Indian pharma machinery segment gears up for next level
From the initial years of struggle, the Indian pharmaceutical machinery manufacturing industry has evolved into one of the most sought after service providers in the domestic as well as global arena. They now gear up for the next level of competition. Sachin Jagdale explores
|“What is also crucial is a fine understanding of the global marketplace and insight into the needs of customers around the world. Manufacturers must have the knowledge and should develop the ability to meet the regulatory and safety requirements of various countries”
– Ajit Singh Chairman
The Indian pharmaceutical industry may be today in the driver’s seat, and there are many factors that have contributed to this exponential growth. Though smaller in terms of volumes, the industry has played a deciding role in the growth of Indian pharma companies and has allowed them to capture a sizable portion of the global pharma market.
However, the pharma machinery segment has had its rocky moments. During the 70s, the Indian government imposed heavy import duties and restrictive import licensing policies due to the shortage of foreign exchange. These restrictions meant that pharma companies could not import machineries and hence could not expand. These difficulties threatened to break the pharma industry, but these ironically turned out to be a huge opportunity for the pharma machinery segment. The restrictions forced pharma companies to turn to local engineers, and motivate them to innovate, come up with indigenous solutions and manufacture machines to suit their needs.
Turning threat into opportunity
What were the difficulties and challenges in becoming a technologically and financially self sufficient industry? Ajit Singh, Chairman, ACG Worldwide, opines, “Research spend and technological development capabilities were the major milestones. Some of the larger players in the segment like ACG Worldwide have successfully met these challenges by developing in-house research capabilities and investing heavily in technology development. What is also crucial is a fine understanding of the global marketplace and insight into the needs of customers around the world. Manufacturers must have the knowledge and should develop the ability to meet the regulatory and safety requirements of various countries.” He adds, “Company management should be able to spot future trends for the industry. For example, new concepts like filling liquids in hard capsules, anti counterfeit measures like being able to do complex printing on capsules and other dosage forms, multi-feed blister packing machines and tropical blister packing systems have been interesting recent innovations.”
|“The Indian Pharma machinery industry fulfills any company’s needs in terms of pricing. Pharma machinery in India is available at one fourth the price of the machines produced internationally”
– Ashwin Thacker Chairman and Managing Director
Today, the Indian pharma machinery manufacturing industry is poised for the next level. Indian pharma machinery manufacturers are exploring developed markets like the US and Europe like never before. Such markets have great expectations from Indian players as the standards and criteria are definitely higher than in the domestic market. Inspite of these higher benchmarks, Indian pharma machinery players are eying these markets as the profit margins in exports are considerably higher. Higher profit margins in exports have in turn propelled innovation or modification among the operational procedures in India. Product requirements are varied and a few leading Indian machine manufacturers have now developed the skill of providing customised manufacturing and packaging solutions to MNC pharma companies. As Singh points out, the achievement of world class quality in product and service by Indian companies is being recognised by industry associations too. Pam Pharmaceutical and Allied Machinery Company recently received the renowned ‘Premio Qualidade Febrafarma’ Award for the best capsule filling machine supplier in Brazil, a first for any Indian company in the field.
Highlighting the fact that trends in the pharma industry naturally affect the machinery segment, Pranay Patel, General Manager, National Pharma Machineries says, “Adoption of international standards and regulations by Indian pharma industry has played a vital role to make machinery manufacturers capable to compete in these territories. Development in all areas like infrastructure improvement, R&D, Quality upgradation, understanding of regulatory requirements has been noticed.”
However, in spite of such remarkable feats, Singh feels that there are some critical factors that have not yet been addressed, like issues on safety and focus on customisation. Very few Indian machine manufacturers address these issues. Likewise, G A Patel, Director, Chitra Machineries says, “There is a wide scope of work in US and Europe market but Indian pharma machinery manufacturers have to take care of quality, performance and after sales support. Price is not a problem for the US and European pharma markets. The other scope of development is to become Original Equipment Manufacturer (OEM) supplier to machinery manufacturers of US and Europe.” Pranay Patel points out that though the Indian pharma machinery industry is at par to serve these markets, a broad understanding of regulatory requisitions related to machinery is to be further explored.
|“Adoption of international standards and regulations by Indian pharma industry has played a vital role to make machinery manufacturers capable to compete in infrastructure improvement, R&D and quality upgradations”
– Pranay Patel
The profit margins of the machine manufacturers are considerably lesser than the pharma clients they serve so they have to balance cost and profits with the exacting demands of their customers. Pranay Patel feels, “The demand is for a high quality, advanced and economically priced product. Machinery manufacturers are losing margins because of these parameters. However that said, margins are being compensated to some extent by providing customised and high end products according to the latest needs.”
Striking a similar chord G A Patel highlights that the Indian pharma industry enjoys economical rates because of intense competition among pharma machinery manufacturers. Due to a price rise in all raw materials, it is becoming difficult to balance investment and profit but each manufacturer has met this problem in their own way.
At the end of the day, pharma companies are the best judge of the capabilities and the potential of Indian pharma machinery manufacturers. They too feel that the performance of machinery manufacturers is up to the mark. “It possesses a better understanding of the technological requirements in the design and manufacture of machinery for the highly regulated pharma industry. With an emphasis on advanced features and sound engineering technology, Indian machinery is deployed in hundreds of companies in India and abroad, reliably producing and packaging high quality products,” informs Ashwin Thacker, Chairman and Managing Director, Flamingo Pharmaceuticals.
On the pricing front, Thacker finds Indian machineries very beneficial. “The Indian pharma machinery industry fulfills any company’s needs in terms of pricing. Pharma machinery in India is available at one fourth the price of the machines produced internationally,” he reveals, supporting the claims of the manufacturers. Continual improvement is an unending journey. Similarly, Thacker feels that innovation in R&D, automation, and after sales services can be improved. Even in the case of equipments used by pharma companies for R&D, domestic manufacturers have not been able to meet the customers’ expectations, he says.
Big established indigenous players have to face competition from small time pharma machinery manufacturers, but according to Singh, after sales service centers and maintenance of stock of spare parts at multiple locations around the world, are important support systems which many small time manufacturers cannot provide. The real competition will come from global players who have now set up base in India. Like in other industries, industry observers are expecting a spate of consolidation and mergers in the pharma machines segment too. G A Patel feels that though big players have an edge in the business, opportunities exist in both segments of the market.
Quality oriented pharma clients are looking for machines manufactured under Good Manufacuring Practices (GMP). “Taste of pharma clients is mainly changing according to the mandatory requirements. However, people are becoming more selective about most sophisticated and highly automated equipments,” Pranay Patel avers. Singh remarks, that introduction of on-line analytical systems and Process Analytical Techniques (PAT) compliance systems have to be integrated with our equipment to make them acceptable in global markets. An increasing number of countries insist that purchases need to be made from companies meeting environmental guidelines and documented quality management systems. “These are areas of improvement for most Indian manufacturers,” feels Singh. Almost all quality improvement comes via simplification of design, manufacturing layout, processes and procedures. This would seem to be the best prescription for the future.