Radiant Pharmaceuticals has acquired Julphar Bangladesh, a subsidiary of United Arab Emirates-based multinational Julphar Gulf Pharmaceutical Industries, for around Tk 140 crore.
It is the latest development in a series of what seems to be an exodus of multinationals selling off their local ventures such as Pfizer of the US, Hoechst of Germany and Organon Pharmaceuticals of the Netherlands.
Soon to follow suit is Sanofi-Aventis France while GlaxoSmithKline of the United Kingdom has conducted lay-offs at their Bangladesh factory.
Radiant is one of the top 12 companies in terms of sales of drugs in the country. The company makes products for both local and international markets. In 2016, the company's drug sales amounted to Tk 609 crore. In 2020, the company's sales amount was Tk 861 crore.
Mutual Trust Bank is providing 70 per cent of the finance, or Tk 85 crore, for Radiant to make the takeover, said its managing director, Syed Mahbubur Rahman, adding, "We are happy to be part of the takeover process."
"The pharmaceutical company has a good potential to expand its business in the days ahead, encouraging us to invest the fund in the entity," Rahman said.
Radiant has already started exporting products and the volume may increase in the future, he said.
"(It is) our business expansion plan," said Md Nasser Shahrear Zahedee, chairman of Radiant Pharmaceuticals.
"The acquisition not only complements our technical facilities but also strengthens our strategic position with their field forces in the market," he said.
According to him, market demand for the Radiant's products has been growing by around 20 per cent in the past few years which encouraged them into acquiring the already-running Julphar factory.
Zahedee said the Julphar had a very up-to-date facility, better than theirs, which was the main reason for the takeover.
"If we had gone for setting up such a facility, it would have taken at least three years to go into production as Julphar also has an oncology facility," he noted.
Besides, there is no requirement to take permissions afresh to continue production of Julphar's existing products because only ownership has changed, said Zahedee.
Zahedee said along with them, two to four other local companies as well as Indian companies were interested in buying the Julphar.
"We have reached a final stage in the overall analysis. As part of which we have signed an acquisition agreement and we have been in charge since July 15 last year. The acquisition process between the partners is over," he said.
But Bangladesh Bank has some rules for giving clearance, which are being abided by. "Once the clearance is received, I can say that the acquisition process has been completed," he noted.
Zahedee said he acquired 100 per cent share of the company. Julphar had 80 per cent share while the rest belonged to RAK Pharmaceuticals.
Julphar Bangladesh started its journey on July 31, 2009. The state-of-the-art manufacturing facilities on a 228,705 square feet area is located 42 kilometres north of Dhaka under Sreepur upazila of Gazipur district.
The facilities have the strength of general manufacturing unit, dedicated cephalosporin unit, advanced three layer floors, prototype R&D laboratories, effluent treatment plant (ETP) and advanced water treatment system with recycling facilities.
Presently Julphar Bangladesh has more than 120 products including antibiotics/antimicrobials, anti-ulcerants, anti-inflammatory, anti-hypertensive, oral anti-diabetics, anti-viral, oncology, dermatological and nutritional supplements.
The company is said to be in strict compliance with WHO GMP and USFDA & TGA guidelines and sourcing active pharmaceuticals ingredients mainly from certified sources.
It is claimed to be the only company in Bangladesh to have achieved a GPM compliance certification from The Ministry of Health, UAE.
But this journey is abruptly coming to a close within a decade.
According to former officials of the Julphar, its business had been going very well up until 2016.
At the end of 2016, Selim Solaiman joined as its new CEO for Bangladesh. Ever since he took charge, the multinational practices of running the company's business has declined.
At one stage Julphar faced losses. Besides, like all other multinationals, they had to adapt to the prevailing business environment in the country. But in context to its peers, it was not able to give out gifts and benefits to doctors on a massive scale. The Julphar failed to increase its profits, the officials claimed.
Meanwhile, the Julphar staff at a press conference in Economic Reporters Forum yesterday demanded that the multinational provide compensation as per rules before packing its bags.
The sacked staff also demanded profit shares, welfare shares and equitable distribution of 35 per cent of factory sales.
They alleged that the company did not inform them of the developments one year in advance and had forced them to resign.
AHS Yusuf Hyder, former Khuna zonal manger, and Md Rasheduzzaman, former Mymensingh area manager, spoke at the event.