GlaxoSmithKline to invest Rs. 864 crore in India to set up pharma unit
GlaxoSmithKline ($GSK) expects increasing amounts of business from emerging markets, and so to get ahead of the curve in India, the company is planning to build a new £85 million ($136.5 million) plant there. CEO Andrew Witty made the announcement himself while in the country for a conference.
The company said that it is “proactively building capacity in the country” as it builds up its business in areas like gastroenterology and anti-inflammatory treatments. A site has yet to be picked for the new facility, but according to The Economic Times, Witty said Bangalore seems the likely location. The plant and warehouse are expected to be completed by 2017 and will employ about 250. It will be large enough to produce up to 8 billion tablets and 1 billion capsules a year.
In 2012, Glaxo derived about 25%, $11 billion, in revenue from emerging markets, and India is one of the most important. The company says it currently has 8,500 employees working there. Its business there has been hurt recently by a backlash to price controls the government instituted. It recently reported that bulk sellers in “major pockets” of India ceased buying its drugs on Sept.15, unhappy about the cuts they are having to take on their margins under the policy. In addition to its prescription drug business, GSK has also expanded its consumer health presence in the country. It upped its investment in its Indian consumer products affiliate last year to 75% from about 43%, an investment of about $940 million. The company pointed out today that Indians consume about 8 billion cups of its best known consumer product, the nutritional malt drink brand Horlicks, a year.
Global pharmaceutical major GlaxoSmithKline (GSK) on Thursday announced investment of Rs. 864 crore in India to set up a medicine manufacturing unit.
An 85 million-pounds (Rs. 864 crore) factory will be set up in India, creating 250 jobs as part of Glaxo’s continued commitment to ensuring access to medicines for people in the country, the company said in a release.
During a visit to India to take part in a conference of international business leaders, GSK chief executive Andrew Witty said the location of the new facility is yet to be finalized. He, however, said that the lead site will be in Bangalore.
“GSK is a long-standing investor in India and we fully support the Government in their efforts to increase access to affordable medicines and improve healthcare,” he said.
“This new facility will substantially increase the capacity of our manufacturing base and enable us to bring more medicines to the people of India.”
GSK will partner with local design and construction companies to build the state-of-the-art unit which is expected to benefit from leading edge technologies, Mr Witty said.
The drug maker is proactively building capacity in the country as it delivers its portfolio of products in areas such as gastroenterology and anti-inflammatory medicines.
When complete, the factory will make pharma products for the Indian market at a rate of up to eight billion tablets and one billion capsules a year, the release noted.
The facility, expected to be operational by 2017, will include a warehouse, site infrastructure and utilities to support the manufacturing and packing of medicines, it said.
Thursday’s announcement is GSK’s latest commitment to its manufacturing network in India where the company has invested Rs.1,017 crore over the last decade.
Around 8,500 people work in India for GSK, a leader in dermatology and vaccines. In addition, GSK’s consumer business continues to be a market leader with Horlicks being its most popular brand in the segment.
The company has five facilities in India – three for consumer healthcare products at Nabha, Sonepat and Rajahmundry, one each for vaccine packaging and pharmaceutical products in Nashik
