Fixing the Ranbaxy Problem

Sun pharma bought a drug company that was lurching from one crisis to another. Here's how it has gone about curing the ailments.

- Joe C. Mathew

PATH TO INTEGRATION

 

How Sun Pharma’s purchase of Ranbaxy is progressing

 

WHAT SUN SAYS: The company has embarked on consolidation initiatives to drive growth and profitability, and enhance shareholder value

 

ACTION: Rationalising portfolio to focus on only profitable drugs, reducing costs, selling off non-strategic businesses

 

WHAT SUN SAYS: It will rationalise manufacturing operations

 

ACTION: Sold three plants in the US (one of Ranbaxy in Ohio, the other two of Sun in Philadelphia and Aurora). Closed a plant in Detroit belonging to Ranbaxy subsidairy Caraco. Planning to close a Ranbaxy unit in Ireland. Examining other manufacturing facilities to see which ones should be kept and which ones sold or shut down

 

WHAT SUN SAYS: Will take cost-management measures

 

ACTION: Apart from closing several plants, has also rationalised top  management and overall manpower, and also sold some portions to eke out savings. It sold the CNS division of Ranbaxy to Strides Arcolab and has exited many lo w-margin businesses in Europe

 

WHAT SUN SAYS: Targeting $300-million synergy benefits from the acquisition; will be able to get more synergy benefits this year than last year.

 

Action: All brands, functions and operations being examined painstakingly to cut out overlaps. Measures being put in place to get more out of employees of both companies