Lupin to set up Japan-focused manufacturing unit in India

The focus is to get India's cost advantage and move bulk of production for Japan to India, a plan which Lupin has being attempting, but has taken longer than it anticipated earlier. But now, the plan is on track to set up a facility dedicated to Japan, which sources say could have a capacity to make 2 billion tablets a year, reports CNBC-TV18’s Archana Shukla. The new plant is expected to be operational by end 2014, post which the company will start applying for product approvals in Japan. Also Read: Why did Ranbaxy board not invite bids for sale?: Espirito Nilesh Gupta, MD, Lupin told CNBC TV18, “We are looking at regular optimization of capacities for Japan and are also setting up a separate suite in Goa dedicated for Japan.” Currently about 12-15 percent of production for Japan comes from Goa. The existing unit in Goa makes finished dosages for four products for Japan and will be adding two more products in this year. But since this plant caters both to the US and Japanese markets, it has been difficult for Lupin to manage and adhere to two sets of quality norms. Japan has different specifications for generic drug approvals and is considered even more stringent than the USFDA, the reason why the initial take off for shifting production to India took longer for Lupin. Now it plans a completely dedicated plant that will adhere to Japan and its requirements. Japan is a major focus market for Lupin, being the third-largest revenue contributor. Japan accounted for 11 percent with Rs 1,296 crore to consolidated revenues in FY14. Lupin had earlier mentioned that moving bulk production to India will help it rationalise at least 25-30 percent of costs. Lupin has strategised to not invest in expanding tablet manufacturing in Kyowa beyond what it currently has. So Goa unit will make most of the API and finished dosage and Kyowa will take care of re-packaging and quality assurance in Japan. It will start with approvals for new products and will slowly also move the existing products to new unit. Though this will take time as a product approval in Japan takes around 18-24 months to come, but the process at Lupin has begun.