If its proposal to acquire Agila Specialties for $1.6 billion through its India subsidiary is accepted, Mylan says it plans to increase domestic sales 12-fold by 2018, increase Agila’s capacity from 180 million units currently to 600 million units by 2017 and that it plans to become of the biggest local suppliers of injectables in the country.
Mylan’s DIPP submission also gives details of its sales in/from India and its overall investment plans in the country. According to Mylan, one of the world’s largest generics producers in the world, it has only two global R&D centres of excellence, one of which is in Hyderabad; of the seven global technology-focused development sites it has, one is in Bangalore. While Mylan’s sales in/from the country have risen 44% per annum over the last five years and investments 42% per annum, its workforce has risen four times.
Mylan India’s FY13 turnover was Rs 5,400 crore, up from Rs 749 crore in FY07; net foreign exchange earnings are up from Rs 256 crore in FY07 to Rs 2,838 crore in FY13.
Of this workforce of 9,700 persons, 1,100 are in the R&D set up, up from 330 in 2006 – while Mylan had just one R&D set up in India of 48,000 sq ft in 2006, it now has multiple facilities with over 180,000 sq ft of space dedicated to R&D. Mylan, which entered India in 2006 with its $736-million takeover of Matrix Laboratories, now has eight units making active pharmaceutical ingredients in India and two R&D plants in Hyderabad – another two sites are in the process of being acquired.
After coming into India, Mylan has invested Rs 3,800 crore in creating manufacturing facilities. This includes facilities to work on AIDS treatments – Mylan has won the biggest projects from the National AIDS Control Organisation and has brought down treatment costs from $10,000 per patient per year to $150 in the time it has been in India.
Mylan’s presentation comes after the Foreign Investment Promotion Board deferred its takeover proposal on various occasions with the DIPP raising objections to foreign firms taking over existing Indian units. The DIPP’s view is that this lowers production as foreign firms prefer to make the Indian firm focus on the exports market instead and, as a result, leads to higher prices. Of late, the DIPP has also argued that India is losing out on important verticals like vaccines. FE has shown the fears are exaggerated since production has not fallen in firms taken over by MNCs and prices haven’t risen much either. As for verticals like vaccines, the fall in production is more concentrated in public sector units, not in the private sector.