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New projects of pharmaceutical industry.

New Projects of Pharmaceutical Industry

Several proposals have been cleared by IPB for the manufacture of pharmaceuticals in the country. It will be recalled that the pharmaceutical industry was placed in the Restricted List as it was based on imported raw materials. This industry was again placed in the Specified List under the rules announced in the 1984 Industrial Policy Statement. The inclusion of Pharmaceutical industry in the Specified List was due to two reasons. First, it was almost entirely based on imported raw materials, and secondly the prices of pharmaceutical products were subject to control and regulation by the Ministry of Health.


Medipak, a 95 million rupees project, went into production on April 12, 1987. This was launched with financial backing of Pakistan Kuwait Investment Company and technical knowhow from Fresenius of West Germany. The plant will manufacture 4 million bottles of IV Solutions and ten million infusion giving sets every year. These extremely vital life saving intravenous solutions were presently being imported from abroad because their production facilities were not available in Pakistan.

About 25 per cent shares of this new medical production line are held by Pakistan-Kuwait Investment while sponsors had provided ten million rupees under non-repatriable foreign exchange scheme introduced by the present government. It was for the first time that such a high amount was made available by a single Pakistani individual in this scheme. Medipak is the largest single investment at one time in a pharmaceutical industry and the first ever project in the country to produce infusion giving sets.

Otsuka Pakistan Limited

Located at Hub Industrial Estate Area, the company was incorporated as a public limited company at Karachi in February, 1988 with the object to manufacture intravenous infusions and pharmaceutical preparations in Pakistan. The company is a joint venture between Otsuka Pharmaceutical Co. Ltd. Japan and Hospital Supply Corporation of Pakistan which was approved by the Government of Pakistan in December, 1987.

Otsuka Pharmaceutical Company Limited Japan is one of the biggest three pharmaceutical Companies in Japan and the core of the Otsuka Group which comprises 34 companies both in Japan and overseas. Otsuka Group has been supplying pharmaceuticals including Intravenous Solution, other healthcare related products or services, beverages, chemicals, foodstuffs, interior and exterior furnishings. Manufacture of Intravenous Infusions which will be the main activity of Otsuka Pakistan initially has been conducted by Otsuka Pharmaceutical Factory Inc., Japan, P.T. Otsuka Indonesia and other 4 overseas companies of Otsuka Group. Hospital Supply Corporation, owned and run by a well renowned business group of Pakistan, has been supplying such life saving drugs in Pakistan for last two decades.

The project is a semi-automatic pharmaceutical plant with an installed capacity of 6 million bottles of 500ml. and 1000ml. Intravenous Solutions working on a single shift basis. The plant and machinery for the project costing Rs. 43.08 million in foreign exchange has been imported from Japan, Singapore, Italy and Indonesia. In addition, plant and machinery comprising five Tube Boiler, Air Steel Tank, Steel Fabrications have been procured locally at a cost of Rs. 19.12 million. The machinery incorporates the latest technology in the area of semi-automatic manufacture of Intravenous Infusions. The company has technical collaboration agreement with Otsuka Factory, Inc. Japan. The company has started commercial production in June, 1989.

Medicines introduced into the body by intravenous route bring about faster healing and recovery to the human body. Intravenous Solution has increased tremendously in the last 2 decades throughout the world. Otsuka Japan is recognized as pioneer in the development and research of Intravenous Dextrose range of products. The total demand of the country of Intravenous Solution is about 22 million bottles (1988) and is expected to grow at the rate of 10 per cent per annum.

A.Z. Pharmaceutical Co. Ltd. (Hyd.)

This company has been allowed to establish a new industrial under-taking at Nooriabad, Distt: Dadu, Sindh for the manufacture of Intravenous Solutions in technical collaboration with Pharma-Plan of West Germany at a total project cost of Rs. 128.410 million including foreign exchange component of Rs. 66.630 million. The approval was given, subject to reduction of technical knowhow fee to a maximum of 3 per cent on the exfactory sale of the products less duties and taxes.

Leonine Pharmaceutical Industries (Pvt.) Limited

This company has proposed to establish an industrial under-taking at Multan Road, Lahore for the manufacture of Aluminium Hydroxide Gel B.P., Formulations based on Aluminium Hydroxide gel., Anti-biotics & Antiseptic ointments at a total project cost of Rs. 9.997 million including a foreign exchange component of Rs. 1.344 million for imported plant and machinery.

Acepharm Laboratories (Pakistan) Limited

This company, submitted a proposal for the manufacture of pharmaceuticals. The proposal was rejected by CIPC. It was pointed out that the sponsors should raise the equity contribution to at least 30 per cent. The debt equity ratio of the project should be improved to 60:40. It was also pointed out that repatriation of profits and dividends on the foreign equity should not be allowed. Moreover, the entire range of products proposed to be manufactured was available in the country and there was no further demand for these products. The project may be resubmitted for approval.

Evron (Private) Limited - Lahore

This unit is to be established for the manufacture of pharmaceutical in technical collaboration with foreign pharmaceutical firm. The total cost of the project was estimated at Rs. 62.0 million including foreign exchange component of Rs. 50.0 million for procurement of plant and machinery. Technical fee to be paid not to exceed more than 3 per cent.

Pliva Pakistan (Pvt.) Limited

The manufacturing plant of Pliva Pakistan (Pvt) Limited, a joint venture between Yugoslavia and Pakistan in the pharmaceutical field was inaugurated at the Hub Industrial Estate in the Lasbela district of Balochistan in 1989. It will manufacture tablets, capsules, dry syrup, liquids, ointments and injectables. Pliva of Yugoslavia also plans to embark on an ambitious programme for basic manufacture of raw materials in Pakistan for producing a number of mostly demanded medicines, ampicillin, oxytetracycline, sulphonamides, vitamins B and C. The joint venture was a major one in the field of pharmaceutical manufacturing between the two countries.

Upjohn Pharmaceutical (Pvt.) Limited

This joint venture, between the Habibullah Group of Companies and Upjohn of United States, is estimated to cost over Rs. 80 million, including Rs. 30.94 million in foreign exchange required to finance the import of plant and machinery and payment of technical fees to foreign participants. The project will be based entirely on imported raw materials and semi-finished ingredients.

Nenser Pharmaceutical (Pvt.) Limited

This project planned to establish facilities to manufacture Intravenous Dextrose Solution. The plant, with a capacity of 4 million bottles/bags of I.V. Solution per annum is proposed to be established in the Industrial Estate, Chunian District Kasur Punjab. It may be mentioned that pharmaceutical industry has been recently deregulated and as such no project in this category would henceforth be required to obtain sanction or prior permission from the sanctioning authorities except the formality to get the approval of terms and conditions of foreign collaboration and direct loans from abroad.

The sponsors of the project are reported to have arranged the import of plant and machinery from Italy. The machinery suppliers would also extend technical knowhow and training facilities to Pakistani personnel without charging any fee but they will be paid a fee in lump sum for providing engineering design and for their assistance in erection, installation and commissioning of the plant. This fee is required to conform to the limits prescribed in the Industrial Policy guidelines.

The total cost of the project has been estimated at Rs. 74.159 million including the foreign exchange component of Rs. 37.409 million which along with a local currency of Rs. 4.725 million, is proposed to be obtained from one of the local financing agencies. Of the total cost, the initial paid-up capital of Rs. 29.664 million would be subscribed partly by the sponsors and partly by financial institutions pending public issue of shares after two years of going into operation.

Mediglass Limited

Located at Kot Lakhpat, Lahore, the company was incorporated as a public limited company on September 8, 1985 at Lahore with the objects to carry on business as manufactures, traders, importers and exporters of specialized glass containers used in pharmaceutical industry. The principal activity of the company is to manufacture ampoules, vials, test tubes and prefilled disposable syringes and all other kinds of specialized glass containers used in pharmaceutical industry to preserve and to contain: (a) liquid and powder injectables; (b) tablets and capsules; (c) eye and nasal drops; and (d) infusion and syrups. The project is equipped with brand new, fully automatic high-tech, high-speed, high technology pharmaceutical glass container manufacturing and processing machines manufactured by Ambeg Germany, Ariste Italy, Pharma Glass Austria and Modern Machanique France, Oxygen generating plant manufactured by Air Sep USA and Air compressors manufactured by Atlas Copco Belgium. It also includes Diesel generator and a modern workshop equipped with all required facilities. The plant has the capacity to manufacture 1 million containers per day of various sizes, types and colours. The project has commenced commercial operations from July 1, 1989.

Mediglass Ltd. has signed contracts for joint venture for the manufacture of tubular and moulded pharmaceutical glassware with Omnipex Austria and Intecream, Poland. It was also extended into a counter-trade agreement with Golden Time, Austria for export of 40 per cent of it's moulded, tubular pharmaceutical glassware. Furthermore, it has signed agreements with Poland, Iran and Bangladesh for export of their pharmaceutical glassware.

Pharmagen Beximco Limited

99-Beaufort Building I.I. Chundrigar Road, Karachi. This plant is being set up at Kahuta to produce ampicillin and amoxycillin in different forms. The plant estimated to cost Rs. 207.23 million is said to be most modern in the country. PICIC has approved financial assistance amounting to Rs. 107.80 million, which includes Rs. 98 million in foreign currency and Rs. 9.80 million in local currency for the project.

The ampicillin and amoxycillin both are broad spectrum without standing antibacterial activities. Ampicillin and amoxycillin are the derivatives of the basic pencillin nucleus and are used for a large number of infectious diseases. The proposed project would be capable of producing 140 tonnes of ampicillin and 60 tonnes of amoxycillin per annum based on two shifts operation and working for 240 days a year. The formations unit would operate on single shift basis and would manufacture four different dosage forms namely Liquid Tablets, Capsule and Ointment/Cream. [Tabular Data Omitted]
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Publication:Economic Review
Date:Aug 1, 1990
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