The Indian pharmaceutical machinery industry, with its proven strength in manufacturing world class machineries in the entire range of pharma manufacturing facilities, is all set to tap the global market with quality products in reasonable prices. Evidently, the exports business of majority of these companies are growing high and the leaders in the industry are keen in their strategies to grab the international market with special emphasis to the western country markets.
According to Indian Pharma Machinery Manufacturers Association (IPMMA), the organisation uniting the pharma machinery industry under one umbrella, there are around 1500 machinery manufacturing units operating in the country out of which half of them runs in the organised sector. Around 800 small and medium sector units are in manufacturing and allied utility service.
The estimated turnover of the Indian pharma machinery industry comprising of small, medium and large scale companies is around Rs 1500 crore. Out of the total turnover, around 40 percent is being exported to more than 80 countries around the world, according to the IPMMA. The export of pharma machinery is experiencing a growth of 15 to 20 per cent per annum.
The majority of these companies are situated in two states, Gujarat and Maharashtra though there are also a few companies operating in New Delhi, Andhra Pradesh and Karnataka. Gujarat and Maharashtra, being the two major pharma hubs together contributing almost 80 per cent of the total pharmaceutical production in the country, has eventually become the favourite spot for the machinery manufacturers too. Of these, Gujarat accounts for the production of around 35 to 40 per cent of India's pharma machinery, according to a study by the international business consultant KPMG, in 2008.
With the expansion of Indian pharma industry to overseas countries exploring the market opportunities, the Indian pharma machinery and packaging machinery industry emerged as developers of international quality products with advanced technologies. The Indian advantage of low cost manufacturing capacities - offering the machines in almost one fifth of the cost of products from Germany and such pioneers - and the key skills to develop quality products became major advantages for these companies to achieve reputation in the overseas firms.
While up to 2004-05, Germany, Italy and South Korea were the major providers of pharma machinery and packaging machinery products and services, the comparatively low cost products with assured international quality has now brought the Indian industry too in the limelight of the machinery industry. Many companies in the quality conscious US and European pharma market has started opting for the Indian machineries in recent years, say industry sources.
However, this does not give India a free arena to play in the international market. The growing competition from the Chinese firms, which also provides low cost machineries to the global market is a challenge faced by the Indian industry. Further, the increased number of players in India itself, which competes in negotiating in price to grab more customers, is another aspect which the companies are facing at present. However, the products from the Chinese manufacturers are not competent with Indian products in quality and the competition within the Indian market is healthy for the industry.
"Of course, this is a highly competitive industry and the competition is only going to increase in the future. But we are targeting on development of new machines as per the need of the customers, including launching of more automated products, and strict implementation of standard operation procedures," said a top management official from Gujarat-based Cadmach Machinery Company Pvt Ltd.
The Rs 80 crore Cadmach, which claims to be the largest pharma machinery manufacturer with focus on solid dosage manufacturing machines and having exports to more than 30 countries, is keen on R&D operations and has plans to launch two machines on an average per annum.
"Business expansion to overseas countries is a constant process for us and we are looking for options to explore the regulated market at present," he added. However, the recession has compelled the industry to slow down the pace of growth international markets.
More and more Indian companies have started to follow and apply for the standards like CE Mark, a mandatory conformity mark on products placed on the single market in the European Economic Area (EEA), in order to develop confidence in their international clients. Companies like Cadmach have set up their office in US to provide better sales and after-sales services to its clients locally.
Adhering with the latest technological developments in the segment and constant improvement and upgradation of the existing products as per the requirement of the customer is another competitive edge for the Indian pharma machinery and packaging machinery industry. The organised sector, which accounts for around Rs 500 crore-business in the segment, is constantly following the R&D activities to bring in new products with high technology.
The packaging machinery, with the latest methods of ensuring safety and accountability like Biometric and RFID technologies, has a lot to get updated frequently. The key area of interest for these companies is ensuring support to the quality of products and the protection against counterfeiting, as the quality of exports gets more emphasis as a matter of business promotion and reputation for the pharma companies.
Companies like PamPac, the packaging machinery subsidiary of ACG Worldwide - the global major in pharmaceutical empty capsules, pharma/packaging machinery and packaging films business, are exploring more and more overseas markets by attending pharma related exhibitions and events. For the machinery industry, pharma exhibitions are the major platforms to develop business contacts and the major means to expand their clientele.
The implementation of revised Schedule M, which insists quality of manufacturing machines on par with the international good manufacturing practices (GMPs), has also supported the major Indian pharma machinery manufacturers. The Indian pharma companies, as a result of the new norms, has to ensure quality manufacturing machines, which in turn resulted in increased sales of high quality products from the pharma machinery manufacturers.
"The domestic market delivers a big opportunity for our business and we are constantly updating our technologies and machines considering the feedback of our customers," said a source from the Ahmedabad-based Fluidpack, the manufacturers and exporters of solid dosage pharma machineries, spares, punches and dies.
The company also exports 70% of its machines to around 35 countries including US, Canada and Germany. However, the recession has a positive effect on the performance of the company as the global meltdown resulted in US and European companies searching for low cost manufacturing machines. The exports business of the company experienced a 29% increase from February to May 2009.
The key to success for the machinery manufacturers in the country lies on constant improvement in R&D, quality and effective management skills, said Darshan Mevada, MD, NKP Pharma. NKP Pharma, a manufacturer of injectable packaging machines based in Ahmedabad, is planning to close down its formulations manufacturing plant in order to focus on machinery manufacturing business. He added that the machinery manufacturers in the country should have a long term vision and competitive strategy for a sustained growth.
However, the Indian pharma machinery industry has to grow forward through integration and unity among the players to grab the maximum potential offered by the international market, says IPMMA.