FINMIN TO ALLOW DR REDDY'S & EMMELLEN BIOTECH TO SET UP OPIUM BUSINESS

The government may soon award licences to Dr Reddy's Laboratories and
Emmellen Biotech for setting up two factories for opium processing,
sources close to the development told SundayET. The finance ministry,
which has selected these two pharma companies out of 16 short-listed
entities, may issue the final order anytime soon.

This is the first time the government will allow private players to
undertake opium business. The processing of opium is essential to
produce codeine phosphate, morphine and other alkaloids, which are
needed for manufacturing drugs.

According to the plans, Dr Reddy's Laboratories will set up a factory
in Vizag whereas the Emmellen Biotech is planning to build the opium
processing factory near Mumbai.

The Finmin will allow each factory to process 100 tonnes of opium
initially, and the government may allow them to export processed
opium at a later stage.

They may be allowed to export processed opium later, but currently,
we are issuing licences to private companies mainly to meet our
domestic shortage which is around 20 tonnes a year, an official said.

At present, opium processing takes place only at two government-run
factories, one at Neemuch in Madhya Pradesh and other at Ghazipur in
Uttar Pradesh, both producing about 130 tonnes every year.

Though the government will give the selected private companies a time
length of three years to complete the process of setting up the
factories, it's expected that the factories will be operational in
just one year.

According to the sources in the finance ministry, Dr Reddy's
Laboratories and Emmellen Biotech were selected out of four bids,
which were found technically suitable. Eight pharma companies
submitted bids for procuring licences for opium processing.

Interestingly, India is also a hub of illicit opium. West Bengal,
Jharkhand and Jammu & Kashmir are the biggest producers of illicit
opium, which are mostly used for producing heroine.

It has also become a security concern as according to intelligence
reports, Maoists too sponsored large-scale opium cultivation in
Jharkhand last year.