Laboratory chemicals and equipment market in the country is on an upswing. While the lab chemicals market in the country is estimated to be around Rs. 200 crore and growing at 30 per cent annually, the lab equipment sector is pegged at $750 million with an annual growth of 10 per cent.
One of the major players in the lab chemicals segment in India is Jubilant Organosys, a speciality chemicals company. The company manufacturers acetyl products, pyridines and pyridine derivatives, fine chemicals, additives and other chemicals. Ranbaxy (New Delhi), SD Fine Chemicals (Mumbai), NICE (Kochi), Leonid (Bangalore) and Loba (Mumbai) are some of the other companies engaged in the lab chemicals business.
The market for lab equipment is dominated by multinational companies, like Waters, Millipore, Sartorius, Applera Corp, Thermo Electron, Agilent Technologies, Perkin Elmer, Shimadzu, GE Healthcare, Bruker Group, Beckman Coulter and Varian.
Growth drivers
The main reason for the buoyancy in the lab chemicals and equipment market is the growing R&D activity in pharmaceuticals and biotech drug development in India. Indian companies are making inroads into global markets with a strong Intellectual Property Regime that will give them an edge over multinational companies, said VR Kannan, pharma consultant. The Indian companies also strictly adhere to global norms and guidelines of good laboratory practices to survive in a highly competent scenario, he added.
Lab chemicals scenario
In the area of lab chemicals, there is a cut-throat competition in India for quality and pricing, as there is presence of Chinese products, pointed out S Paul Joshua, manager, quality control, Leonid Chemicals. "We are engaged in the production of organic chemistry, fine chemicals and reagents. We have drawn up plans to offer high grade solvents to the pharma, biotech and chemical industry customers," he said.
Many of the companies are cogitating about expanding the lab chemicals space, said reliable sources. In mid 2006, Sigma Aldrich Chemical Pvt. Ltd, a subsidiary of the US-based life sciences and high technology major that deals with a range of biochemical and organic chemical products and kits, invested Rs 48 crore on a facility at the Bommasandra industrial area in the outskirts of Bangalore. Going by the huge investment by pharma-biotech companies in the country in the research and development space, Sigma too with its expertise in synthetic organic chemistry is gearing to tap the market, said Raja Ram, managing director, Sigma Aldrich Chemicals.
In November 2006, Jubilant Organosys invested Rs 70 crore to set up a drug discovery center at Bangalore. The new 'Jubilant Discovery Center' is the largest of its kind and would provide innovative solutions to global pharmaceutical companies. The company is one of the leading providers of custom research and manufacturing services (CRAMS). The company manufactures APIs, including carbamazepine, oxcarbazepine and citalopram, pyridine and its derivatives, solid polyvinyl acetate, vinyl pyridine latex and organic intermediates like ethyl acetate and acetic anhydride, said Shyam S Bhartia, chairman and managing director, Jubilant Organosys.
Most of the Indian companies are depending on imported lab chemicals, as there is a scarcity in specialty chemicals used in the laboratories for varied uses. Therefore Indian companies with competitive advantage in the areas of high value-added chemicals of international quality standards, can dominate in both domestic and global arenas, said a reliable source.
Lab equipment prospects
Though both lab chemicals and equipment sectors are witnessing a spurt in demand, the action is reflected more in the latter. "With Indian pharma-biotech companies showing an increased awareness for the need for good quality lab
infrastructure, it is boom time for the business,'' said Amit Chatterjee, managing director, Sartorius India.
The Waters India views the increased awareness on GLP as a great time to come up with products having superior technology and competitive pricing. In the past, this was limited only to a few leading global players, which had a presence in India, but we see such a need percolating to small and medium players in the industry, noted KV Venugoplan, president, Waters India.
One of the emerging trends in the lab equipment sector is substitution of wet chemistry by chemical analysis. The contract research assignments have increased demand for higher sensitivity and accuracy, apart from automation to enhance lab productivity, added chief of Waters India.
According to industry sources, the pharma-biotech labs in the country by and large use imported equipment and hence companies like Waters, Millipore Thermo Electron, Lab India, Spinco Biotech, Becton Dickinson, Agilent Technologies, Shimadzu Analytical, Millipore, Sartorius and GE Healthcare stand to gain.
For the lab equipment majors 43 per cent of the business is generated from the research and development institutes, 23 per cent from analytical services and quality assurance and quality control accounts for 20 per cent of the total business. With the new patent regime, companies like Cipla, Micro Labs, Nicholas Piramal, Biocon, Orchid and Strides Arcolab are developing knowledge-intensive businesses as drivers of future growth.