Karnataka pharma industry is quite optimistic about the export prospects in fiscal 2010-11. The state is hopeful of generating earnings of about Rs. 2,000 crore as against Rs. 1760 crore in March 2009-10. The factors driving the confidence of exporters from the state are the growing demand for a range of products, profitable opportunities in newer markets and the US Healthcare Bill which is likely to push up demand for high quality,low cost generics.
The state which is known for its high quality standards has not been impacted by any of the issues such as the problems encountered by Indian generic drug manufacturers in European Union or blacklisting by Nigeria government or ban by Sri Lanka on sub-standard medicines from the country.
Even during the recession in 2009, pharma exporters from the state have been able to sustain growth momentum. Karnataka pharma export earnings constitute about 6.5 per cent of the total exports of the country which is pegged at Rs. 30,000 crore, according to Karnataka Drugs and Pharmaceutical Manufacturers Association.
The leading exporters in the state include Strides Arcolab, Biocon, Bal Pharma, Shilpa Medicare in Raichur, RL Fine Chem, Medreich Sterilabs, Micro Labs, Global Calcium, Lake Chem, Natural Capsules, Anglo French, Group Pharmaceuticals Ltd, Juggat Pharma and Karnataka Antibiotics & Pharmaceuticals Ltd (KAPL).
According to the Federation of Indian Chambers of Commerce and Industry (Ficci), while pharmaceutical exports are expected to record a 16 per cent increase in 2009-10, several other sectors anticipate negligible growth or shrinking of exports.
As there is ample scope for the state pharma industry to generate more forex revenues,more units should now gear up to tap international markets, says Dr. BR Jagashetty, Karnataka Drugs Controller. The state drugs control department is also seeking support of the Karnataka government to set up a dedicated pharma special economic zone and a pharma park to ensure the sector can maximize its inherent strengths of quality, skilled personnel and gain international recognition for its contract manufacturing capability , Dr. Jagashetty adds.
According to Dr. Jagashetty, the need of the hour is an SEZ for pharma sector which will be free of regulatory hurdles and speed up exports. Though the state already has a SEZ in Hassan district, the distance of over 200 kilometressss is posing to a major logistics problem primarily because most of the pharma companies are located in Bangalore and its industrial areas like Bommasandra, Veerasandra and Peenya. Companies are looking at faster and easy access to airlift the drugs. Therefore, we are scouting for a location in and around Bangalore to set-up an SEZ and a pharma park, he added.
The state is known for its high quality standards and companies here are much-sought after in the international market. This is the biggest strength of the companies in the state. For companies here, exports account for almost 40 to 80 per cent of their earnings and for dedicated export oriented units ,it is cent per cent, said Anjan K Roy, president, Karnataka Drugs and Pharmaceutical Manufacturers Association (KDPMA) .
KDPMA has also initiated talks with Pharmexcil to set up an office facility in the state. While these positive moves, pharma industry exporters are requesting the state government to improve the infrastructure which includes roads and power. The unscheduled power cuts are hampering deadlines which are being maintained with much difficulty, said Roy.
This year we could see a 20 per cent rise in exports. This is because E-7 countries such as Brazil, Russia, China, Mexico, Turkey and Indonesia are now showing interest in Indian formulations. Companies should plan their marketing strategy to increase presence in these regions, said K Vengarai, pharma consultant.
The global economic slowdown has not impacted the pharma industry. The slowdown was partly due to control on inventories, however this has not lasted long hence pharma exports are back again, said Archana Dubey Mitra, Associate Vice president , exports, Bal Pharma Ltd.
"We are not aware of the propaganda against generic drug exporters and the strategy of blocking Indian generic exports to African and Latin American countries. India is an emerging market in the international pharmaceutical business. The companies with strong strategies, quality products and good GMP practices can take on giants in the world market. What is noticed in Latin America or other world markets had been earlier in the US and regulated markets. But Indian companies have successfully entered the markets and proved their mettle. Now we have more USFDA approvals in India than any other country. Future is only for companies who follow systems", added Ms. Mitra.
According to Jatish N Seth, secretary, Karnataka Drugs and Pharmaceutical Manufacturers Association, export earning are poised to rise. Much of the issues faced in EU, Nigeria and Sri Lanka could perhaps be on account of stiff competition. The field is open and only the fittest will survive the competition. Karnataka companies have proven their mettle and were able to tap newer markets when some countries proved unviable. However the companies may keep away from regulated markets because of long gestation periods in payments and approvals. They are more inclined to tap emerging markets or strengthen existing presence in these regions.
The government should stimulate investments to intensify exports. During the challenging times there was a tendency for some countries to adopt protectionist measures and reduce imports. The need of the hour is to bolster growth. There are many drugs off-patent for which generic companies have filed applications for product approval or commenced marketing generic equivalents. This makes Karnataka pharma upbeat on garnering export opportunities, said Jatish.