5 March 1998: New manufacturing facilities of India“s Gujarat Glass were recently inaugurated at Jambusar, India, announced Mr. Ajay Piramal, chairman of Nicholas Piramal India Ltd. (NPIL).
The comp…
5 March 1998: New manufacturing facilities of India“s Gujarat Glass were recently inaugurated at Jambusar, India, announced Mr. Ajay Piramal, chairman of Nicholas Piramal India Ltd. (NPIL). The company reportedly invested Rs 1.25 billion in the plant with a capacity of 230 tonnes-per-day, which is the largest dedicated amber pharmaceutical bottles plant in the world at a single location. The plant is equipped with six manufacturing lines and 138 cavities, capable of producing two million bottles per day. Meanwhile, in a strategic move to enhance its shareholder value, and simultaneously to allow two of its key business segments to achieve their full potential, Piramal also announced the spinning off of Gujarat Glass and Bulk Drugs as two separate subsidiary companies of NPIL, which is to go into effect 1 April 1998. “Globally competitive costs of manufacturing and large capacity coupled with the known fact that many multinationals are looking at India as a global manufacturing source, singles out these divisions to be structeured as spun-off independent subsidiaries. This independent status allows them flexibility to meet the special requirements to compete better in the global market place,” said Piramal. The first step in this direction has been initiated by forming a new company, Gujarat Glass Limited (GGL), wherein the shareholders of NPIL will retain 60% stake thereby holding majority both in terms of equity and management control. The remaining 40% of the new company“s equity is being sold to banks and other corporations for around Rs 4 billion. It is thought that the funds raised will be used to finance acquisitions and joint ventures in the pharmaceuticals sector. “The key factors to globalise a business including investment needs are quite different and need to be tackled differently,” Mr. Piramal said. The resolutions of the board to this effect are subject to approval by shareholders at a meeting proposed to be called on 20 March 1998.