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8/8/2019 Kapilkhandelwal Pharma Machinery Cover Story Aug09 091124100316 Phpapp01
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Modern Pharmaceuticals August 200938
COVER STORY
The Indian pharmaceutical industryis now being acknowledged as a global
outsourcing hub rather than merely a generic
drugs market, thanks to its low-cost manufacturing,
high-quality research & manufacturing facilities and highly skilled personnel.
Moreover, the industry today adheres to all international norms and regulations due to
which it has several USFDA-approved facilities. However, Indian pharma machinery manufacturers
need to venture into the field of technology transfers and keep pace with the changing
technology to increase levels of automation, observes M Neelam Kachhap.
Modern PharmaceuticalsModern Pharmaceuticals August 2009August 200938
COVER STORY
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August 2009 Modern Pharmaceuticals 39
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t
he Indian pharmaceutical
industry is metamorphosing.
Like a butterfly emerging
from its cocoon, the
pharmaceutical industry is also
shedding its previous image of being
merely a generic drug production
market. While generics continue to
play a major part in the industrys
success, several companies have started
down the long road of drug discovery
and branded product development.
The Indian pharmaceutical industry
presents both a competitive threat and
partnership opportunities owing to its
low-cost manufacturing, high-quality
research & manufacturing facilities and
highly skilled personnel.
According to recent industry
reports, while there are around
270 large R&D-based pharmaceutical
companies in India including
multinationals, government-owned
and private companies there are also
around 5,600 small licensed generics
manufacturers. However, in reality,
only around 3,000 companies
are involved in pharmaceutical
production. Most small firms do not
have their own production facilities,
and operate using the spare capacity
of other drug manufacturers.
Moreover, the advent of
pharmaceutical product patent
recognition in January 2005 changed
the ground rules for Indian companies.
R&D departments are moving away
from reverse engineering in favour of
developing novel drug delivery systems
and discovery research. However, this
revolution needs constant support
of machine manufacturers, who
are matching the steps of pharma
manufacturers in providing world-class
engineering products.
The pharma machinery industry The Indian pharma machinery
industry aptly illustrates the well-
known idiom, Necessity is the mother
of invention. In the past, hurdles like
foreign exchange shortage, heavy
import duties and restrictive import
licensing policies turned out to be
a blessing in disguise, as Indias own
engineering acumen emerged to
manufacture pharma machinery at
cost-effective rates.
The industry has come a long way
from being an import-dependent
sector in the 60s and 70s to being an
industry with an annual growth rate of
14-17 per cent. According to the Indian
Pharma Machinery Manufacturers
Association (IPMMA), there are
more than 800 units manufacturing
pharmaceutical machinery comprising
small, medium and large-scale
enterprises in India. With an estimated
turnover of Rs 2,000 crore, around
40 per cent is being exported to more
than 80 countries around the world
including the US, the UK and other
European countries.
In India, there are around
17,000 pharmaceutical companies.
Hence, there is tremendous scope
for machinery manufacturers to
exploit the potential by providing
the necessary machinery with proper
design, ease of user application, simple
maintenance and also validation
protocol for the new equipment.
This is essential for pharmaceutical
companies. The Indian pharmaceutical
machinery industry is currently
catering to the segments of tableting,
capsulation, powder processing,
material handling, R&D equipment
and instrumentation, coating, bulk
drug plant installation, etc, says
Arjun Rao, general manager, Shree
Bhagwati Pharma. Evidently, Indian
pharmaceutical machines, which
have already made a mark in the
domestic market, have also started
making considerable inroads into the
international market. The growing
acceptance of Indian machines in
foreign countries is illustrative of
this trend.
Arjun Raogeneral manager, Shree Bhagwati Pharma
There is tremendous scope for machinery
manufacturers to exploit the potential by
providing the necessary machinery with
proper design, ease of user application, simple
maintenance and also validation protocol for
the new equipment.
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The Indian pharmaceutical
machinery manufacturing sector
constitutes around 5-7 per cent of the
global market. In terms of value, more
machines are being imported today
than exported, but in terms of quantity,
it is the reverse. Industry experts
believe that this is because imported
machines are more than seven to eight
times the value of Indian machines.
Indian manufacturers still do not make
machines requiring high technology or
laboratory equipment required for R&D.
Hence, the country still needs to import
these machines.
Looking at the capabilities of
Indian engineering companies,
many international machine
manufacturers have joined hands
with them. This has helped the Indian
pharmaceutical industry make further
advancements in the products and at
the same time, supply machinery at a
price at least one-fourth or one-third
of imported machines.
Avers Dr Kamal K Sharma, managing
director, Lupin Ltd, Indian pharma
machinery manufacturers have not
only been consistently upgrading
themselves but also innovating by
investing in knowledge. They are
increasingly studying international
market trends to learn best-in-class
practices and bring them to the
country. A lot of these manufacturers
have successfully made inroads into
foreign soil, and have managed to
command a sizeable marketshare.
Strengths of the industryAccording to industry experts,
Indian machines are very competitively
priced as compared to machines
from the West and give a good price/
performance ratio. Besides, the labour
in India is economical and hardworking.
Due to this, the efficiency output is
comparatively high in India, thus giving
the country a price advantage over
other developed nations.
In addition, Indian pharma
machinery manufacturers have not yet
entered the culture of strictly adhering
to contracts. Hence, they provide better
after-sales service and go beyond the
annual maintenance contract (AMC).
Moreover, they are flexible in terms
of deliveries, contractual terms, etc.
On the other hand, international
manufacturers do not offer such
support to pharma manufacturers.
An increasing number of international
pharmaceutical machine manufacturers
have recognised Indias achievements
and evolution in the industry. Indian
machines are manufactured and used in
accordance with international standards
and do not fear inspection or approval
of their facility. This is one of the many
reasons that India has the most FDA-
approved facilities in the world, only
second to the US.
Beyond Indian shoresAt present, the Indian pharma
machinery manufacturing industry is
poised to take the business to next
level. The adoption of international
standards and regulations by the Indian
pharma industry has played a vital role
in making machinery manufacturers
capable enough to compete in these
territories. Indian pharma machinery
manufacturers are exploring developed
markets like the US and Europe with
much interest. Such markets are
defined by standards and criteria that
are definitely higher than the domestic
market. Regardless of such high
benchmarks, Indian pharma machinery
players are eying these markets, as
the profit margins in exports are
considerably higher. In fact Indian
companies are exploring opportunities
in more speculative markets also.
There are a few who are exploring
opportunities in Afghanistan,Turkey,
Poland, and CIS countries,explains Kapil
Khandelwal, an independent board
member of various companies. And,
higher profit margins in exports have
boosted innovation or variation among
the operational procedures in India.
Dr Kamal K Sharma
managing director, Lupin Ltd
Indian pharma machinery manufacturers
have not only been consistently upgrading
themselves but also innovating by investing
in knowledge. They are increasingly studying
international market trends to learn best-in-class
practices and bring them to the country.
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August 2009 Modern Pharmaceuticals 41
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Product requisitions are wide-
ranging and a few leading Indian
machine manufacturers have now
developed the skill of providing
customised manufacturing and
packaging solutions to MNC pharma
companies. Development in all areas
like infrastructure improvement, R&D,
quality upgradation and understanding
of regulatory requirements has been
noticed. While up to 2004-05, Germany,
Italy and South Korea were the major
providers of pharma and packaging
machinery products & services, its
comparatively low-cost products with
assured international quality has now
also brought the Indian industry to the
fore. Several companies in the quality
conscious US and European pharma
market have started opting for Indian
machinery in recent years, according to
industry sources.
However, this does not give
India a free arena to play around in
the international market. Growing
competition from Chinese firms, which
also provides low-cost machinery to
the global market, is a challenge faced
by the Indian industry. Further, the
increased number of players in India
itself who negotiate on prices to grab
more customers is another aspect
that companies are facing at present.
However, the quality of Indian products
are superior to that of Chinese ones
and the competition within the Indian
market is healthy for the industry.
Several people harbour the
misconception that Korea and China
are better manufacturing destinations.
However, pharma industry is not
looking for cheap machines, but for a
value for money proposition, which
encompasses many aspects like
reliability, support, upgradability, etc.
China has a competitive advantage
because of its low-cost mass production
of machinery that has no or virtual after
sales. India has an advantage in terms of
its offerings like its design outsourcing
services to high-end customisation,
after-sales support process outsourcing
and validation & documentation
services, states Khandelwal.
He further adds, In the latter aspect,
the Chinese have limited capability.
Another area India can tap is the area of
servicing refurbished equipment in drug
discovery and the pre-production phase,
which are dominated by Western players
who have little or no presence in this
part of Asia. The SLA-driven service is a
latent need in the emerging biotech and
drug discovery sector. While India and
China have both emerged as leaders in
global pharma outsourcing, India offers
better product quality, while China has
more of a cost-reduction advantage.
The implementation of the revised
Schedule M, which insists that the
quality of manufacturing machines
should follow international good
manufacturing practices (GMPs), has
also supported most Indian pharma
machinery manufacturers. As a result
of the new norms, Indian pharma
companies have to ensure quality
manufacturing machines, which in
turn has resulted in increased sales of
high-quality products from India.
The rise in joint ventures between
foreign and Indian pharmaceutical
companies proves that India can
manufacture world-class products
at affordable prices. There are
also significant opportunities
for pharmaceutical plant design
consultancy and related services,
especially for large companies
adopting USFDA and UKMCC
standards. Overall, being the lowest
cost producer combined with several
FDA-approved plants, India promises
to be a global outsourcing hub for
pharmaceutical products.
Issues within the industryGrowth in the advancement and
upgradation of technology in machinery
has been fast in India. With almost
low technology offerings in the initial
stage, the Indian pharma machinery
industry today is considered as one
Kapil Khandelwal
independent board member of various companies
India has an advantage in terms of its offerings
like its design outsourcing services to
high-end customisation, after-sales support
process outsourcing and validation &
documentation services.
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that can offer value-added engineering
with integration of new technologies.
The industry is gearing up to meet
challenges in terms of technology.
What it requires is a close partnership
with the local pharmaceutical players,
whereby the development will be faster,
say industry experts. Also, at times, the
industry goes for a tested product from
abroad at double or three times the price
than the equivalent product available
locally. Hence, the industry requires
support in the form of partnerships.
However, some experts feel that
the biggest issue in this segment is
that there is very low investment in
R&D and manufacturers do not work
in tandem with each other. Hence, it is
a fragmented industry comprising
small-scale manufacturers.
Says Ajit Singh, chairman, ACG
Worldwide, There are many
small manufacturers whose quality and
reliability are under suspicion. They sell
at a very low price. Due to this, overseas
customers buy these machines and
are later dissatisfied. This ruins the
reputation of pharmaceutical machinery
manufacturers from India.
The industry has not attracted
significant international manufacturers
to have joint ventures or technology
transfers. Hence, the industry is
continuously working on improving
the brand image of its products. In the
engineering space, the industry has
been able to overcome this perception
to some extent. For instance, Pharmalab
has a tie-up with a Finnish company
called Elomatic for engineering design.
Pharmalab gets technical support from
Elomatic and does the engineering
design in India. This method of working is
quite inexpensive and profitable.
Another issue is the lack of trained
manpower. This was not the scenario
earlier, but nowadays it is a worry.
Salaries have risen and this
makes it difficult for small-
scale manufacturers to attract
and afford skilled & trained
manpower. In order to meet
the specific requirements of
pharma engineering, experts feel
the need for exclusive engineering
colleges to cater to this subject.
According to them, industry needs
institutes to include pharma engineering
as a subject of expertise. This is because
although many of the areas are in line
with the studies of general engineering,
a few areas of application in life sciences
require expertise. Hence, such training
institutes will help the industry have
trained personnel and save time, thus
helping the country as a whole.
Technology enhancementThe pharma manufacturing
industry can work in sync with pharma
machinery manufacturers. There is
no demand-supply gap in terms of
volumes. Machinery manufacturers
are meeting the needs of the industry;
they simply need to keep pace with
the rapidly changing technology
in the international scene. For this,
manufacturers will have to invest in R&D
and build their brand. Indian pharma
machinery manufacturers also need to
venture into the field of technology
transfers. The need of the hour is to
forge international marketing tie-ups
so that they can increase their volumes
and scale up capacities.
Further evolution, in terms of
technology and investments is required
for the machinery sector to truly partner
the pharma/life science sector. Indian
pharma machinery manufacturers need
to upgrade to the latest technologies,
increase levels of automation and
improve documentation.
Into the futureAgainst the background of a
growing economy and exports that
have doubled annually during the
last two years, pharma machinery
manufacturers are building a new
image. The industry is looking forward
to the continual support of the
government in terms of exports and in
offering incentives for increasing R&D
investments. The government can also
play a role in encouraging technology
transfers and tie-ups.
The key to success for machinery
manufacturers in the country lies in
constant improvement in R&D, quality
and effective management skills.
However, the Indian pharma machinery
industry has to further grow through
integration and unity among the players
to grab the maximum potential offered
by the international market.
Ajit Singh
chairman, ACG Worldwide
There are many small manufacturers whose
quality and reliability are under suspicion.
They sell at a very low price. Due to this,
overseas customers buy these machines
and are later dissatisfied. This ruins the
reputation of pharmaceutical machinery
manufacturers from India.
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