Indian pharmaceutical companies are entering aggressively in the US$ 8-billion Brazilian market. Almost all the major Indian companies like Ranbaxy Laboratories, Strides Arcolab, Dr Reddy’s Laboratories, Cadila Healthcare, Wockhardt Ltd, Orchid Chemicals & Pharmaceuticals, Torrent Pharma, Glenmark Pharmaceuticals, Unichem Laboratories, IPCA, etc., have already established subsidiaries for manufacturing or marketing in Brazil.
With several patented products going off-patent in near future, the Indian drug entities are set to tap growing opportunities and investing large funds for establishing there strong foothold. The Brazilian pharmaceutical market is growing at a rate of 30 per cent per annum. Further, Brazil generic market is one of the top ten markets in the world.
Ranbaxy Laboratories is among the top 5 generic companies in Brazil and it is the largest foreign generics pharmaceutical MNC in Brazil. The company has two subsidiaries in Brazil, viz., Ranbaxy Farmaceutica Ltda (70 per cent equity holding) and Ranbaxy Do Brazil Ltda (10 per cent holding). The subsidiaries’ sales in Brazil increased by 37 per cent to US $ 31 million during 2004. With the launch of Contiflo (Tamsulosin) and Cutison (Mometasone) in the branded segment, the total number of brands introduced in Brazil market reached up to five. Ranbaxy is setting up a new manufacturing plant in Sao Gonzalo near Rio de Janeiro to meet the growing demand.
Torrent Pharma, the Rs 470-crore plus Gujarat-based pharmaceutical giant, has set up Torrent do Brasil Ltda during 2002-03 with an investment of Rs 17.79 crore in the equity capital. Subsequently, the company increased its investment to Rs 31.11 crore during 2003-04. The Brazilian subsidiary commenced operations and within its first year of operations, it has introduced 14 products in the market so far. The company achieved sales of Rs 22.56 crore during 2003-04 as compared to Rs 2.42 core in the previous year. However, the company incurred a loss of Rs 4.19 crore mainly due to market developmental expenses.
With the restructuring of its Latin America operations, Strides strengthened its geographical leadership. A semi-solids facility was commissioned in the Vittoria Pharmaceutical Complex to cater to domestic demand. Strides Arcolab Ltd initiated revamping of its business in Latin America during the year ended December 2004 and transferred the investments in Brazilian subsidiaries viz Industria Farmaceutica Brazilera Ltda (Infabra) and Cellofarm Ltda to Goodlanza S.A., Uruguay.
Dr Reddy’s Laboratories, the third largest Pharma company in India with net sales of Rs 1559 crore, has set up a subsidiary Dr Reddy’s Farmaceutica Do Brasil Ltda with an investment of Rs 9.71 crore in the equity capital. The company’s total assets stood at Rs 26.03 crore and its turnover touched to Rs 3.85 crore. However, the subsidiary company incurred a operating loss of Rs 11.46 crore during 2004-05.
Cadila Healthcare, an integrated company with strengths all along the pharmaceutical value chain and global presence, received the approval from ANVISA (the drug regulatory body of Brazil) for its Moraiya formulations factory during 2004-05. The bio-equivalence facility of the Zydus Research Centre was approved by ANVISA and the company is filing the bio-equivalence products.
Wockhardt Ltd, through its subsidiary called Wockhardt Europe Ltd (WEL), has set up a subsidiary in Brazil – Wockhardt Farmaceutica do Brasil Ltda for marketing its biotech products. WFL established 10 per cent business of Wockhardt Farmaceutica at a consideration of US$ 21,055. Besides marketing Wockhardt’s generic pharmaceuticals, this company will enter into marketing arrangements for biotech products with specialized firms.
Glenmark Pharmaeutical, the Rs 525-crore company, is in the process of entering Brazil market. It has acquired Klinger Labs, an ANVISA approved Brazilin company for a consideration of US$ 5.25 million.
The Chennai-based Orchid Chemicals & Pharmaceuticals has set up a subsidiary in Brazil as it is a fast growing market for cephalosporins. The Rs 675-crore Ipca Ltd has invested Rs 3.44 crore in equity capital of its wholly owned Brazilian subsidiary Laboratories IPCA Do Brasil Ltda. The Mumbai-based Unichem has strengthened its international operations by opening up subsidiaries in several countries including Brazil.