GlaxoSmithKline ($GSK) expects increasing amounts of business from emerging markets, and so, to get ahead of the curve in India, the company is planning to build a new £85 million ($136.5 million) plant there. CEO Andrew Witty made the announcement himself while in the country for a conference.
The company said that it is "proactively building capacity in the country" as it builds up its business in areas like gastroenterology and anti-inflammatory treatments. A site has yet to be picked for the new facility, but according to The Economic Times, Witty said Bangalore seems the likely location. The plant and warehouse are expected to be completed by 2017 and will employ about 250 people. It will be large enough to produce up to 8 billion tablets and 1 billion capsules a year.
In 2012, Glaxo derived about 25%, $11 billion, in revenue from emerging markets, and India is one of the most important. The company says it currently has 8,500 employees working there. Its business there has been hurt recently by a backlash to price controls the government instituted. It recently reported that bulk sellers in "major pockets" of India ceased buying its drugs on Sept.15, unhappy about the cuts they are having to take on their margins under the policy.
In addition to its prescription drug business, GSK has also expanded its consumer health presence in the country. It upped its investment in its Indian consumer products affiliate last year to 75% from about 43%, an investment of about $940 million. The company pointed out today that Indians consume about 8 billion cups of its best known consumer product, the nutritional malt drink brand Horlicks, a year.
- read the release
- read the Economic Times story
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