Zydus, Sunshine launch US$20 million pharma plant in Horana to boost local drug manufacturing

A market-driven investment backed by confidence in local pharmaceutical manufacturing Sri Lanka’s drive to strengthen domestic pharmaceutical manufacturing received a major boost last week with the launch of a US$20 million joint venture between India’s Zydus Lifesciences and Sri Lanka’s Sunshine Healthcare to establish a modern pharmaceutical manufacturing facility at the Board of Investment (BOI) zone in Horana. The foundation stone for the new plant, to be built on nearly four acres, was laid by the leadership of the two companies in the presence of senior executives and stakeholders. The facility will manufacture pharmaceutical products for the local retail market, helping improve the availability of quality medicines while reducing Sri Lanka’s dependence on imports. The venture, operating as Zydus Sunshine Lifesciences Pvt. Ltd., combines Zydus’ global pharmaceutical manufacturing expertise with Sunshine Healthcare’s extensive distribution network and strong presence in Sri Lanka’s healthcare sector. The project is expected to facilitate technology transfer, create skilled employment, and strengthen the country’s healthcare supply chain. Speaking at the ceremony, Dr. Sharvil P. Patel, Managing Director of Zydus Lifesciences, said the investment reflected the company’s long-standing commitment to Sri Lanka, where it has operated for more than three decades. “We have always believed that strong local capabilities are key to resilient healthcare ecosystems,” he said. “Through Zydus Sunshine Lifesciences, we seek to contribute to the development of a stronger pharmaceutical manufacturing base in Sri Lanka by combining global scientific expertise with deep local execution capabilities.” Dr. Patel added that the project would go beyond manufacturing by creating high-quality employment opportunities across science, technology, healthcare and operations, helping nurture the next generation of talent in Sri Lanka’s pharmaceutical industry. Sunshine Holdings Deputy Chairman Vish Govindasamy described the venture as a significant progression in Sri Lanka’s future at a time when countries are seeking to secure stable supply chains. “The establishment of Zydus Sunshine Lifesciences contributes directly to building greater pharmaceutical security for Sri Lanka,” he said. “Together, we are combining global knowledge with local capability to strengthen pharmaceutical manufacturing, healthcare resilience and our commitment to serving the Sri Lankan people.” Govindasamy noted that the project represents the largest foreign direct investment into Sri Lanka’s pharmaceutical manufacturing sector to date, with the initial equity capital of US$10 million contributed equally by the two partners. Sunshine Healthcare’s participation has been supported by the International Finance Corporation’s US$11 million equity investment made last year to support the company’s growth strategy. The new manufacturing facility will operate under the oversight of the BOI, with the Ministry of Health and the National Medicines Regulatory Authority providing regulatory supervision. All products manufactured at the plant will comply with NMRA standards and applicable pricing regulations. The investment comes as Sri Lanka continues efforts to expand local production of essential medicines following recent economic challenges that exposed vulnerabilities in import-dependent supply chains. By increasing domestic manufacturing capacity, the partners expect the project to improve medicine availability, strengthen supply security and support the country’s broader healthcare resilience while generating high-value employment and industrial growth. The foundation stone ceremony marked the formal commencement of construction, with both partners expressing confidence that the venture would play a meaningful role in advancing Sri Lanka’s long-term healthcare and manufacturing ambitions. Unlike many local pharmaceutical manufacturers that operate under government buy-back agreements guaranteeing sales to the public health system, Zydus Sunshine Lifesciences will initially rely entirely on Sri Lanka’s private healthcare market. The partners are betting that locally manufactured, high-quality medicines can successfully replace imported products, making the venture commercially viable without state purchase guarantees. However, Sunshine Holdings Deputy Chairman Vish Govindasamy told The Island Financial Review that the company would welcome opportunities to supply the government sector as well, should the authorities choose to procure its products in the future. By Sanath Nanayakkare