The Hindu : Business : A heavy toll on pharma cos.

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Tuesday, Aug 02, 2005

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Business

A heavy toll on pharma cos.

Staff Correspondent

Rains, release of water from Barvi aggravates situation, say cos.

MUMBAI: The heavy rains and consequent floods that have ravaged Mumbai and surrounding areas over the last few days have taken a heavy toll on the pharmaceutical companies, the godowns of many of them were flooded.

In Bhiwandi, considered the `mother' godown for most pharmaceutical companies to supply to other godowns in Maharashtra, floods have posed a significant problem and although losses incurred due to goods damaged are still being worked out, estimates vary widely from Rs. 200 crore to Rs. 1,000 crore.

"There has been a significant impact because central warehouses, which are located there, cater to the western sectors,'' said Amar Lulla, Joint Managing Director, Cipla. While a significant portion of the stock is clearly unusable, Cipla and other companies are redirecting stocks from Pune, Goa and Indore to the Mumbai region.

Bhiwandi godowns hit

Ranjit Shahani, Chairman and Managing Director, Novartis India and President, Organisation of Pharmaceutical Producers of India (OPPI), feels that the losses could be in the region of Rs. 1,000 crore.

The damage to stocks in the godowns was not in any way linked to faulty storage facilities according to Habil Khorakiwala, Chairman and Managing Director, Wockhardt, and President, Indian Pharmaceutical Alliance (IPA). According to him, all godowns in Bhiwandi are well constructed and located eight feet above the road level.

"The culprit in this case was not the rain. Rather it was the release of water from the Barvi dam at Bhiwandi without any prior intimation by the authorities which led to water level rising to 14 feet and caused the subsequent flooding and damage,'' said Mr. Khorakiwala.

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