GSK seeks shareholders' nod to close pharma unit
GSK Bangladesh has convened a meeting next month as it seeks shareholders' nod to close its unprofitable pharmaceuticals business in the country.
Meanwhile, nearly 200 employees of the local operations of the British multinational pharmaceuticals company have been staging a sit-in on the factory premises in Chittagong for the last 50 days to protest the closure decision.
The demonstration began after the GSK Bangladesh board on July 26 proposed to shut down the plant, saying it was making losses.
The board has convened an extra-ordinary general meeting on October 14.
A board member of GlaxoSmithKline Bangladesh said the pharmaceuticals unit, which is almost 60 years old, has been incurring losses for the last five years and the board is concerned about further losses.
He said GSK is raising product packaging standards globally which will increase the prices of medicines, inflicting further losses on the pharma unit.
A senior official said its product portfolio lacks medicines that sell the most in the local market.
GSK Bangladesh Managing Director Nakibur Rahman also blamed the gap in the product portfolio for the losses.
On the other hand, global portfolio and pipeline products of the company are not suitable for Bangladesh market, he said. But Md Elias, president of the GSK Bangladesh Employees' Union, said: “The pharmaceuticals unit still has the opportunity to return to profit, so they should continue the operations.”
More than 800 permanent employees of the pharma unit will lose jobs if the plant is shut. However, GSK is trying to rehabilitate them.
It will organise a job fair next month in collaboration with the Bangladesh Association of Pharmaceutical Industries where 200 drug makers will be invited.
GSK officials hope most employees will get jobs in other companies though it may take time.
Last week, the company held meetings with senior officials of several pharmaceutical companies and 13 employees have already got appointment letter from Incepta Pharmaceuticals, one of the top pharma makers in Bangladesh.
GSK has completed negotiation with nearly 600 employees about job benefits when they exit. Officials said along with job benefits, every employee will receive gross salary for up to 15 months to 70 months as compensation.
GSK Bangladesh, however, would continue with its profitable consumer health care business that produces items like Horlicks, Sensodyne and Glaxose-D.
The company is listed on both Dhaka and Chittagong stock exchanges. Sponsor-directors own 81.98 percent stake in GSK Bangladesh while institutions hold 15.88 percent, foreign portfolio investors 0.92 and retail investors 1.22 percent, according to the Dhaka Stock Exchange website.