In 2014, when Johnson & Johnson broke ground on an ambitious manufacturing facility in India and announced its plan to employ 1,500, local dignitaries hailed the initiative and its promise to bring major development to a rural area near Hyderabad.
Eight years later, the company has sold the site without ever conducting operations there. Indian manufacturer Hetero has purchased the “brownfield” facility—which was constructed but never opened. Hetero plans to pour Rs 600 crore ($73 million) into restoration and upgrades, it said.
Sources told an Indian news outlet that the facility was sold for Rs 130 crore ($16 million). Hetero said that it was through a “slump sale,” that it acquired the site. Slump sales are done for tax purposes without values being assigned to assets and liabilities.
J&J did not respond immediately to a request for more information.
Hetero has big plans for the 55-acre site, saying it will become its flagship facility and will generate 2,000 new jobs, boosting production of biopharma products including biologics and biosimilars.
When J&J revealed its initial investment in the site, it said it would manufacture cosmetic products, including its iconic baby powder. But as construction progressed, the company faced increasing litigation over the product, which plaintiffs say caused their cancer.
The company stopped selling its baby powder in the U.S. and Canada in 2020 and announced this year that it would discontinue its sales worldwide in 2023. The company will replace it with a cornstarch version.
A 2019 story from Reuters documented the constructed plant laying fallow and cited a company source who said that J&J misjudged demand for the products that they planned to produce there.