Ranbaxy to invest $20 mn in Terapia

Drug major Ranbaxy Laboratories is investing more than $20 million (over Rs 83 crore) in its Romanian subsidiary, Terapia Ranbaxy. The move is a part of the company's strategy to make the subsidiary its hub for Europe and Commonwealth of Independent States countries.

"A significant portion of the investment is to enhance the manufacturing capabilities of Terapia's manufacturing plant in Romania, for reorganising and restructuring the company and to enhance research and development capabilities. We are in the process of making Terapia Ranbaxy as the strategic hub for our entire operations in Europe and CIS countries," said Ramesh Adige, executive director.

Terapia SA, an 86-year-old company, was acquired by Ranbaxy for $324 million (Rs 1,347 crore) in June, last year. The combined operations of Terapia and Ranbaxy established the largest Romanian generics company, with more than 1,200 employees, of which 350 form the largest professional field force in the Romanian pharmaceutical market. Terapia has a manufacturing plant in Romania and now Ranbaxy is in the process of upgrading this plant.

The Rs 6,069 crore Ranbaxy, saw a 4 per cent drop in growth in Europe last year, posting $194 million (Rs 896 crore) sales for the year ended December 31, 2006 owing to intense generic competition in the UK and healthcare reforms in Germany and France.

The rest of Europe, however, recorded 14 per cent rise in sales, at $61 million (Rs 253 crore) in 2006. This was mainly owing to strong performances in the markets of Spain, Italy and Poland. The company switched over the production facilities in France to India and is planning to sell off its Ireland manufacturing facility.

Terapia Ranbaxy has manufacturing and import authorisation as per European Union norms, entitling the company to batch test and release products manufactured outside the European Union. It is the first pharmaceutical company authorised to batch test and release products in Romania.

In November last year, Terapia Ranbaxy had added a new logistic centre in Otopeni near the Romanian capital Bucharest to increase the warehousing space for Terapia Ranbaxy products and for adding bonded customs warehousing services for products produced by Ranbaxy and imported from India.

Ranbaxy has invested about $10 million (over Rs 40 crore) last year in Therapia and was looking at a similar investment in Therapia in the post-acquisition period, a Romanian news paper Ziarul Financier had said yesterday quoting Peter Burema, president, Ranbaxy's global pharmaceutical division.