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Hoechst Bangladesh MD speaks out

Pharmaceutical sector highly regulated

Interviewed by SY Bakht
Leaving a secured govern ment job for an executive position in the uncharted avenue of the private sector is a big dilemma and even a bigger challenge for a person.
For S R Karim, taking the risky path has paid off reward Ingly over the past 16 years and. recently, he has become the first Bangladeshi to be appointed Managing Director of the local subsidiary of the German multi-national, Hoechst AG of Frankfurt.
In an Interview with The Dally Star, Karim, a former Central Superior Service officer. dwelt at length on the tough choice he had to make In switching Jobs, the contrast between working for the government and the private sector and also on his company's present performance and future plans.
Completing his Masters in Economics at Dhaka Unive rslty, he passed the Central Superior Service Examination In 1969 and. following training, joined the Taxation ^r Liberation, he was posted In the Ministry of Finance and upon completion of his post -graduate studies on a government scholarship In the United Kingdom. His ser vice was again placed under the same ministry tn 1975.
In 1976. the then German Managing Director of Hoechst Bangladesh offered him a Job as the Finance Manager of the company.
The choice was a difficult one to make. Karim says, as the government job was secured with more or less pre determined promotional prospects and In the private sector on the other hand the price one has to pay for failure Is conversely as steep as the high reward of success.
In the private sector, he points out. one Is judged solely by one's performance which Is constantly evaluated. *So. for me to come out of thia secure shell of a government job and plunge Into the uncharted territory of the private sector was a risky decision at the "^e financial benefits of freed by the company, he says were the biggest attraction at that point for him and joining a leading German multi na UonaJ also provided an assur ancc for the future.
To lead an honest life by a gnemmrnl servant with dcdl cation to service was very dlffi cult in those days, he notes, as the earnings did not have any relationship with the rate of inflation The consequence ms that most government servants were suffering from mental
Thus, it was a choice for me to get out of that morass and the mental suffocation.' IU5JmaflhslanWng the high risk involved In leaving a government job for one In the pri vale sector, he recalls.' I still took the plunge in 1976*. And he never had to look back
After four years as the ^Finance Manager he was sent for a one-year training with the parent company In Frankfurt in 1980. The purpose of the training was to inculcate a certain attitude and discipline in running a German company." he says, adding "and of course I learned German during that period.'
Soon after his return, the company was jolted by the introduction of the drug policy in 1982. The consequence of the drug policy was that we lost almost 55 per cent of our total turnover, and we were
forced to restructure our or ganfw’tton. hr explains.
Ninety out of the 400 cm pfoyers al the time had to be retrenched and the Invest ment plans had to be shelved hr points out.
Under the drug policy he points out. multi national pha rmaceutkaJ companies r arinot introduce new research based drugs into the market, import of raw materials and retail price is controlled and foreign companies were not allowed to manufacture certain products which were made the exclusive preserve of local pharmaceutical companies
"So, the policy affected the profitability of the company and did not allow ihe market to grow.' he says Bui the company slowly recovered from the initial Impact of the drug policy by Introducing some new product* that were allowed Into the market
"Although we were some what late in Introducing these new products were lucky to get a market share perhaps because of our quahty.' he ex plains. But he hastens to add. the company never recovered fully from the blow of the drug policy and despite making small amount' of operating profits, we could not plan for expansion and future Invest ments tn Bangladesh".
In 1989, when the drug administration was contemplating further cut in the num ber of drugs which can be produced tn the country to 302 from the nearly 500 products under the drug policy, the parent company in Germany was seriously debating whether to remain tn Bangladesh or
not
The pharmaceutical Indus try is a highly regulated one where the rule* of free enter prise and market forces do not play any role.' he observe*
To keep up with the quality control requirements o’ the parent company. Hoechst Bangladesh had to Invest in upgrading the manufacturing practices at It * tone factory In Chittagong
At the same time, a technl cal assistance ahrmr was worked out with Hoechst India, one of the larger sub sldlarles of the parent com pany. to reduce cost*
Since 1990. the technical cooperation with Hoechst India has worked out very well for us." he says
Presently. Ihe government I* contemplating changes tn the existing drug policy and If the government keep* in mnd the problems of the multi na tlonal companies then perhaps the climate would Improve, he 1 opes.
Certain proposals with re gard to changes In the drug polay have already been sub mlttcd to the government by the niultl-natfon.il pharmact u tlcal companies through the Foreign Investors Chamber of Commerce and Industry, Karim informs.
Hoechst Bangladesh, set up as a company In 1958, produces 35 items tn it's manufacturing Itne which it Includes a number of specialised medicines and is also involved in the Import of textile dyes, pigments, plastics, leather chemicals and other chemical products.
A total of 363 persons are employed both at it's Dhaka office and factory in Chittagong.
Earlier, since Its Inception, the company was run fully by expatriate German staff and at one tie there were five Germans heading the production. marketing. Industrial business and general management skies of the company.
Over the years, the man agement skills have been transferred to the local staff and today It Is managed totally by local professionals under di rect supervision from Fran kfurt,' Karim, who was promoted to the post of Finance Director In 1986. points out. Transfer of tech-nolo^ in the areas of quality control and production techniques also took place, he adds.
The company Is planning to diversify agro chemicals and veterinary medicines tn the near future "However, It all depends on a proper invest ment climate and the right types of government incentives.- he hastens to add
Street demonstration*, nar tals and frequent power short ages are the primary hindrances to the smooth operation of a factory, he says 'Nowadays, It Is the erratic power supply which Is creating a tot of difficulties for us 1n terms of loss of working the basic differences be tween a government Job and that of a private sector com pany. he say*, interpersonal relationship Is more intensive and the decision making pro cess I* much faster tn the pri vate sector compare to government organisations where interactions are limited and a chain of people are Involved tn taking decision*
"tn the private sector one has to operate In a very structured environment Interacting tosely with both superiors and subordinates, which some time* tends to generate Inter personal problems, he says. One has to be wry careful and cautious to avoid such pitfalls '
As for the quicker pace of the decision making process, lie says, "tn a business organl sal ion you are responsible for taking decision or for not tak Ing one and In either ease you are accountable for your ar Hon-
One ha* to decide and act on an Issue promptly In a pri vate enterprise, he add s' time la money and you are evaluated every moment for your effort* and your commitnant to your organisational goal therefore lends to become transparently pronounced"