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Ranbaxy announces USD 20m investment in Romanian subsidiary

Ranbaxy has revealed it will invest more than USD 20m in its Romanian subsidiary, Terapia Ranbaxy

Indian pharmaceutical company, Ranbaxy, has revealed it will invest more than USD 20m in its Romanian subsidiary, Terapia Ranbaxy.

The investment is a part of Ranbaxyís strategy to make the subsidiary a hub for Europe and Commonwealth of Independent States countries.

Terapia was acquired by Ranbaxy for USD 324m in June 2006 and the combined operations of both firms have created the largest Romanian generics firm, with around 1,200 employees. In addition, three-hundred and fifty employees form the largest field force in the Romanian pharmaceutical market.

Terapia has a manufacturing plant in Romania and now Ranbaxy is upgrading the plant. The main reason for the acquisition was that the company reported a four per cent drop in growth in Europe in 2006, posting USD 194m sales for FY06. The company attributes the fall to the intensifying pace of generic competition in the UK and healthcare reforms in Germany and France.

Despite the harsher climate, Ranbaxy recorded a 14 per cent rise in sales to reach USD 61m in 2006 due to strong performances in the markets of Poland, Italy and Spain. The company switched over the production facilities in France to India and will sell off its Ireland-based manufacturing facility.

Terapia Ranbaxy has manufacturing and import authorisation as per European Union norms, entitling the company to batch test and release products manufactured outside the European Union. It is the first pharmaceutical company authorised to batch test and release products in Romania.

In November 2006, Terapia Ranbaxy created a new logistic centre near the Romanian capital to increase warehouse capacity for Terapia Ranbaxy products and for adding bonded customs warehousing services for products produced by Ranbaxy and imported from India.

In 2006, Ranbaxy invested about USD 10m in Therapia and has been considering a similar investment in Therapia in the post-acquisition period, according to local media reports.

25th April 2007

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