Ranbaxy Laboratories plans to expand its Mohali facility starting 2014, primarily to meet the increase in demand from the US market.
“We will look at adding another block at Mohali in 2014 as we have additional land there,” Ranbaxy’s CEO and Managing Director Arun Sawhney told Business Standard.
The drug maker’s existing SEZ (special economic zone) facility in Mohali manufactures oral solid products for export to the US, the European Union and other geographies. The facility is relatively new and received approval from the US regulatory authorities in October last year. However, it assumed significance in Ranbaxy’s operations as its approval had come as a major relief for the company facing long-drawn trouble in its largest market.
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After Ranbaxy’s three key Indian facilities at Paonta Sahib and Batamandi (both in Himachal Pradesh) along with Dewas (in Madhya Pradesh) came under import alert of the US Food and Drug Administration (US FDA) in 2008, the company had to shift production of many of its products to its facility in the US — Ohm Laboratories. “This obviously created capacity constraint for the company. Mohali plant approval again provided Ranbaxy a low-cost India-based manufacturing source to supply formulations to the US,” said an analyst.
Earlier this year, Ranbaxy started shifting production of its generic version of the world’s bestselling drug Lipitor from the US to its manufacturing facility in Mohali.
The company has also been filing various applications to launch generic versions of blockbuster drugs from its local plant, said Sawhney. The Ranbaxy management recently indicated that more approvals would be coming through from the Mohali facility because various “regulatory submissions in the recent times have gone from Mohali”. The expansion of the facility would enable the company to launch more products from there.
According to an IDFC report, the FDA-settlement along with the Mohali facility will enable Ranbaxy to rebound and work towards increasing its market share on existing products, too.
According to Sawhney, the company now aims to be focused on execution of its global strategy and the thrust will be to build upon strengths in marketing, manufacturing and research, additionally supported by a unique hybrid business model with its parent Daiichi Sankyo.
The company has already started planning expansion in the US. According to the company’s annual report, during 2011, it filed nine applications with the US FDA seeking marketing approval for generic drugs. It also expanded its capacity at Ohm labs.
Shares of Ranbaxy ended at Rs 498.35 on the Bombay Stock Exchange on Friday, 0.29 per cent down from their previous close of Rs 499.8.
