The Indian pharma industry has gained significant traction in the last few years. It is currently on a high growth trajectory and is rapidly integrating with the global industry. This integration has opened up tremendous opportunities for Indian pharma across all segments including generics, research and development of New Chemical Entities (NCE) and Contract Research and Manufacturing Services (CRAMS). Indian companies are now poised to explore these opportunities as they adopt effective and efficient business models that are spread across one or more of these segments.
Alembic Chemical Works Co. Ltd., one of the oldest pharma companies in India, was set up in Vadodara in 1907, just six years after India’s first domestic pharmaceutical unit- Bengal Chemical and Pharmaceutical Works was set up in Calcutta. Sarabhai Chemicals was started soon thereafter. The industry had received strong support from the academic field. In 1940, the Drugs Laboratory in Vadodara was established, followed by LM College of Pharmacy. Further in 1989, the B. V. Patel Education Trust, Ahmedabad and Gujarat Branch of Indian Pharmaceutical Association (IPA)- established the B.V. Patel Pharmaceutical Education and Research Development (PERD) Centre in Ahmedabad. In the last few decades, the invested capital to labour ratio has risen significantly. The employment has almost doubled between 1979-80 and 1997-98. Over the years, the industry has developed strong linkages with related sectors and industries such as chemicals, pharma machinery, information technology, etc.
There are currently approximately 3,500 drug manufacturing units in Gujarat. The state houses several established companies such as Torrent Pharma, Zydus Cadila, Alembic, Sun Pharma, Claris, Intas Pharmaceuticals and Dishman Pharmaceuticals, which have operations in the world’s major pharma markets. Over the last few years, Gujarat’s contribution to the growth of India’s pharmaceutical industry has been significant. The state commands 42 per cent share of India’s pharmaceutical turnover and 22 per cent share of exports. Approximately 52,000 people are employed in Gujarat’s pharmaceutical sector, which has witnessed 54 per cent CAGR in capital investments over the last three years.
In order to cater to the huge demand in the global & domestic markets, the pharmaceutical industry needs to have all kind of machineries to manufacture medicines from various formulations. Gujarat being a dense territory and hub for pharma companies, the pharma machinery companies started emerging within the industrial belts of Gujarat like Vadodara, Ahmedabad, Vatva, Sanand etc.
The pharma machinery industry today adheres to all international norms and regulations due to which the pharma companies in Gujarat has several USFDA, UK MCC, WHO GMP, EU GMP etc approved plants.
The Indian pharmaceutical industry is now being acknowledged as a global outsourcing hub rather than merely a generic drugs market, possibly due to its low-cost manufacturing, high-quality research & manufacturing facilities and highly skilled personnel.
Gujarat pharmaceutical machinery manufacturers today have devised their own technology and have also ventured into the field of technology transfers with various international players, so as to keep pace with the changing technology to increase levels of automation and gaining international standards.
The huge pharma industrial belt within Gujarat has opened up big opportunities for the small scale engineering companies to provide machineries to these pharmaceutical companies whereby many small machinery manufacturers have mushroomed to cater to the needs of various kinds of pharmaceutical companies over a period of time.
Growth in the advancement and upgradation of technology in machinery has been fast in India. With almost low technology offerings in the initial stage, the Indian pharma machinery industry, particularly from Gujarat today is considered as one, that can offer value-added engineering with integration of new technologies.
There is a strong local and global opportunity for Gujarat in the manufacturing of pharmaceutical machinery, given its strong and well established engineering sector.
According to industry estimates, approximately 30 per cent of India’s pharmaceutical machinery is produced in Gujarat. The strong growth prospects of the pharmaceutical exports segment and growing demand from the domestic market, will further fuel growth in the pharmaceutical machinery sector. However, Gujarat’s engineering sector especially the pharma machinery manufacturing segment is highly fragmented.
Due to the highly fragmented nature, there is a dearth of pricing power and critical scale. This in turn restricts the ability to produce the technology-driven products required for operating in global markets. The pharma machinery manufacturing industry in Gujarat needs to consolidate and synergise the skills and complementarities available in the broader engineering sector (like the CNC machine tools industry) to be able to create world-class players with the scale and resources required, to tap the global as well as local demands.
As Gujarat’s dominant position in India’s pharmaceutical sector is well known, the next logical step is to aspire for global leadership in the industry.
Gujarat has been the second largest pharma machinery manufacturer of India. It covers 30 per cent of the Indian pharma machinery market. Gujarat companies have transcended domestic boundaries and explored international markets and in particular the US and European countries. However, Gujarat companies are now shifting focus and foraying into new under-served and emerging markets in America, Africa, Australia, Russia, Japan and CIS nations.
(Courtesy:Indian Pharma Machinery Manufacturers Association(IPMMA))