GlaxoSmithKline closing ‘unsustainable’ Bangladesh pharmaceutical unit

British drug giant GlaxoSmithKline is pulling the plug on its pharmaceutical business in Bangladesh citing ‘commercial unsustainability’.

The GSK Bangladesh board of directors is proposing the closure following a business review and expecting to complete the process by the end of this year, it said in a statement on Thursday.

The Bangladesh entity of the firm will continue its ongoing consumer healthcare business which is not impacted by the changes in the pharmaceutical operations, it said.

Its consumer healthcare products in Bangladesh include nutritional drinks Horlicks, Maltova, Boost, Viva and Glaxose-D, Sensodyne toothpaste, and Horlicks Biscuit.    

The firm pledged ‘appropriate support’ to over 1,000 of its employees at ‘this very challenging time’.

GSK Vaccines, which are purchased via the UN’s wing for children UNICEF and funded by Gavi, the Vaccine Alliance, will continue to be available in Bangladesh, it added.

It will hold a news briefing on the closure in Dhaka on Friday, GSK Bangladesh Head of Communications Rumana Ahmed told bdnews24.com.

GSK Bangladesh staffers at its pharmaceutical plant in Chattogram’s Faujdarhat demonstrated against the decision to close operations.

The factory has around 500 officials and workers while 500 others are engaged in sales and marketing jobs across Bangladesh, according to GSK Employees’ Union President Mohammad Ilias.

The pharmaceutical business unit of GSK also has over 500 temporary workers, he told bdnews24.com.

“We have only one demand – announcement on reopening the factory. Otherwise, we will launch indefinite sit-in preogramme,” he said.

Ilias claimed the firm is closing the pharmaceutical business despite making profits last year and recent investment of around Tk 1.5 billion for renovation.

The union’s General Secretary Mohammad Azam said there was no work at the factory on Wednesday and Thursday.

“They did not tell us anything beforehand though we had asked repeatedly what was happening. Now the sudden announcement of closure has come. We don‘t accept it,” he said.

Listed on Bangladesh’s capital market in 1976 as a pharmaceutical company, GSK announced 500 percent dividend for its shareholders in 2016 and 550 percent in 2017.

The company, however, suffered a drop in its earning per share to Tk 15.14 from Tk 19.27 this year, according to its unaudited financial statement for January-June period. 

Its net asset value per share (NAVPS) also dropped to Tk 178.49 on June 30 from Tk 183.93 of the same time last year.

GSK share price dropped Tk 80 to Tk 1,205 on Thursday after a group of its employees alleged ‘conspiracy’ for closure at a news briefing on Wednesday. Earlier in November last year, GSK share price rose to Tk 1,700.

According to the Dhaka Stock Exchange, sponsor-directors hold 81.98 percent share of the company, institutional investors 15.93 percent, foreign investors 0.91 percent and small investors 1.18 percent.