Global Manufacturing Moving To India

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Case Study: U.S.-based Mylan Pharmaceuticals

Aug. 16 – Right on the heels of Ford Motor’s announcement that their global auto sales manufacturing hub would be in India, U.S.-based pharmaceutical giant Mylan said that the company has additional plans to invest in India. With half its global work force of 20,000 persons located in the country, about one-seventh of its global income is from its India operations – but this is also expected to jump significantly.

Mylan plans to acquire Agila Specialties through its Indian subsidiary for US$1.6 billion. If the proposal is accepted, Mylan expects to increase its domestic sales 12-fold by 2018. The deal would also help Agila increase its capacity to 600 million units by 2017, up from its current production of 180 million units. The news comes as Mylan made their latest submission concerning the Agila acquisition to the Indian Department of Industrial Policy and Promotion (DIPP).

Mylan, the world’s largest pharmaceutical generics producer in the world, has seven development sites in India focused on R&D with premier research facilities located in Hyderabad and Bangalore. According to Mylan’s DIPP submission, which includes the company’s investment plan and Indian sales figures, investment by the company has increased 42 percent each year over the last five years, while sales have risen 44 percent. During this time, Mylan’s workforce in India has also quadrupled.

Mylan entered the Indian market in 2006 with a buyout of Matrix Laboratories worth US$736 million. The company currently employs 9,700 people in India and has 8 units producing pharmaceuticals.

In 2006, Mylan had 330 employees engaged in research and development. That number has steadily grown to 1,100 R&D employees in 2013. The company operates two R&R facilities in Hyderabad and has made plans to open two more laboratories there in the future.

After entering the Indian market, Mylan was awarded the biggest project from the National AIDS Control Organization. Through innovative research, the company has reduced the patient cost of treatment from US$10,000 to US$150 per year.

In its latest presentation to the DIPP, Mylan sought to highlight the advantages of an Agila acquisition and emphasize synergies in production which would allow it to increase domestic unit sales.

With India now concentrating on the political benefits of foreign investment rather than the protectionist attitudes of previous years, examples of global strategy being shaped by India are now spearheading the case for foreign investment to concentrate on the opportunities the country now provides.

Dezan Shira & Associates is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in emerging Asia. Since its establishment in 1992, the firm has grown into one of Asia’s most versatile full-service consultancies with operational offices across China, Hong Kong, India, Singapore and Vietnam as well as liaison offices in Italy and the United States.

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