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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

COVER STORY

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

COVER STORY

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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COVER STORY

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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