As the pharmaceutical sector suffers due to widespread workers' unrest, labour unions emerge to be an important facilitator in efforts to quell the tension.
While many companies have still been struggling to return to operations nearly a week after the shutdown of factories in fear of violence and vandalism, Square Pharmaceuticals said it had already reached a consensus with protester workers.
The quick settlement of the demands, said the leading drug maker, has been possible because of the presence of workers' unions in its production units.
Drug manufacturers are reluctant to allow trade unions in their factories because of many union leaders' affiliation with political parties, said Muhammad Zahangir Alam, chief financial officer (CFO) of Square Pharma.
"Political parties must ensure that they won't use unions for political leverage," he added.
Talking to The FE, Shoaib Ahmed, a worker of Square Pharma, said workers had been provoked by outsiders into violent demonstrations with demands for salary hikes, medical allowance, and better-quality food.
"We have realised our mistakes. Our management has agreed to fully meet our demands. Many workers apologized to the management today [on Saturday] for their misbehaviour," said Mr Ahmed.
A senior official of Square Pharma said trade unions were allowed by the company in the 1980s under the labour law.
Review of workers' wages
A board had been constituted by the immediate past government to review the wage structure in the pharmaceutical industry and increase the minimum wage of workers.
Then the student-led uprising in July and the subsequent change in the political landscape on August 5 halted the process to revise the wage structure. Weeks later, workers of drug manufacturers took to the streets.
Representatives of several companies told The FE that workers made irrational demands, such as all workers be made permanent six months after the joining, they cannot be terminated, and wages be increased by 25 per cent every year.
In some cases, workers demanded removal of some top-level officials.
These are signs of alarm for the industry, said a top executive of ACI Pharmaceuticals, which has already achieved self-reliance as about 98 per cent of the local demands are met by domestic producers.
Speaking of concerns tied to the demands, Square Pharma said it required certification from drug regulators of different countries, including the USA, for exports.
"Those regulators visit the company's factory rigorously and interview workers. The company's certification will be questionable if a worker becomes permanent before gaining necessary skills," said CFO Zahangir Alam.
He, however, said the management and workers of Square Pharma had negotiated a deal.
Challenges to negotiate settlement
Most other companies are still in disarray.
If the production at the factories of drug makers is hampered, it would cause supply disruptions, which will ultimately push up drug prices in the local market.
The situation at the factory of Healthcare Pharmaceuticals is worse than others.
Five top officials have been forced to resign amid workers' pressure. Now, other officials are unwilling to join work, having been subject to a hostage situation and felt humiliated.
Chief Executive Officer Md. Halimuzzaman said workers had been given two days' time to reach an agreement.
"Our factory is non-functional and we will have to close it if workers cannot come to an agreement."
Initially, workers placed a seven-point demand, including an increase in the minimum wage, and Healthcare agreed to that.
Later, different sets of demands were placed.
On the role of the government and law enforcement agencies, Mr Halimuzzaman said the drug makers were assured only of containment of violence.
"We have been advised to settle the problems, sitting with workers. But the solution is quite difficult to attain as separate groups of workers are coming forward with different demands."
Mr Halimuzzaman also said that workers demanded that they be allowed to form trade unions at the factory.
"We can accept the demand [for permission for trade unions]. But workers already avail of benefits in line with the labour law."
The production at Healthcare Pharma has remained suspended for the last five days.
According to the Directorate General of Drug Administration, there are currently 295 drug manufacturing companies in Bangladesh. The current market size is Tk 300 billion annually. Medicines produced in Bangladesh are exported to 157 countries, fetching around $200 million in revenue per year.
About 16 large companies, including Square Pharma, Beximco Pharma, Incepta, and Healthcare Pharma, have witnessed workers' unrests leading to a full or partial suspension of production.
CFO Zahangir Alam, of Square Pharma, said workers should consider increasing production so that the cost burden eased with the rise in wages.
After the hikes in workers' wages, salaries of those of the upper-tiers of the workforce will also have to be revised up, he said. That will drive up production costs by more than 2 per cent, bringing down profits by up to 10 per cent.
"Manufacturers should be given the scope of transferring the additional cost through price adjustments and export incentives," said Mr Zahangir Alam.
Meanwhile, companies expressed concerns, saying essential drugs have a life cycle and those are not stored for longer than 10-15 days.
A shortage of essential drugs is likely if the unrest continues, they say.
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