Sanofi confirms shutting down their Bangladesh operation for strategic reasons, confirms Md Muin Uddin Mazumder, Managing Director of Sanofi’s Bangladesh operation. The declaration brings an end to the continuous speculation about the company’s future.
It will take 12 to 18 months from the moment Sanofi starts the process of selling its stakes to the prospective buyer. Sanofi will soon start search for buyers as the French drug maker yet to find any buyers for its stakes in the venture. The French multinational pharma holds 54.64 percent stake of local operation while the Ministry of Industries and BCIC control 25.37 percent and 19.96 percent stakes respectively.
Earlier, rumours of Sanofi’s exit from Bangladesh surfaced last month when Muin Mazumder, Managing Director of Bangladesh operation, Ramaprasad Bhat, Country Chairman and General Manager of Sanofi Bangladesh, and Charles Billard, Chief Financial Officer of Sanofi India and South Asia, met with BCIC Chairman Md Haiul Quaium, who is also the board chairman of Sanofi Bangladesh.
At the meeting, the trio conveyed the French pharma giant’s intent to sell its stakes for strategic reasons. Since then, Sanofi continued to deny the rumours vehemently and earlier this month even sent out a letter to medical professionals reassuring them that the French pharma giant was not leaving Bangladesh anytime soon.
Talking about the company’s decision to wind up Bangladesh operations, Muin Uddin said that Sanofi is continuously making choices to reshape its portfolio, innovation pipeline and organizational structure and make its industrial footprint in different geographies worldwide.
Based on the decision, the Managing Director said, the multinational company intends to quit despite making consistent profits. It looks for a potential and trustworthy buyer who will carry its legacy ahead. He also confirms expressing their intention of selling their stake to the government shareholders.
Explaining how the new company will uphold the legacy of the French drug maker, he said the company is looking for a buyer who will commit to continue production of its existing products and follow ethical and scientific promotion of Sanofi portfolio in the long term, for the benefit of both patients and employees of the company.
Regarding the job security of the existing employees, Mr Mazumder said protecting interests of its employees is one of the company’s top priorities globally. He expressed their intention to negotiate a collective employment guarantee clause in the agreement with the new company for at least 12 months after Sanofi actually transfers its stake.
Indian operation of the multinational company recently closed the divestiture of its European generics business Zentiva to private equity firm Advent International for a total of US$2.2billion.
The government shareholders earlier asked the company’s top officials to comply with the section 31 of Memorandum of Association and Article of Association where it is clearly mentioned that the sellers shall give notice to the board that the shares are to be transferred.
As of December 2017, paid-up capital of the non-listed company is estimated around Tk 360 million while total asset of the company is calculated at nearly Tk 5.15 billion and external liabilities as Tk 2.65 billion.
On the basis of net asset value per share, the BCIC invested Tk 498.64 million, Ministry of Industry invested Tk 634.38 million and the multinational firm invested Tk 1.36 billion. Profit per share was estimated at Tk 102 in 2017 and the retained earnings were Tk 1.50 billion.
Last year, Sanofi Bangladesh registered Tk 42.12 crore in profit, 13.62 percent growth year-on-year.
Pharma industry of Bangladesh has been expanding at a double-digit rate every year, reaching around US$2.0 billion. Sanofi’s share in the country’s pharma market is below 2 percent and its ranking is 17th among the local medicine manufacturers.