak in Andhra Pradesh, said a top company official.
The formulations unit, which was to come up at Medak, will now be moved to Visakhapatnam where the company has another SEZ for manufacturing Active Pharmaceutical Ingredients (APIs).
"We have requested for denotification of entire SEZ (in Medak). We are locating both our SEZs close together (at Visakhapatnam). Having an API unit at one place and formulation unit at another place complicates the whole matter," Dr Reddy's Laboratories (DRL) Chief Financial Officer Umang Vohra told PTI.
DRL, he said, has given an undertaking to the Commerce Ministry for refunding the duty benefits availed of in the name of SEZ and the Development Commissioner of VSEZ has recommended the proposal.
It is expected to come up for consideration at the Board of Approvals meeting scheduled on November 28.
Vohra said DRL is setting up the formulations SEZ in Vizag for better synergies of management and material flows.
"Land was bought by us (in Medak) and will remain with us. We (have now) decided to put both the units at one place," he said.
DRL had acquired around 103 hectares at Melasangam and Lingampally villages in Medak to set up a tablets and capsules manufacturing unit for exports. In Vizag, it had acquired around 260 acres for the bulk drugs SEZ, which will now house the formulation SEZ as well.
The company is expected invest around $200 million in both the SEZs, a company official had said earlier.
Vohra said the SEZ land, after denotification, will be used for other expansion plans.
"Every two years or three years we require capacity addition. We can think of that in future. Later on when we wanted to do something with this land, we will go for two plants (API and Formulations) together," he explained.
