KARACHI, Oct 20: Bristol-Myers Squibb (BMS), a multinational foreign pharmaceutical manufacturing company, is in the process of winding up its local operations, but the Pharma Bureau (PB) has not confirmed the packing up of the company.

Market sources said that BMS was reported to have engaged Citi Bank for selling its operations in Pakistan and was planning to complete the process by the end of this year.

When Dawn contacted PB Executive Director Riaz Hussain for official version, he said he and his members had been hearing this news from various market sources. “The BMS however has not yet officially communicated about its departure to the Pharma Bureau or it may want to keep it secret,” he added.

He also did not confirm whether the said company had engaged Citi Bank for selling its local operations. “Even I don’t know which foreign or local company is eyeing BMS,” he said.

However, without quoting the name of any company, Riaz Hussain hinted that “one or two more foreign MNCs are planning to quit the country.”

Among others, he said, the main reason behind the departure of pharma companies was no upward price revisions or adjustment since December 2001 having severe impact on long-term viability of their operations.

“Inflation has surged by 65 per cent since 2001 which means that the consumers are now getting drugs on the highly discounted rates, besides the price of raw materials, utility bills and labour and energy charges have increased substantially in the last eight years combined with massive rupee devaluation against the dollar,” he elaborated.

He claimed that many MNCs were suffering losses and curtailing production of especially life saving and essential drugs. It may create a vacuum of Rs15 billion of such drugs and ultimately counterfeit products would land in the markets to meet the demand.

BMS, quoted on the NYSE, will be third company to leave Pakistan at a time when the country is badly needed foreign investment. The company started its operations in 1984 and has been investing in upgrading its plants and machineries over the years.

There are no official figures available about the total work-force strength of BMS, but sources put it around 250-300 employees. It is manufacturing reputable brands of antibiotics, blood pressure control and cancer drugs.

Some of its brands are leading in their therapeutic category. Velosef is one example with over Rs700 million out of total Rs1.3 to Rs1.5 billion annual sales of the company, Pharma Bureau sources said.

They said that the value of plant was estimated at Rs1.4 to Rs1.5 billion and market reports suggest that local companies cannot bid to take over BMS in view of recovery in the aftermath of surging cost of production.

They said that there might be a chance that some Arab investors could show their interest in BMS instead of any European or local companies.

Meanwhile sources in Pakistan Pharmaceutical Manufacturers Association (PPMA) said that there were seven local companies who were vying for BMS and it was reported that confidential papers among potential buyers had already been circulated. Chances are that some local companies form a consortium for buying the MNC whose annual sale is estimated at Rs3 billion.

Qaiser Waheed, former chairman PPMA, said it was a strategic decision of the foreign company to close down its 22 plants across the globe including Pakistan.

He was of the view that exit of foreign pharma companies may create problems as Pakistan did not produce highly-research based and hi-tech medicines. However, many local companies have been introducing low rate medicines in sharp contrast to high priced medicines for same medical treatment.