Glaxo SmithKline (GSK) India has deferred the merger of
Burroughs Wellcome India with itself. Currently, the multinational
is weighing options to sell Burroughs Wellcomes
real estate and manufacturing facility at Mulund, a Mumbai
borough, after shifting Burroughs products into
the GSK folder.
GSK management believes that the ongoing tussle with the
Burroughs employees union is not likely to be resolved
soon. The involvement of an outside union in the wage
disparity issue between GSK and Burroughs employees has
further intensified the unions fight over the issue.
The only remaining option for the company is to sell the
Burroughs plant and the related real estate to a third
party. Burroughs being a GSK subsidiary, the company has
the right to sell the Burroughs properties,
say sources close to the development.
the operational merger of Burroughs with GSK happened
in early 2002, the legal merger of these two entities
is yet to take place due to the wage disparity between
GSK and Burroughs employees. Subsequently, the Burroughs
employees union approached the labour court to settle
the issue. There is a 40-per cent wage disparity between
GSK and Burroughs employees.
a senior GSK official: We are fully engaged with
the disposal of our Ankleshwar facility in Gujarat which
was sold to Glenmark Pharma two weeks ago. Now Burroughs
is next on our agenda. But no final decision has been
taken so far.
sources say following the Indian merger of Glaxo and SmithKline,
the wage structure of Glaxo employees witnessed an upward
revision. Subsequently, the wage disparity between Glaxo
and Burroughs employees has come down from the earlier
40 per cent to 20 per cent.
sources add that the sale of the Mulund facility assumes
more significance because GSK globally follows an international
practice of moving its manufacturing facilities away from
densely populated areas.
residential population in Mulund is high compared to the
industrial population. Currently GSK has five manufacturing
facilities in India four formulation n facilities
in Nasik, Mysore, Bangalore and Mulund, and a bulk drug
facility in Thane.