Thanks to the buoyancy in the domestic pharmaceutical manufacturing segment and the ability of the Indian machinery manufacturers to imbibe latest technologies and penetrate newer world markets have helped the Indian pharma machinery makers to prosper their business from strength to strength in the last few years.
The buzz was kick started with the Central Government's mandate to the pharmaceutical units to adhere with the revised Schedule M norms by 2003, which was later extended up to 2005.
Now, most of the players in the roughly estimated Rs.750 - Rs.1200 crore odd pharmaceutical machinery market spread into various segments, is cashing in on the business opportunity in the excise free zones of Himachal Pradesh, Jammu & Kashmir and Uttaranchal, where more than 300 formulation units are coming up. Most of the leading machinery manufacturers are even struggling to meet delivery schedules, and as a result are expanding their manufacturing capacities with new CNC machines and other hi-tech infrastructure.
Sources estimate business in the domestic market has grown by 15 to 20 percent in the last year and the trend will continue the same way for another few years. Some sources predict this live-wire activity in the pharma field will continue for another ten years, assuring good business for the domestic players. These units will launch new products and expand their facilities in near future, which will necessitate more upgraded machinery. Once, places like Baddi get saturated with units, the buzz will shift to J&K and Uttaranchal, they estimate.
The government's decision to extend tax sops offered to hill states by another three years until 31st March 2010, has assured to continue exodus of more units to these regions. Further, the Central Board of Excise and Customs (CBEC) had recently clarified that all new drugs introduced from the tax exempted manufacturing facilities of these states after the exemption deadline would be considered taxable. The industry will nowhave three more years for capacity expansion and production diversification, as the same clause will be applicable only to the products that receive marketing approval after March 31, 2010.
Sources point out that the Indian pharmaceutical companies always prefer domestically manufactured machinery than the imported ones due to their easy adaptability, cost and user friendliness, latest design & technology, and above all better after sales services. The Annual Maintenance Contract (AMC) on Indian machines is comparatively very low as against the high AMC costs for imported machinery. Most of the leading manufacturers like Cadmach, which has more than 40 percent of its turnover coming from overseas markets, make machines that are of the same quality or even superior to that of any overseas manufacturer.
While the global pharmaceutical industry, including the domestic industry, is emerging as an industry that requires high level of technological precision, the machine manufacturers are also upgrading their manufacturing capabilities and technical skills to meet the demands of the pharma companies. Proper validation of the products is a must in the new drug-manufacturing environment, and this requires precision in technology with advanced features. In the last few years, the Indian machinery manufacturers have been traveling abroad and have been visiting machinery exhibitions like Interphex to know the latest developments happening in the industry.
Indian pharmaceutical machinery manufacturers have also realized the importance of setting up CNC machines to get quality output and are adding new features like VFD, PLC etc. to their machines. Further, the manufacturers are now stressing on getting quality certifications like ISO approvals and improved manufacturing environment. Many manufacturers have set up imported prototype machines with CF approvals. Further, collaborations and technology transfer from established players in Europe and US are also taking place in the domestic machinery-manufacturing segment. Compliance to CFR21, Part 11 and investing in HRD by taking professional to meet the challenges of international market are also emerging trends in the Indian pharma machinery-manufacturing segment.
As a result, many of the leading machinery manufacturers have entered the regulated markets in developed countries. Several Indian players now sell their machinery to units coming up in places like Australia, New Zealand, Spain, Norway, Sweden, Finland and in some semi-regulated markets like Latin America, Malaysia, Thailand and Indonesia.
However, this industry is yet to consolidate itself as an organized industry. According to Ratan Singhania, secretary of the Indian Pharma Machinery Manufacturers Association (IPMMA), there are about 800 players in the pharmaceutical machinery-manufacturing segment in India, in different parts of the country and about 200 of them are IPMMA members. Since majority of the units are privately held firms and are akin to divulge their business details due to market reasons, it is difficult to comprehend exact data on the industry. Nevertheless, the industry is sure to prosper by at least 5 to 10 percent in the forthcoming years, he predicts.