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TN pharma cos migrated to Baddi shifting further to Sikkim to avail excise free benefits
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Peethaambaran Kunnathoor, Chennai
May 26 , 2016
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Since the excise duty exemption given to pharma sector in Himachal
Pradesh is set to expire in 2020, several of the companies migrated to
Baddi from Tamil Nadu are shifting their base to Sikkim with an
expectation that the industry can avail same benefits for the next ten
years there.
In addition to those moving from Baddi, many small
scale pharma units from Tamil Nadu and Pondicherry are also looking for
space in the north eastern state.
According to J Jayaseelan,
chairman of the Tamil Nadu chapter of Indian Drugs Manufacturers
Association (TN IDMA), 40 manufacturers from the state have started the
work of setting up manufacturing facilities in Sikkim, and a few in
Assam. He said companies from Tamil Nadu which are now operating in
Baddi in HP, including a subsidiary of his Delvin Pharma, will shift
their base to Sikkim where excise break covers the entire part rather
than special economic zones (SPZ) in HP and Uttarakhand.
B Prem
Kumar, managing director of Verax Life Sciences in Baddi and hailing
from Tamil Nadu, said he is now engaged in the process of shifting his
unit to Sikkim. According to him, the government of Sikkim provides all
infrastructure facilities for the migrant industrial units and giving
continuous support for bringing up the plant and other facilities. He
said in another two years’ time, Sikkim will become self-sufficient in
drugs manufacturing for the state’s complete requirement and also for
the need of the entire north-eastern states. Sikkim will become the hub
of pharma in the north-east. Several MNCs have already established their
plants in Sikkim.
Speaking to Pharmabiz from Baddi, he said the
Sikkim government is taking so many initiatives to focus on developing
new technologies in the areas of pharma production and healthcare. The
manufacturer hopes that the special packages given by the central
government for the north-eastern states, and the industrial and
investment promotion policy there will become beneficial for pharma
sector.
To a question, he pointed out that due to several
reasons, more than 25 companies migrated earlier to Baddi from Tamil
Nadu have now closed their operations. Out of this, some units have
found place in the north-eastern state. Remaining units have gone back
to Tamil Nadu. All units come under SME sector.
Finding space for
anxiety in future when the central government introduces GST, Prem
Kumar said, “We are investing huge amount in Sikkim availing bank loans.
But don’t know what will happen if the GST is implemented. Whether the
state government can provide duty exemption for another ten years or
not, is a question. If it is implemented, everywhere the prices will be
the same. The most sufferers are the small scale entrepreneurs”.
He
said even though the government provides all support in Sikkim, the
industry encounters two major problems, language and labour. As per
contract, 70 per cent of the total number of employees should be
recruited from Sikkim. But it is too difficult for the industry to
select suitable and efficient employees there. In Assam, the major
problem is bad climate. However, a few manufacturers from Pondicherry
and also from Tamil Nadu have taken land on lease and started work for
setting up units in Sikkim.
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