Financial Daily from THE HINDU group of publications
Thursday, Aug 04, 2005
Industry & Economy - Pharmaceuticals
Drug cos face daunting task of destroying damaged stocks
P.T. Jyothi Datta
Damaged medicine stocks in a warehouse at Bhiwandi, near Mumbai. Shashi Ashiwal
Bhiwandi , Aug. 3
THE damp watermark on the wall, indicating the level of flooding, is the common chord of woe connecting drug manufacturers who have their warehouses at Bhiwandi on Mumbai's outskirts.
Drug companies have not only lost medicines worth about Rs 1,000 crore due to flooding, but are also faced with the colossal task of destroying the ruined stocks.
Walk through the Arihant Compound and representatives of the different godowns, be it that of Novartis, Cipla, Ranbaxy, Pfizer, GlaxoSmithKline or Lupin, invariably point first to the half-drenched walls of the warehouses. All warehouses were under four to six feet or more of water, after last Tuesday's downpour.
Besides cleaning out the godowns, representatives are also making sure that rejected medicines do not make their way into a secondary market elsewhere. "Cipla has been working round the clock so that supplies are not disrupted in the city or elsewhere.
"We are taking utmost care to see that all the stocks destroyed by the rain are sent in phases for incineration," said Mr R. Kannan, a C&F (carry and forward) agent for Cipla.
Cipla has two warehouses at Bhiwandi, including a central warehouse at the New Arihant Compound.
The medicine stocks destroyed here could be worth more than Rs 200 crore, Mr Kannan said, adding that the company was in the process of assessing the damage.
The story is not too different for Pfizer, which also has two warehouses, including a central warehouse, at Bhiwandi.
The central warehouse supplies medicines to other parts of the country.
Medicine stocks worth roughly Rs 100 crore have been destroyed here, a Pfizer spokesperson said.
Ranbaxy too has a mother warehouse at Bhiwandi, supplying to Guwahati, Hyderabad, Kochi , Chennai, Nagpur and Pune, besides Maharashtra. "We have standard operating procedures to destroy stocks.
Nothing can be salvaged even if they were on the top of the rack, as they will not pass QC (quality control)," said a C&F agent for Ranbaxy.
He said the company was working on a plan to incinerate ineffective medicines at Ahmedabad.
According to him, medicines worth over Rs 30 crore have been destroyed at Bhiwandi alone. Medicine supplies were, however, being shored up from other regional warehouses in Indore, Delhi and Hyderabad, he said.
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