Sun Pharma slashing Ranbaxy's contract manufacturing unit
Division faces 50% haircut; execs given severance packages
- The head of contract manufacturing for Ranbaxy Labs and other mid-level executives in this division have been given severance packages as part of a restructuring that will cut the unit in half.
- In June 2014, Sun Pharma acquired Ranbaxy Labs in a $4 billion, all-stock deal.
- As the integration of the two companies continues, it has translated into numerous layoffs of Ranbaxy execs, including President and CFO Indrajit Banerjee and 17 other execs in June.
As part of the ongoing intergration process, Sun Pharma is planning to reduce the size of contract manufacturing operations by about half, and bring back all outsourced products to in-house facilities. Considering that almost 40% of Ranbaxy's products come from outsourced facilities, this involves a lot of layoffs, as well as operational shifting.
As of now, four of Sun's API products have already been moved to Ranbaxy's Toansa unit in India. However, these products are all sold outside of the US because the Toansa unit has been banned by the FDA. API manufacturing will also be moved to Sun's units in Ahmednagar and Panoli. The overall goal is to reduce redundancy, streamline operations and improve capacity utilization at Sun Pharma's plants.
- moneycontrol.com Sun Pharma redoing Ranbaxy contract mfg unit, to halve size