The state government has referred the only state-owned drugs manufacturing company, Kerala State Drug and Pharmaceuticals Limited (KSDP), to the Board of Industrial and Financial Reconstruction (BIFR) for its revival.
The assets of the company are valued at approximately `9 crore whereas its liabilities have skyrocketed to nearly `92 crore. Hence, the government referred the KSDP to the BIFR in May.
However, employees and trade union leaders have raised questions about the referral.
KSDP Employees Union (CITU) joint secretary K Rajendran said: “The company’s asset value, as calculated by the government, is `9 crore. The company owns about 14 acres of land along NH-47 at Kalavoor near Alappuzha town. The market rate of the land is about `6 lakh each cent. So the land value of the company is about `84 crore. A beta-lactam plant was established in the company at the cost of `6 crore last year. Another `6 crore was spent for the construction of a modernised laboratory to inspect medicines. An injection plant, built at a cost of `6 crore, is also nearing completion,” he said. The government move to refer the company to the BIFR is suspicious,” he said. The company has the capacity to produce 181 life-saving drugs worth about `100 crore.
Last fiscal, it had produced 38 varieties of drugs of nearly `40 crore. The company has about 100 permanent employees and about 50 casual and temporary staff.
The KSDP mainly produces antibiotics like ampicillin, amoxicillin and erythromycin, paracetamol, avil, ORS solution, turpentine, expectorant and other medicines. The company had recorded profit from 2009 to 2011. The Kerala State Medical Service Corporation (KSMSC) had placed order to the KSDP in these years.
Later, the KSMSC reduced its order and it caused losses to the company.
KSDP Managing Director K B Jayakumar said that the state government had suggested to refer the company to BIFR. At the board meeting I told government representatives that the company would make profit this year as the KSMSC had placed a `7.5-crore order. `3.75-crore order from other states were also received.
The orders are increasing day-by-day. The liability of the company was mainly due to non-payment of raw material prices. That occurred during 1995-2005. So the present management is not liable to the companies.
Former Finance Minister T M Thomas Issac MLA said there was no need to refer the KSDP to BIFR.