“The small and medium sized units form the backbone of Indian pharmaceutical sector and almost 90 per cent of the pharmaceuticals in the country are manufactured from the small and medium scale sector which contributes 70 per cent of the production and 66 per cent of the employment,” stated V Madhusudan, chief executive-technical, Banner Pharmacaps (India) Pvt. Ltd.

He further added that in order to maintain its prominence in the sector, the small and medium sized units will have to find new strategies for survival. The sector is bogged down in the last nine months due to some of the Union Government announcements which included setting up of excise free zones at Baddi, Uttaranchal and Jammu and Kashmir. Several such units, which were contract manufacturing outfits, for large companies have been losing valuable orders as their customers either moved to these excise free locations or transferred existing orders to units located there for outsourcing production, to capitalise the duty advantage.

“In today’s global and domestic environment, the small and medium sized units are looking for a direction and need to chalk out their future course of action,” stated Madhusudan while attending a seminar at the 57th IPC at Hyderabad.

Madhusudan said that the SME sector needs to examine each of the alternatives like exports, contract manufacturing, mergers and acquisitions, which could throw open future opportunities for survival. Research and development oriented growth in line with the global trends could be a viable alternative. Although discovery of new chemical entities is not easy for SMEs, a smart option could be New Drug Delivery System (NDDS) for the small and medium sized units.