The Indian pharma-biotech contract research sector could stand to lose business of $100 million if the delay in shipments of consumables and manpower shortage are not addressed soon.

Several global majors are facing this threat, according to a section of experts in the contract research field.

Calling upon the Union government to modify rules to ensure speedy clearances, managing director Sigma Aldrich Chemicals Raja Ram recommended procedural simplifications like enabling block procurement certificates for CROs and Export Oriented Units, allowing despatch prior to completion of clearances and cutting down paper work to reduce delay in shipment. Currently, delayed paperwork is holding up consignments to up to 12 days. Supply chain management is critical in for the CRO operations in the country.

In a lucid presentation made to the union government, CROs including Sigma Aldrich along with the Federation of Indian Chamber of Commerce (FKCCI) recommends under the post facto clearance, CROs must be permitted to use products on receipt and insist on audit process for adequate safeguard.

Raja Ram pointed out that out of the one million SKUs (stock keeping units) stored at the Sigma Aldrich Warehouse in Whitefield near Bangalore only 30-50 percent of the items are stored as predictable stocks and there is also a large portion reserved against specific needs.

The reasons for delay in shipment is primarily attributed to the static customs resources. With this, the load on clearances has dramatically increased. In 2004-05, 24,000 products were cleared as against 8,000 in 2005- 2006. Raja Ram hopes that the recommendations could perhaps influence the Union government to ease the hassles in import and perhaps come out with a policy decision to solve the operational hazards which is definitely going to impact the contract research companies.

The other serious problem afflicting the sector is manpower shortage. Shortage of skills in the organic chemistry sector is leading to high attrition rate.

According to Raja Ram, the reason for manpower shortage is that the sector is growing so fast and there are not enough people. There is a serious pressure on the existing organic chemistry talent to deliver and perform. This is heading for a high attrition rate. While everyone is scouting for experienced talent, there is a serious need to look at a combination of fresh graduates with a great interest in basic skill sets.