Mumbai, Aug 4: The Rs 269-crore Ipca Laboratories is evaluating the feasibility of continuing manufacturing operations at its plants in Mumbai and Sidhpur in Gujarat as part of an attempt to "optimise the cost efficiency" of its multi-locational facilities. Ipca is one of the largest manufacturers of bulk drugs like chloroquine phosphate, atenolol and pyrantel pamoate and its intermediates.

Company sources said that the Kandivli plant in Mumbai, an old unit, offered no scope for further expansion due to its locational disadvantages. The unit essentially manufactures formulations.

"The company is examining the option of closing down the unit due to various limitations. A final decision, though, is yet to be made. We are in the process of offering a voluntary retirement scheme to the workers," they said. Moreover, Ipca's state-of-the-art plants at Athal in Silvassa and Kandla in Gujarat are built to meet the US FDA and British MCA standards.

The Athal unit, which manufactures liquid, injectables and tablets, is expected to be the company's main manufacturing facility in future. The Kandla unit makes capsules, tablets and dry syrups.

Sources said the Sidhpur unit, which mainly manufactures psyllium husk, had been affected after it could no longer cater to Procter & Gamble's requirements. "Though we are breaking even at Sidhpur, it's more of a seasonal business and we employ contractual labour there," they said.Procter & Gamble has already compensated Ipca following its decision to source psyllium husk from elsewhere. Ipca's installed capacity for psyllium husk as on March 31, 1997, is 1,500 tonnes, while actual production during 1996-97 was 854 tonnes.

Though the exact details could not be ascertained, it is understood that around 40 per cent of the total cost involved in operationalising the Sidhpur unit had been paid as compensation. The unit had been acquired by Ipca for a consideration of about Rs 4 crore.

Ipca is moving an enabling resolution at its forthcoming annual general meeting empowering its board to sell, transfer, mortgage or otherwise dispose of (including giving on lease or leave and licence) any of the company's undertakings.

The move, Ipca says, will facilitate the re-organisation of the company's manufacturing activities and optimise the cost efficiency.

The company is also moving a resolution proposing to increase its authorised share capital to Rs 65 crore from Rs 25 crore "by creation of redeemable preference shares of Rs 40 crore". The increased authorised capital will allow the company to issue further equity/preference shares as and when necessary to meet its future financial requirements.

Other resolutions being moved include a buyback of shares and allowing FIIs/NRIs/OCbs etc to purchase up to 30 per cent of the company's paid-up equity share capital.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.