Horlicks, the main product of GlaxoSmithKline (GSK) Bangladesh Limited, has run out of steam with sales falling by 23 percent in the last seven years.
The poster child of the British pharmaceutical giant has now been replaced by its oral care product Sensodyne toothpaste, sales of which rose by 1,062 percent during the same period.
GSK Bangladesh Chairman Masud Khan said that a drop in popularity of Horlicks jars led to the fall in sales. The demand for Horlicks mini-packs, however, are increasing across the country.
But a senior executive of the company said that some corrupt businessmen are bringing in the nutritional drink from India and selling it in the local market.
"This is hurting Horlicks sales in Bangladesh. A complaint has been filed with the National Board of Revenue in this regard," the official added.
During the last seven financial years, the sales of Horlicks fell to 7,395 tonnes – the current market value of which stands at Tk404 crore.
Sales of Sensodyne during the same period rose to 41.70 lakh tubes, amounting to Tk43.31 crore in market value.
In the 2013 financial year, GSK Bangladesh sold 3.59 lakh tubes of the product.
However, Sensodyne toothpaste is not produced in Bangladesh. GSK Bangladesh imports the oral health care product through Burroughs Wellcome & Co (Bangladesh) Ltd.
Despite the fall in sales of Horlicks, however, GSK still continues to lead the health food drinks category in Bangladesh with a 91.8 percent market share, according to a study by Nielsen.
In 2019, the sales of health food drinks in Bangladesh was valued at Tk410 crore, the study added.
But Unilever Overseas Holdings BV is set to buy a stake in the nutritional drink business of GSK Bangladesh through purchasing 98.75 lakh shares of Setfirst Ltd – a sister concern of the pharmaceutical giant.
GSK Bangladesh was listed with the Dhaka Stock Exchange in 1976. The latest price of each share of the company stood at Tk2,046 at the premier bourse.
Earlier on December 3, 2018, Unilever NV declared that it would buy shares of GSK Bangladesh.
However, Masud Khan told The Business Standard that instead of Unilever NV, Unilever Overseas would buy the shares now.
"Both organisations are sister concerns of Unilever. And multinational companies do not buy shares directly. However, no decision has yet been made on how the transaction will take place," he said.
The British multinational company shuttered its 60-year-old pharmaceuticals business in Bangladesh in 2018. The pharmaceuticals unit, based in Chattogram, was facing losses. To prevent any more losses, the company's board decided to bring down the curtains on the business.
After shutting down the pharmaceuticals business, GSK made a profit of Tk98.57 crore in the last financial year. It also recommended a 530 percent cash dividend to shareholders.
"The company made a strong comeback and started making profi¬ts again after discontinuing its pharmaceuticals business," said Masud, adding that its earnings per share of Tk81.83 last year were the highest in GSK Bangladesh's history.
"It validates the decision to shut down the pharmaceuticals business."