Sun Pharma to shut down Caraco's US plant

As a part of its strategy to consolidate its manufacturing activity in the US, Sun Pharmaceutical Industries Ltd has decided to close down the Detroit plant of its US subsidiary, Caraco Pharmaceutical Laboratories Ltd. Caraco's two facilities in Michigan and Detroit were under the US Food and Drug Administration (US FDA) scanner after violation of manufacturing norms. In 2009, the FDA had seized all drugs manufactured by Caraco at its Michigan facility for violations of manufacturing standards. In 2013, the US health regulator had raised concerns about manufacturing lapses at its Detroit plant.
 
However, in October, Sun Pharma had said that it addressed the US health regulator's concerns about manufacturing lapses at the plant and continued production.
 
In a press release on May 2, 2014, Sun Pharma stated, “It has notified the Workforce Development Agency for the State of Michigan regarding its decision to cease manufacturing operations and close the Detroit (Caraco Pharmaceutical) facility located at Elijah McCoy Detroit, Ml, USA. The company has provided the requisite advance written notice of the facility closure to the employee union and all affected employees.”
 
The release added, “The company has ensured that the impacted employees get compensated with more than their regular entitlement under the severance package. They will also receive other support services including outplacement assistance. The rest of the employees are continuing through mutually consented arrangements.”
 
Sun Pharma has undertaken necessary measures to ensure business continuity of the products being manufactured at this facility. The manufacturing of these products is being transferred to other units and all necessary steps have been taken to avoid market shortage. Sun Pharma expects a negligible impact of this development on its FY15 consolidated revenues.
 
For the year ending March 2013, Sun Pharma had registered an overall revenues of $2.1 billion, of which US contributed $1.1 billion.