Rising awareness on the need for strictly adhering to global standards in Good Laboratory Practices has catapulted the lab chemicals and equipment industry to heights in India. The leading players in this segment have already spruced up their strategies to gain a competing edge in the global scenario betting that they would never compromise on quality standards.
If the growing interest in GLP norms have contributed to the superior quality of standards of the chemicals, reagents and devices used in the laboratories, it is, of course, the new patent regime and the subsequent thrust in the research and development activities across the pharma and biotech industry that has facilitated the unprecedented growth in the segment.
India's proven skills in technology innovation has helped tremendously to produce such chemicals and equipment at a far lower price than what is available in the international markets without diluting the quality. In short, there is a genuine effort to market high quality stuff with a price tag that could hardly be found anywhere else in the world.
Easy -to-avail technological know-how and expertise of skilled professionals have enormously helped the Indian lab equipment sector to gain recognition beyond its borders. ``India has the second largest pool of scientists in the world and this was the main reason for Thermo to increase its activities in India,'' averred Dr.Marijin Dekkers, worldwide president and CEO of Thermo Electron Corporation, USA.
A world leader in analytical instruments and the largest laboratory equipment manufacturer, Thermo Electron has already set up a modern Demonstration and Application Centre at its new headquarters at Hiranandani Business Park, Mumbai. It is also planning a new project for another large facility in India in the coming years with an investment of $ 3-4 million.
Estimated at around US $ 400 million, analytical equipment market in the country is ranked 11th in the $ 25 billion global market. Currently, the analytical equipment market list is led by US, China, Germany, Japan etc. The Chinese stood at sixth in the list till a few years ago and has become the second largest producer of lab equipment, at present. When compared to India, which has many upcoming life sciences companies, China has strength in various manufacturing segments, noted Marijin Dekkers.
Indian laboratories have to rely more and more on the imported instruments because there is a lack of interest to invest in instrumentation, infrastructure and manpower, according to Dr Ashes Ganguly, founder secretary of Indian Analytical Instruments Association (IAIA).
The market for analytical equipment, which includes various categories, in India is estimated to the tune of above Rs.2000 crore in various industry segments. The market has been growing at a rate of 10 to 12 percent for the last three years. Considering the emerging clinical research segment in India, this growth is likely to become a minimum of 15 to 20 percent in the coming years, said Dr Ganguly.
"Analytical equipment business is no longer a localized activity. It has become a global business assisted with high-end technology. Micro analysis and image analysis are some of the new trends happening in this industry which require high quality precision manufacturing capabilities and technology knowhow," noted Ganguly.
Eyeing the potential, many leading players have already integrated India as part of their global agenda and all the top ten leading global companies have set up offices in India. While most of these companies were operating through distributors until a few years ago, now most have own subsidiaries to run Indian business. As a result these multinational companies have cornered more than Rs.1000 crore business in the domestic market. However, some of the Indian companies have emerged as reputed players in the field of specialty areas.
"Millipore India is very important in our overall business development efforts - both in building our business in India and in building our global business with manufacturing and R&D support,'' said Martin Madaus, chairman, CEO and president, Millipore -- a leading provider of products and services for clinical, analytical and research laboratories.
Millipore India, which is setting up a manufacturing and R&D center in Bangalore, has acquired NovAseptic and MicroSafe recently. `` Both companies have great scientific talent, which will help us advance our initiatives in process monitoring technology and disposable manufacturing,'' said Madaus.
The domestic lab chemicals and reagents market too is poised to grow at a rate of 2-3 percent for the next five years, predict experts in the business.
The current growth of the industry is at a rate of 12 to 13 percent annually for the past few years and this growth rate is expected to reach 15-18% in the coming years. Of the Rs.600 crore odd domestic market, indigeneous manufacturers control about Rs.390-400 crore and the leading players in this segment includes names like Ranbaxy's Rankem, Qualigens Fine Chemicals - a division of GlaxoSmithKline (GSK) India, Merck Ltd., SD Fine Chemicals etc. Apart from this, about 15-20 unorganized lab chemical manufacturers are also operating in the Indian market.
It is estimated that about a dozen odd overseas manufacturers are active in India with a combined turnover of about Rs.200 - 210 crore. Leading players include Acros Organics, a Fisher Scientific worldwide company from Belgium, Mallikroft, AccuStandard, Sigma- Aldrich, Lancaster Synthesis which is part of Alfa Aesar, Mallinckrodt Baker Inc of USA, Avocado Research Chemicals, Fisher, TCI of Japan etc. Since most of these companies offer a wide array of products, which are mostly different from that manufactured by the domestic players, business prospects are bright for all the players.
Quality is the criterion for success in this business. Tie-ups and strategic alliance with global leaders help domestic companies to increase their business. For example, Rankem, a strategic business unit of Ranbaxy, imports over 30,000 rare chemicals for organic chemistry from Acros Organics, over 55,000 screening compounds and 4,000 highly reactive building blocks and innovative organic molecules from Maybridge and a range of analytical, high purity solvents and biopharmaceuticals from Mallinckrodt Baker Inc, USA. This has enabled Rankem to address the hi-tech needs of researchers in pharmaceuticals, biotechnology,environmental analysis, electronics and other industries, noted company sources.
Indian lab chemical manufacturers are also eyeing the export markets and currently Indian manufacturers export turnover are in the region of Rs.70-100 crore. This is also poised to grow in the coming years, said industry sources.