Govt plans to invest ₹550 cr in HLL Biotech’s vaccine facility
NEW DELHI: India’s largest integrated vaccine complex outside Chennai, which was struggling to start production, is likely to get a new lease of life through a fund infusion from the central government. The government plans to invest around ₹550 crore in HLL Biotech Ltd’s (HBL) complex near Chennai, two senior health ministry officials said anonymously.
HLL Biotech is a unit of staterun HLL Lifecare Ltd, in which the government plans to divest its entire stake. The timing and valuation of the sale is not yet known.
The proposed integrated complex, designated by the UPA government as a “project of national importance”, is seen as pivotal to the government’s universal immunization programme, and will manufacture vaccines against measles, hepatitis B, human rabies and Japanese encephalitis, among other diseases. Vaccines manufactured in the complex are proposed to meet about 75% of the total requirement under the programme. Currently, vaccines under the programme are being procured through tenders, with a significant part of it coming from private players.
First proposed by the United Progressive Alliance, the government had in 2008 appointed Denmark-based NNE Pharmaplan as the independent consultant for the then-₹600 crore project. The first phase of the project was due to be commissioned as far back as in 2010, but it has been struggling due to a financial crunch.
The government has not invested fresh capital into the firm as its parent HLL Lifecare, the manufacturer of Moods condoms, is slated for divestment, the second health ministry official said. Currently, a proposal for demerger of HLL Biotech as well as another subsidiary of HLL Lifecare, called HLL Medipark, is pending approval from the ministry of corporate affairs.
Once the approval comes through, the central government plans to invest ₹500-550 crore into HBL (HLL Biotech), out of which around ₹300 crore will be used for repayments to the State Bank of India as well as another ₹100 crore for other outstanding payments, the first official said, adding that the approval has to come from the finance ministry, but that the process could take up to a year. Besides the fund infusion, the government also plans to rope in a private company for the management of the vaccine complex and to provide the technology and seeds for producing vaccines, the official said.
“The government may consider selling a small stake in HBL to the private player which manages the complex, but the majority of the stake will be with the government so as to ensure that the country has vaccine security,” the first official said.
HLL Biotech chief executive officer V Vijayan did not reply to emailed queries on the matter, while his mobile phone was unreachable. “I feel the IVC (integrated vaccine complex) project is a white elephant. It would have been more feasible to procure vaccines from existing facilities which have been upgraded to meet WHO standards,” Madhavi Yennapu, senior principal scientist at the National Institute of Science, Technology and Development Studies, said.