Mumbai, May 2: Sun Pharmaceutical Industries is shutting down its manufacturing plant in Detroit in the US, which is owned by its subsidiary Caraco Pharmaceutical Laboratories.
The Dilip Shanghvi-promoted company said it closed down the unit as it was consolidating its operations in the US so that production fits in with demand. The closure is likely to affect the jobs of around 123 people.
“As a part of manufacturing consolidation, it (Sun Pharma) has notified the Workforce Development Agency for the State of Michigan regarding its decision to cease manufacturing operations and close the Detroit facility located at Elijah McCoy Detroit, Ml, USA,” Sun Pharma said in a statement issued to the stock exchanges today.
“The company has provided the requisite advance written notice of the facility closure to the employee union and all affected employees.’’
The company added that it had ensured that the impacted employees got compensated with more than their regular entitlement under the severance package. They will also receive support in looking for jobs elsewhere.
Meanwhile, to ensure the availability of the products manufactured at the Detroit facility, the company has decided to shift the manufacturing operations to other units while taking care to avoid market shortage.
“Sun Pharma expects a negligible impact of this development on its 2014-15 consolidated revenues,’’ it added.
There are speculations that the closure of the plant is related to the proposed merger with Ranbaxy Laboratories. However, a spokesperson for Sun Pharma denied this.
“The decision to close down the Detroit facility is driven by business considerations. Our capacity in the US is considerably large and it has become essential to consolidate our manufacturing in line with the market requirements. The decision to close the unit is not at all linked to the Ranbaxy transaction,’’ he told The Telegraph.
Last year, the USFDA had raised concerns about the manufacturing lapses at the plant.