Chemicals Pharmaceutical Textiles PREFACE| FOREWORD|EXECUTIVE SUMMARY |METHODOLOGY| CLUSTER OVERVIEW | COMPANY LISTING | SPONSORS | LAUNCH EVENT| D&B EDITORIAL TEAM Alphabetical Listing Total Employees Turnover Revenue Range Sectors Region Exported Offerings

Over the last three decades the Indian pharmaceutical industry has transformed into a world leader in the production of high quality generic drugs. The Indian pharmaceutical industry is estimated to be around US$ 12 bn, growing at 9% annually. Indian pharmaceutical products are exported to more than 200 countries around the globe including highly regulated markets of USA, Europe, Japan and Australia. A new chapter began for the Indian pharmaceutical industry with the General Agreement on Tariffs and Trade (GATT), which became binding in January 2005. After the introduction of product patents in India, the domestic industry has witnessed a fresh spell of new product launches. Foreign direct investment into the country’s pharmaceutical industry is estimated to have touched US$ 172 million during 2005-06 having grown at a CAGR of 62.6% during the period 2002 to 2006.

The pharmaceutical industry consists of large as well as a number of small and medium enterprises. The government has reserved four items of pharmaceuticals to be exclusively manufactured by the SMEs. A large number of companies are involved in contract manufacturing and R&D. The major systems of medicines are allopathic, ayurvedic and herbal. There are thousands of products we can find in pharmaceuticals; these products are in the forms of tablets, capsules, drops, liquids, injectables and dry powders, syrups and ointments.

The future outlook for the pharmaceutical sector seems to be extremely positive. A number of acquisitions by the Indian pharmaceutical companies outside, particularly in the US and Europe, are helping Indian players to make their mark at the global level. The Indian drug companies account for over 25% of the total generic drug applications made to the FDA of USA. Indian pharmaceutical companies are vying for the branded generic drug space to register their global presence and are expected to grow by around 15% in the near future. India is also fast emerging as the global hub for contract research and manufacturing services (CRAMs). As compared to Western countries, India offers a huge cost advantage in the clinical trials domain. Factors such as reverse-engineering expertise, abundant investment in research facilities and availability of skilled manpower are likely to help the Indian pharmaceutical market to reach US$ 20 billion by 2015.

Pharmaceutical Cluster Insights

Ownership pattern

The ownership pattern of pharmaceutical companies in the cluster is inclined towards the private limited category that accounts for 63% from the sample. They are followed by 22% public limited entities, 10% are partnership firms and the remaining 5% are proprietorship concerns.

• Around 40% of the private limited companies have turnovers in the range of Rs 40 mn -100 mn, while 33% are in the turnover bracket of Rs 100 mn – 250 mn and 22% are in the bracket of Rs 250 mn-500 mn
• 59% of the companies are established on or before 1990

Sub segment

Majority of the companies are involved in allopathic preparation accounting for 68% of the total sample. Companies involved producing the ayurvedic form of medicine account for 10% followed 3% in herbal, 1% in the Homeopathic segment and 13% dealing in other non – traditional systems of medicine.

• 13% of the companies dealing in the allopathic segment generate100% of their revenues from exports
• 27% of companies dealing in allopathic segment generate 50 – 95% of their revenue through exports
• 71% of companies dealing in the allopathic segment belong to the private limited category while 50% of those dealing in the ayurvedic form are also private limited companies

Nature of operations

Of the total sample of pharma companies, around 78% of the companies are involved in manufacturing activities for their own purpose, 7% are engaged in manufacturing on a contractual basis, 7% in R&D activities on contract research as well as for in-house purpose, while 5% manufacture on a loan licence basis. 30% have investments in the range of Rs 10 mn - Rs 50 mn, and around 8% each have investments in the range of Rs 50 mn - Rs 100 mn and above Rs 100 mn.

• 15% of the pharmaceutical companies utilise 100% of their installed capacity while 68% utilise above 50% of the installed capacity
• 55% of the companies have shown revenue growth of 30% in the last two years while 7% of the companies shown more than 100% growth in revenue for the same time period
• 12% of the pharmaceutical companies have their plants in Ambernath, Badalapur, Bhiwandi and Dombivli area
• 20% of the companies’ plants are located in Tarapur and Boisar area while 17% have their manufacturing facility in the Navi Mumbai area

Future plans

70% of the companies from pharmaceutical segment have envisaged strategies for future growth. The plans range from capacity expansion and modernisation, to new market entry and diversification. Out of the total companies with future plans for growth, 24% of the companies have plans for expanding their capacity in order to meet the growing demand.

Benefits and hindrances

The study shows that 30% of the companies have benefited from manpower training. 25% of the companies have benefited from quality up gradation. 26% have benefited from the technology set up in the cluster, and 24% of the companies have benefited from the funding facilities. The major hindrances cited are infrastructure, taxes & duties, lack of government support, high land cost and cost of labour.