The Bulk Drug Manufacturing Association (India), since its inception in 1991, has been tirelessly fighting for the welfare of bulk drugs and formulation industry in Andhra Pradesh. Head-quartered in Hyderabad, during the past two decades, the association has been acting as an intermediary between the government and the industry, catalysing the growth of the industry. Currently the association is in talks with the government and regulatory bodies like the Drug Control Administration and the Pollution Control Board for lifting the ban on expansion and for providing hassle free approvals for products.
Capt. V.V.S.K Shastry, Asst. Secretary General, while giving a tour d'horizon of the bulk drug industry in the state to A Raju, dwells on the burning issues taken up by BDMA with the state and central governments for the benefit of the industry.
Please give a brief about the present scenario of the bulk drug industry in Andhra Pradesh?
There are about 200 bulk drug units and 530 formulation units, including SMEs in the organized and unorganized sectors in Andhra Pradesh. The majority of industries are located in Hyderabad, Ranga Reddy, Medak, Nalgonda and Mahboobnagar Districts. The Jawaharlal Nehru Pharma City has been established in Visakhapatnam.
The commissioning of IDPL in Hyderabad in 1967 and the efforts of the entrepreneurs, thereafter, has resulted in the spread and growth of the industry in Andhra Pradesh. Today, Hyderabad is referred to as the Bulk Drug Capital of India.
Where does AP stand in bulk drug production and how do you view the export prospects?
The production of bulk drugs and formulations have increased from 28,075 crores in 2008-09 to Rs.45,256 crores in 2011-12, an annual increase of about 20 per cent .The exports from A.P. during 2011-12 were to the tune of Rs22,628 crores out of total exports of Rs.64,193 crores from the country. Thus A.P. contributed to 35 per cent of total exports from the country.
What are the significant issues impacting the growth of the industry in AP?
The acute power shortage is one of the major factors which is crippling the industry in the state during the past three to four years. The impact of GATT-TRIPS agreement on pricing of pharma products has also impacted the exports. The presence of more unorganized players than the organized ones is also another issue which is impacting the industry. Low-cost countries like China and Israel are also affecting the demand for pharma products from the state. The entry of foreign players with well-equipped technology based products is another threat being faced by the domestic industry.
As the industry is dependent on China for API imports, how do you look at the perceived threat by the Chinese in future?
The pharma companies in AP are manufacturing the maximum number of APIs. Though China is a major competitor, we have requisite capabilities to withstand the competition through up-gradation of technology, innovation and R&D. Out of the 170 USFDA approved facilities in the country, 1/3rd are located in A.P. which is a testimony to the quality of our products and compliance with the international standards. The Government incentives and favourable policy decisions play a vital role.
How do you see the infrastructure availability in AP compared to other states?
The acute power shortage in the state has adversely affected the growth of the industry over the past few months resulting in high costs and diminishing margins. While there is no dearth of skilled work force, the availability of infrastructure and water continue to pose problems. We are hopeful of tiding over these difficulties with the support of the Government.
How do you look at the translocation of pharma units to others states in the north and north east to avail of incentives offered by them?
Of late some of the pharma units from AP have moved to others states in the north and north east to avail incentives offered by them.
The ban imposed by the state government on the expansion of existing units and establishment of new units in notified locations would have probably resulted in the relocation of certain units. We look at the issue only as a temporary phase. We expect the Government to encourage the industry through various incentives so that A.P. could continue with its top position.
How do you view the government support for the industry in AP?
In order to encourage the industry, the Government should ensure that the incentives declared under different schemes are actually implemented on time. While a lot needs be done to ensure uninterrupted power supply to the industry, there is an urgent need to improve the infrastructure. Over and above, the government should allow the industry to expand and also set up new units.
Could you please comment on drug control regulations in Andhra Pradesh? What should be done to expedite the approval process?
Drug Control regulations are necessary to ensure quality of drugs and prohibit entry of spurious drugs in the market. The industry has to comply with the regulatory norms but at the same time the regulator has to simplify the procedures to help the industry to implement these norms for a win-win situation.
How do you view the industrial pollution in the state? What are the new technologies being adopted by the bulk drug industry to minimise the polluted effluents?
Andhra Pradesh topped Environmental Performance Index (EPI) during 2012 for adopting best green practices to maintain quality of air, water and forest cover. Effluent treatment plants and solid waste management plants, using the latest technology have been established in the state for disposal of waste, in a scientific manner, under the supervision of State Pollution Control Board.
All major API companies have invested heavily on technologically advanced systems, viz., strippers, multi effect evaporators, Bio-ETPs, reverse osmosis systems etc in waste water management and achieved zero liquid discharge or zero process liquid discharge.
What are the significant issues BDMA has been taking up with the Pollution Control Board, DCA and the state government during the past one year?
We continuously interact with APPCB and update them on various steps initiated by the industry to comply with the Govt. directives on pollution control measures.
BDMA (I) in association with the DCA, initiated the process for implementation of online licensing system and contributed an amount of Rs.15,00,000 for the same.
State Govt: Lifting the ban on expansion of existing units and setting up of new units, acute power crisis crippling the industry, export incentives, notification of Industrial areas / parks, shifting of Industry outside ORR, formation of chemical zone etc.
Could you please highlight some of the significant achievements of BDMA in enhancing the interests of the industry during the past three years?
BDMA has played a vital role in resolving the issue of imposition of heavy fine by the APPCB and many companies have shown satisfaction with our efforts. The Association was successful in its endeavours to get many long pending CFOs and CFEs cleared from APPCB in respect with some of the member units of Nalgonda Drug Manufacturers Association.
Some of our major achievements are:
- Arranging number of long pending environmental clearances from the Central Government in respect of many companies.
- Arranging commissioning of 18 KM pipeline from Patancheru Enro-Tech Ltd (PETL) to Amberpet Sewerage Lines which was delayed by the authorities for more than two years.
- Acquiring 2 ½ acres of land from APIIC for construction of Association’s own building.
- The Association took several initiatives in co-ordination with the Ministry of Finance, Ministry of Commerce, Department of Pharmaceuticals and other State and Central Government departments on various issues / subjects.
- The Association had also submitted Pre-Budget Memorandum, suggesting some changes in the customs duty structure, excise duty structure and simplification of procedures etc.
BDMA (I) also actively participated in the deliberations of different sub-groups of the Working Groups of Twelfth Five Year Plan.