In a move that will significantly benefit the pharma industry and bring additional revenues to the government also, the finance ministry has decided to rope in the private sector for processing opium. India and Turkey are the largest legal producers of opium in the world.
At present, the government-owned Opium and Alkaloid Works employs archaic technology to manufacture opiates and other byproducts in its two factories at Ghazipur, Uttar Pradesh and Neemuch, Madhya Pradesh. Though a sick company with no profits, it generated revenues of Rs 298.56 crore in 2009-10. The government has, therefore, been exporting raw opium and importing huge amount of processed opium from other countries.
Finance ministry sources told The Indian Express that to begin with, the government would allow the private sector up to 49 per cent stake in a joint sector company to implement the latest technology — called concentrate of poppy straw — for manufacturing opiates. The government will hold the majority stake of 51 per cent. It has already called for Expressions of Interest (EoI) from companies which possess the technology.
While the private sector will take care of operations, the government would continue to regulate the business, the sources said. Regulation would necessarily include monitoring movement of the raw material and ensuring there is no pilferage.
In India, the production of poppy seeds, used for producing opium, a narcotic substance, is licensed. The Centre awards licenses and fixes a production target every year. The opium is collected by the Centre.
It is then either exported to pharma companies globally for medicinal purposes or is processed in one of the two government-owned factories. In fact, the Ghazipur factory is the world’s oldest opium factory set up by the East India Company.
Sources said that despite being the largest legal producer of opium in the world along with Turkey, the business was not commercially viable. The joint venture will have the mandate to process opium and sell the produce at market-linked prices to pharma companies, they added. Turkey has already roped in the private sector and is reaping benefits now.
Thu Nov 18 2010, 03:38 hrs
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