Mumbai: Fortis Healthworld Ltd, an affiliate of Ranbaxy Laboratories Ltd that runs a drug store chain, saw the exodus of seven senior executives including chief executive Ashish Kripal Pandit between late March and early April after an evaluation of the top management team’s performance, said a person familiar with the matter. The person, who did not wish to be identified, added that the executives left within days of each other after the board reviewed the performance of the team, especially its inability to set up an efficient back-end operation.
Sanjiv Chowdhary, chief executive of another Ranbaxy affiliate, diagnostics company, SRL Ranbaxy Ltd, has been given additional charge of the retail chain.
HIGH-PROFILE EXITS IN RANBAXY GROUP (Graphic)
“People in the old management team have left the organization owing to a set of reasons, which is a combination of their own as well as internal decisions,” said Chowdhary. “The management rejig is a positive development for a new entity experimenting with a new concept. We are bringing in new people by leveraging the strengths and synergies within the group,” he added.
Pandit, who is joining a telecom company in the UK, said his decision to move “was more of a personal decision.” He added that “such transitions are standard in the retail sector.” Pandit defended his team’s achievements and said it had established a strong base for Fortis Healthworld and that the company’s expansion was on-course.
Concerned: Group MD of Fortis Healthcare Shivinder Mohan Singh. (Madhu Kapparath / Mint)
Fortis Healthworld was launched in early 2007 and it planned to open at least 1,000 drug stores across the country by 2012. The company currently runs 50 pharmacies, mostly in and around New Delhi, Chandigarh and Ludhiana.
“The big expansion plan is almost shelved now,” the same person familiar with the matter said.
Fortis Healthworld now plans to expand its retail network to 100 stores over the next two years through the organic route, and add another 400 or more stores through acquisitions to take its presence beyond the northern parts of the country.
According to Chowdhary, the information technology back-bone SRL Ranbaxy has created for its nationwide diagnostics data exchange could be of tremendous advantage to the drug retail company.
The exits at Fortis Healthworld come at a time when several big pharmacy chains have slowed their expansion plans because of soaring real estate prices, lack of trained manpower and rising salaries.
An analyst who tracks the Indian retail industry and who doesn’t want to be identified agreed that these factors, and issues related to sourcing, had affected the expansion plans of pharma retail chains, but added, with specific reference to Fortis Healthworld, that “two years’ period is comparatively a shorter period to evaluate the performance of a retail firm, especially in the still-nascent pharmacy space.”
The churn at Fortis Healthworld comes less than a year after two high-profile departures from Ranbaxy and an exodus of top executives from hospital firm Fortis Healthcare Ltd. Last April, Ram Ramasunder, Ranbaxy’s chief financial officer and vice-president of strategic planning, and Rahul Goswami, the company’s chief information officer, had left.
And in June, Naresh Trehan, executive director of Escorts Heart Institute and Research Centre, a hospital acquired by Fortis Healthcare Ltd in 2005, left the company.
Fortis had wanted Trehan removed from the post he held for 20 years because of a “conflict of interest” with his upcoming healthcare complex project called Medicity at Gurgaon near New Delhi.
In an August interview with Mint, Ranbaxy’s whole-time director in charge of corporate affairs and global corporate communications, Ramesh Adige, had said that a globally grown business group such as Ranbaxy is no more dependent on individual professionals to drive its growth.
It’s rather a professional system that often decides business priorities, he had said.