Runwal offers VRS to 148 employees

The Runwal group has offered voluntary retirement scheme (VRS) to 148 employees at its pharmaceutical manufacturing facility at LBS Marg in Ghatkopar, central Mumbai.

According to informed sources, the company had to incur an outgo of about Rs 10 crore for this scheme.

The group's subsidiary, Ariane Orgachem Pvt Ltd, manufactures prednisolone formulation in this 23-acre facility.

Confirming the development, Subhash Runwal, chairman of the Runwal group, told Business Standard, "We have offered VRS to all employees working in the Ghatkopar facility. These were Wyeth India employees originally, who were absorbed by Runwal when we bought the plant last year. Our cost of production is escalating on account of their high salaries."

Sources said that Runwal is planning to convert the facility into a shopping mall. The demolition work has already begun in the plant. Runwal will continue production of prednisolone for another two months to take care of its earlier commitments.

Once these are met, the group will close down the facility, they added.

However, Runwal said that they had no plans of developing a shopping mall on the site.

The facility was bought by the Runwal group from Wyeth India in June 2004 for a consideration of Rs 48 crore. Wyeth used to manufacture steroids like prednisolone, metrogestrone, amoxapine, hydrocortisone and hydrocortisone acetate in the plant, which was closed down in April 2004.

The plant was then integrated with a Runwal group pharma subsidiary Ariane Orgachem Pvt Ltd.

After the acquisition, Runwal has been supplying prednisolone formulation to Wyeth India as per an agreement to supply 3,200 kg per year till 2006. It is learnt that in the first six months of its operation, Runwal has been able to supply only about 800 kg of prednisolone.

The Runwal group is known for its residential and commercial constructions across Mumbai and Pune.