Piramal Healthcare plans to shut its manufacturing unit in Huddersfield in the United Kindom. The facility generated revenue of 19 million pounds (Rs 135 crore) in FY’09.
Company has currently 3 facilities in the UK. The facilities other than Huddersfield are Morpeth & Grangemouth. Both sites will continue to provide services from European geography. Pharma Solutions expect significant growth from both sites in next 2-3 years.
The company would record Rs 71 crore as a one time expenses in the quarter ended March’2009 for this purpose, which consists of Redundancy payments, Pension top ups, Contract termination costs and other costs.
This facility provided services to 4 key customers and all the customers have agreed to change. Piramal will transfer these businesses to Morpeth plant (UK) and Ennore plant (India).
Due to consolidation, company projects 5% degrowth in its Pharma solution business for FY’10 and 6%-8% raise in the EBIDTA margins. Pharma solution business contributed 31% to total sales for the nine months ended December’08.
The company would conduct early phase studies in Intermediates & API at Ennore facility, formulation development at Ahmedabad facility and clinical trial packaging capability at Morpeth facility.
The company has already renewed one manufacturing contract and other contracts are close to finalization.
Company expects 15% growth in CMO business from assets in India.