The Maharashtra State Chemists and Distributors Alliance Ltd (MSCDA Ltd), the pilot project of All India Organisation for Chemists and Druggists (AIOCD) set to foray into the retail pharmacy business on the same footing with the organized retail pharmacy. The company is envisaged to be operational by October 2007. The launch of MSCDA Ltd will trigger AIOCD's efforts to fight back the upsurge of organized retail business by big corporates.
The plan of AIOCD, the largest pharmaceutical trade organization in India with around 5.5 lakh members all over the country, is to initiate companies in all the states through its state level affiliates, similar to the MSCDA, which anchors the pilot project.
The increasing presence of organized retail chain stores, ranging from small scale companies that operate in one or two states to the multi national tycoons like Wal Mart to be entered into the Indian market soon, in the new era has compelled the traders to change themselves, the office bearers of MSCDA comments. "We are sure that with our reachability, experience and basic infrastructure, which already in place from urban to rural area, will help us to compete with these giants in pharma market. More over, we are able to compete them in the FMCG and other markets with our strengths, if needed," said Anil Navander, general secretary, MSCDA.
The MSCDA has designed a plan to complete the first round of talks with the manufacturing companies by mid July, to sign agreements in August and to begin the operations by October this year. It has also plans to negotiate with the top 20-pharma manufacturing companies in the country, including the MNCs. With around 90 per cent of the total pharma distribution channel in Maharashtra, the MSCDA has a strong hold in the market, unlike the other organized players, he averred.
According to J S Shinde, president, MSCDA and secretary of AIOCD, MSCDA Ltd is expected to do Rs 7200 crore business in a year in Maharashtra, reflecting an 80 per cent of the Rs 9000 crore total drug market in the state. He said that the state branch is expected to touch Rs 600 crore business by 2008-09 fiscal. MSCDA Ltd is coming up with an investment of Rs 50 crore, in which Rs 35 crore has been collected as equity capital and Rs 15 crore as preferential share capital. The financial working capital for MSCDA Ltd will be provided by Bank of India.
The company has already commenced operation of its retail chain company Green Cross Healthcare Pvt Ltd. All Indian Origin Chemists and Distributors Alliance Ltd (AIOCD Ltd), the parent company is currently in talks with the top 20-pharma companies to finalise distribution alliance and is planning to float the company by signing an agreement with four to six companies initially.
Apart from these, more regional trade organistions are planning to initiate organized retail chains. A group of retail chemists in Mumbai got together and formed a society with guidance from North East Zone Chemists Association (NEZCA) to launch a chain of retail pharmacy outlets in Mumbai.
Meanwhile, the competition between organized retail chains is increasing, as more corporates are planning to enter into the race and the existing players are rolling out more outlets to cover a vast area and a variety of consumers in the country. Companies like Apollo Pharmacy, under the healthcare conglomerate Apollo Group of Hospitals, Fortis Health world, promoted by Ranbaxy, Medicine Shoppe, the Indian outlet of the MNC giant and players like Subhiksha and Medplus are planning to open more retail outlets, even as the Reliance Anil Dhirubhai Ambani Group (ADAG) is planning to set their business in the distribution network also.
It is to be noted that most of these companies are planning their operations to be established well in Mumbai, the financial capital of India. The increasing competition in the sector has resulted in retail shops coming up with sops, including health check ups, reminder calls, discount cards and online doctor appointments. The players are cautious enough to survive in this highly competitive and highly sophisticated market situation, seems to be good for consumer, says market analysts.