The worldwide economic slowdown or recession has impacted the analytical instrument market globally including India. It is an eye-opener to see how much we are dependent on the outsourcing business to India and the exports. In fact the outsourcing to our CRO companies have been severely affected and this has slowed down the purchasing cycle very much. The cost that was being paid for the services have also come down making less money available for instruments purchases.
The new purchases plans are either postponed or shelved thus affecting the analytical instrument business adversely. With the approvals expected for new drugs or generics for Indian pharma industries coming in force, it is expected that there will be more activity in the manufacture of these products and new instruments will be required in the near future. Hopefully the revival of the outsourcing into India will see once again increased business in instruments sales.
The global market of analytical instruments is estimated to be more than $ 20 billion out of which the Indian market is estimated to be $ one billion . Though it is difficult to elaborate here all the instruments that are covered here, it covers the most of that which is being used in the laboratory environment except for the consumables, chemicals, standards, etc. With only a few more days left in 2009, if the global business remains same as in 2008, that itself will be a good news for the industry.
There are several ways to look at this as far as Indian analytical industry is concerned. As far as manufacturing of analytical instruments is concerned, only a few manufacturers have ventured into this area. Some of the instruments that are manufactured are pH meters, Conductivity Meters, Analytical Balances, Gas Chromatographs, UV-VIS and AA spectrophotometers, etc. Many of the analytical instruments are imported into India from various countries and many of the foreign companies are present directly in India or represented by their distributors and agents. As many of the instruments are quite sophisticated, a good support for their installation and maintenance is necessary and the companies are geared well for this most of the time.
The main challenge is to get good experienced engineers as it takes time to develop the skills required. The challenge also is to retain the trained engineers within the organization or the industry as the opportunities in various industries are increasing. Similarly, it is also important to have application specialists with the domain knowledge in order to train the users of these advanced instruments. As the customers do not necessarily get the chemists or operators with the necessary technical knowledge to operate or analyze the results, many a time these become the responsibility of vendors to provide the necessary operation and application training. This is quite different from foreign countries where the customers do not require much hand holding after the instruments are installed. This also brings in an angle where the subsidiary companies or the representatives need to invest in a training facility with instruments and people at exorbitant cost to set up the training facilities. Thus the cost of operation becomes quite high compared to the profit margins that is made in the instrument sales.
India is a country with both agriculture and industry base and both are growing as one can see the GDP growth around seven per cent or more. This is an indicator that the analytical industry also will grow. The demand for high end instruments and regulatory compliances are likely to increase and its likely to attract more and more direct presence of the original manufacturing companies. The Agilent acquiring Varian in the international scenario will necessitate consolidation in all the countries where both the companies have operations. The foreign companies acquiring Indian analytical companies is also happening as in the case of Thermo Fisher Scientific Acquiring the Analytical technologies business of Chemito thus expanding the foot print of the commercial operation and establishing a manufacturing base in India. India is one of the growth markets the foreign analytical instrument companies are looking at and more and more direct investments is likely to happen in the coming years. Though the Indian analytical market has bright prospects, it still has a long way to go before it catches up with the leading players in the developed countries.
What India should try is to make the instruments that are required by our basic industries in good quality and a better price/performance ratio. For example, the major instrument that is sold in India is HPLC, which is a market perhaps more than $150 million. It is a matter of concern that we do not have any manufacturer of HPLC in India. It is not that we need to manufacture the high end HPLC, but at least we can manufacture the low end HPLC that will serve many of the basic chemical and pharmaceutical industries and cater to our educational institutions that give master’s degrees and above and the government institutes that do basic research.
Similarly we must increase the quality and reliability of our instruments that do the trace analysis of water, air, soil, food, etc , there is a large market out there for that. If it happens , in a few years time Indian manufacturers can dominate the lower segment of instrumentation.
India produces the largest number of science graduates, post graduates and doctorates. But it is only at the doctoral level that the research students are coming in contact with the analytical instruments closely. It is important that the university curricula should include the practical trainings on the analytical instruments especially the chromatography and spectroscopy instruments as these are mostly used instruments in various industries. The universities and institutes must also be well equipped in order the facilitate the students to have practical trainings. There should be institutes in the various regions to teach analytical instrumentation and applications, so that there will be a steady stream of experienced personnel to manage the laboratories in India. Our people are very good both in theory and practical and if we can give an opportunity to learn the analytical techniques and applications in the early years, we will be able to create a good pool of skilled people to serve our various industries.
We also need to build good infrastructure with high technology instrumentation in our various academic institutions and these serve as a pipeline to our skilled personnel that will go to our various institutions and industries. We must invest well in our academic institutions that is the nerve of our nation building and one should not always look from a commercial angle. Many of our leading institutions are examples of that and it is a matter of pride that that products from these institutions are spreading all over the world including the analytical industries. Our academic institutions should maintain their high standards of education and research which is fundamental to our industrial growth.
-The author, President, Indian Analytical Instruments Association is presently the Senior Director, Strategic, Business Development, Scientific Instruments
Division, Asia pacific Region, Thermo Fisher Scientific.