The sale will see Unichem receive 1.605bn INR ($30m) in exchange for its newly built facility in the Madhya Pradesh region area of India as well as all associated assets.
Speaking with in-Pharmatechnologist.com, Unichem spokesman Rakesh Parikh said the facility, which has just been completed, is “built up to international standards” and that “everything is ready to begin production of oral finished formulations.”
Under a policy announced in 2000 by the local government of Madhya Pradesh, a special economic zone (SEZ) has been set up to encourage development in the region, encouraging jobs and infrastructure “oriented towards export promotion.”
Indian Special Economic Zone
Pennsylvanian headquartered Mylan will benefit from various tax breaks high-lighted in the policy as well as being free to export manufactured product to where they want.
Various Indian pharma companies have taken advantage of SEZs in recent years including API supplier IPCA who has a plant in Indore, also in the Madhya Pradesh region.
However, changes in Indian law can jeopardize SEZs as demonstrated last year when Indian contract and research manufacturing services (CRAMS) company Dishman was forced to abandon plans near Ahmedabad.
Sudden impositions of taxes and ongoing bureaucracy are not cohesive to attracting investment and SEZ applications to the Indian Government fell from 39 to just 14 from 2010 to 2011.
According to Indian Government figures, there are currently 158 SEZs operational in India.