B R Shetty’s Neopharma continues to operate despite lack of access to funds

B R Shetty’s Neopharma pharmaceutical business is continuing operations as normal, despite a freeze on the company’s bank accounts because of the tribulations faced by its founder, its director of plant operations said.

Suresh Pai, who was Mr Shetty’s first employee when Neopharma was set up in 2002, said “morale is very high” despite salaries not being paid.

“We are performing as normal,” said Mr Pai, who now oversees three factories employing about 600 people. “Production is going on as usual ... sustained supplies have to be maintained for the market at this time of medical crisis.”

Mr Shetty told The National this week that the freezing of his bank accounts has had a knock-on effect on other parts of the business, meaning he had been unable to pay salaries at Neopharma.

On Thursday, Bloomberg reported that the company was in talks with lenders to restructure Dh1 billion in debt, which could involve bringing in a new strategic investor. Mr Pai said he had no knowledge of the discussions with lenders.

Neopharma began operations from a single factory in 2003 and now has a capacity to produce 2 billion pills from its three plants in Mussaffah, Abu Dhabi. The company carries out contract manufacturing of medicines for companies including Abbott Laboratories, GlaxoSmithKline and Merck as well as making generic drugs that are no longer under patent protection. It produces anti-infection drugs such as levofloxacin and azithromycin that are used to treat Covid-19 patients.

The company is continuing to receive orders, Mr Pai said. As a pharmaceutical business, it has emergency management and business continuity plans in place to ensure it has enough materials to continue production for six to eight months.

“If it continues for a longer period of time, then maybe we will be in a little difficult position. But I am sure that it [the bank account] is going to get released soon and hopefully we are back in action.”