Karnataka Drugs and Pharmaceuticals Manufacturers' Association (KDPMA) is now aggressively scouting for land for the Pharma Special Economic Zone (SEZ). Initiative is subsequent to the meeting the Association had with Karnataka government officials with a proposal to have a dedicated SEZ.
To begin with the Association sent in a proposal to the Karnataka Health & Family Welfare secretary M Madan Gopal. The Association was then directed to meet the Economic Advisor to the Karnataka government, KV Raju who asked KDPMA to identify the land for the project.
"We want the Pharma SEZ to be located around 40 kilometres from Bangalore. We require an integrated and self contained complex which will have an advanced research centre and allied industry units to support the instrumentation needs in drug manufacture. Such an SEZ will require 1,000 acres, of which 500 acres will be taken up for development in the phase-I and remaining during the phase-II. The state government will need to provide the infrastructure which includes excellent road connectivity, regular water supply, uninterrupted power supply, a high-end Effluent Treatment Plant among others. Further, we insist on Bangalore primarily because it would be easy to get the required technical personnel to work here, Anjan K Roy, president, KDPMA and managing director," RL Fine Chem told Pharmabiz.
In the past, government had identified land at Hassan for a pharma SEZ. Although companies have invested here, there has been a serious reluctance by the qualified technical workforce to re-locate here. Therefore, we need to have easy access from Bangalore to allow the personnel to commute with no difficultly, added Roy.
"We have been lobbying hard for a separate SEZ for the pharma sector which is valued at Rs 3,500 crore, growing between 10-12 percent annually and generating a substantial chunk of exports too," said Jatish N Sheth, secretary, KDPMA and director, Srushti Pharmaceuticals.
Karnataka pharma has registered export earnings to the tune of Rs 1,750 crore ending December 2008. The major exporters are Strides Arcolab, Micro Labs, RL Fine Chem, Medreich, Bal Pharma, Anglo French, Bentley Remington, Lake Chem, Resonance Laboratories, Srushti Pharmaceuticals to name a few.
There have been several SEZs approved by the State government in Bangalore, but these are private initiatives for the information technology (IT) sector. Even the State government supported IT & BT Park at Rajajinagar Industrial Area, Bangalore has only IT companies setting up operations there.
In 2005, KDPMA went through two rounds of meetings with the ministers of health and industry apart from interactions with the senior officials from the directorate of industries & commerce for a dedicated Pharma SEZ in Bangalore. But the government preferred to offer Hassan which is a leading industrial town in the central part of the state. Although Bal Pharma, Medreich and Meyer have invested here, it has been extremely difficult to attract the right personnel. Therefore KDPMA is now insisting on Bangalore as the location to have access to the right resources.
The SEZ will provide the industry an integrated infrastructure for export production, expeditious approval mechanism and a package of incentives to attract foreign-domestic investments to promote export-led growth. Among the fiscal incentives are exemption from customs duty on goods imported, and no excise duty on goods brought from Domestic Tariff Area (DTA).