Pharmaceutical export from India continues to register steady growth especially to regulated and emerging markets despite the current financial crisis in most of these economies. A Pharmabiz study of 25 top listed pharma companies with exports above Rs. 300 crore shows that they clocked a total export revenue of Rs. 47,446 crore during the year ended March 2011 as compared to Rs. 41,355 crore in the previous year, representing a growth of 14.7 per cent.
These companies have set up strong marketing and manufacturing network in the US, Europe, Japan and also in emerging markets by way of acquisitions, tie-ups investments in subsidiaries or joint ventures.
The study shows that the contribution of international revenue in consolidated net revenue improved to 64 per cent from 63.2 per cent in the last year despite challenging conditions there. The consolidated net sales, including domestic and international markets, of 25 leading companies touched to Rs. 74,195 crore during the year ended March 2011 as against Rs. 65,469 crore in the previous year. These 25 companies are controlling large market share of Indian pharmaceutical segment.
Besides these listed 25 major companies, there are several unlisted companies like Matrix Laboratories, Cadila Pharmaceuticals, Intas Pharma, Alkem Laboratories, Actis Biological, Mankind, Micro Labs, Serum Institute, Advinius, Unimark, Paras Pharmaceutical, etc., which are also contributing significantly to export earnings. For instance, Matrix Laboratories, now subsidiary of Mylan Inc., has notched up international revenues of Rs. 2,608 crore during 2010-11 as compared to Rs. 2267.67 crore in the previous year, which worked out to almost 81 per cent of its consolidated net sales of Rs. 3,219 crore.
Ranbaxy Laboratories, a subsidiary of Daiichi Sankyo of Japan, has successfully clinched top spot with international sales of Rs. 6,772 crore during the year 2010-11 as compared to Rs. 5,657 crore in preceding year. Dr Reddy's Laboratories (DRL) went down to second rank as its international sales increased only by 4.3 per cent to Rs. 5,941 crore from Rs. 5,696 crore in the previous year. Lupin registered strong growth of 20.3 per cent and grabbed third spot with international sales of Rs. 3,983 crore. Cipla and Sun Pharmaceutical climbed to fourth and fifth rank respectively with international sales of Rs. 3,361 crore and Rs. 2,898 crore during 2010-11. Wockhardt, which was at third place in 2009-10, lost heavily and went down to 7th rank with sharp declined in international sales by over 19 per cent to Rs. 2,710 crore as against Rs. 3,360 crore in the previous year.
Panacea Biotec has recorded highest growth in international sales of 94 per cent to Rs. 610 crore from Rs. 315 crore in 2009-10. This was followed by Cadila Healthcare with growth of 91.5 per cent to Rs. 2,289 crore in 2010-11 from Rs. 1,195 crore. Sun Pharmaceutical achieved significant growth of 41.5 per cent and Neuland Laboratories also marked growth of 41.2 per cent in international sales. Other major growth drivers were Stride Arcolab (growth of 36.6 per cent), Divi's Laboratories (36.3 per cent), and Ind-Swift Laboratories (36.2 per cent). Lupin, IPCA Laboratories, Plethico Pharmaceutical and Glenmark Pharmaceutical notched up growth of over 20 per cent in international sales. However, Wockhardt, Orchid Chemicals, Jubilant Lifesciences, Aurobindo Pharma and Dishman Pharmaceutical reported dismal performance with very low international sales.
The international revenues as percentage of consolidated net sales of several companies from the Pharmabiz sample of 25 companies were over 75 per cent during 2010-11. The international revenues as percentage of consolidated net sales of Ranbaxy, DRL, Biocon, Stride Arcolab, Shasun Chemicals, Plethico Pharma, Divi's Laboratories and Neuland Laboratories worked out to more than 75 per cent. Stride Arcolabs' international revenues as percentage of net sales reached at 96.6 per cent in 2010-11 as compared to 91.9 per cent in the last year. Its consolidated net sales jumped by 30 per cent to Rs. 1,696 crore from Rs. 1,305 crore and it recorded international revenues of Rs. 1,638 crore. Out of 25 companies, 21 companies recorded the percentage of over 50 per cent in respect of contribution of international revenues in consolidated net sales.
These companies are mainly focusing on US, Europe, Brazil and also established presence in Japan and China as well s several emerging markets. Ranbaxy's sales in US increased to Rs. 3,034 crore during 2010-11 from Rs. 1,958 crore and that of DRL went up to Rs. 2,256 crore from Rs. 2,085 crore. Cipla recorded 23 per cent growth in US and 14 per cent in Europe. Strides sales in US and Europe went up sharply to Rs. 570 crore from Rs. 268 crore. Similarly, Lupin's sales increased to Rs. 2,046 crore in US from Rs. 1,706 crore.
Sun Pharma recorded 104 per cent in US sales to Rs. 2,254 crore from Rs. 1,106 crore. Though Wockhardt's sales in US increased to Rs. 1,074 core from Rs. 718 crore, its sales in Europe declined to Rs. 1,421 crore from Rs. 1,759 crore. Jubilant Lifesciences' sales in China declined to Rs. 327 crore from Rs. 371 crore. Lupin's sales in Japan increased to Rs. 626 crore from Rs. 534 crore and that of Cadila Healthcare Rs. 42.2 crore.
The standalone export performance, without taking into consideration of subsidiaries, joint ventures or associated firms, of the Pharmabiz sample of 25 companies also reviled that Indian pharma companies have stepped up there presence in the international markets during 2010-11. The standalone net sales of 25 companies increased by 12.4 per cent to Rs. 50,294 crore from Rs. 44,745 crore in the 2009-10 and there exports on FOB basis increased by 16 per cent to Rs. 27,576 crore from Rs. 23,782 crore in the previous year, contributing 54.8 per cent to standalone net sales as against 53.2 per cent in last year. The imports on CIF basis of these companies increased by 12.1 per cent to Rs. 9,587 crore from Rs. 8,556 crore. Thus these companies are generating valuable foreign exchange for India.
On standalone basis, DRL remained on top with exports of Rs. 3,672 crore and was followed by Cipla (Rs. 3,361 crore), Ranbaxy (Rs. 3,360 crore), Aurobindo Pharma (Rs. 2,697 crore) and Lupin (Rs. 2,523 crore). Divi's Laboratories' exports as percentage of standalone net sales worked out to over 90 per cent and that of DRL, Shasun Chemicals, Stride Arcolabs and Neuland Labs worked out to over 70 per cent. The exports on FOB basis of few companies like Orchid Chemicals, Wockhardt, Stride Arcolab, Dishman Pharmaceutical and Plathico Phama declined during 2010-11.
The multinational pharma companies like GlaxoSmithKline Pharma, Pfizer, Abbott India, Novartis India, AstraZeneca Pharma, Merck, Wyeth are focusing on domestic market and there exports are negligible as compared to there revenues. However, Ranabxy Laboratories, Fresenius Kabi Oncology (formerly known as Dabur Pharma) and Aventis Pharma stepped up operations in international markets.
The contribution of consolidated net sales of these 25 companies worked out to 71 per cent of Pharmabiz study of 100 companies. These companies are well set to tap patent expiration opportunities in the coming years. With such a large exposure to international market, the recessionary economic conditions in highly regulated markets, cost cutting measures adopted by several western governments and adverse foreign exchange will be the key deciding factor for stability and future growth of Indian companies in international market.
International sales on consolidated basis and Export Earnings of 25 Pharma companies Table