KOCHI: Kerala State Drugs and Pharmaceuticals Limited, only company in the Government sector to manufacture drugs, is planning a total overhaul of product mix for the year.

Instead of the present three low-value, low-margin products, the KSDP bouquet will have 21 high-value, high-margin products next year.

The company has also projected a turnover of Rs.18 crore, K.G. Ajit Kumar, managing director of the KSDP, said.

Revival package

The Alappuzha-based company was almost on the verge of closure when the LDF Government came out with a revival package. Total production for the first nine months of the last financial year was for Rs.34.21 lakh.

Raw material suppliers just did not want to do business with the KSDP, thanks to the mounting arrears. Some had even obtained favourable court orders for winding up petitions. Employees had lost all hopes of revival, with the company defaulting on even Provident Fund and ESI contributions, recalls Infinity, a KSIDC publication.

MoU signed

Hopes returned when an MoU was signed by the employees, the management and the Ministers holding charge of the Health, Cooperation, Finance and Industries departments.

While the departments assured the public sector steady purchase, employees undertook not to demand wage revision or arrears until the company returned to the black.

"We first looked for ways to stand on our feet. So we decided to concentrate on the formulations which have bulk orders," Mr. Ajit Kumar said.

With the advance payment received from the Health Department, the company started production in the tablet division. "This also helped the company keep a tab on purchases. Despite the ageing machinery and technology, the company hit a production target of Rs.1 crore in March." "With a production of Rs.1.24 crore a month, the company will be able to meet all the fixed and variable costs," he said.

"We can improve on this figure if we move to high value products. The other three divisions - capsules, injections and suspensions - will also start functioning soon."

According to Infinity, the Government has also decided to reward the PSU's performance. The Health Department sanctioned an advance of Rs.2 crore to the KSDP in March for supply of medicines, which helped the company tide over working capital shortage and optimise production.

The Industries Minister said that the KSDP would get assistance to start an IV fluid division also.

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