The Southern Surge

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good infrastructure and connectivity contributed to the growth. They also took the lead in policy issues like unveiling the biotech policy etc. It is logical that the industry takes a bigger shape in the region where it was born,” says Satish Reddy, MD and COO, Dr Reddy’s Labs. Reddy is the son of the eponymous founder Dr Anji Reddy, and one of the most respected names in the pharma industry in the country. Historians say that the Indian Drugs and Pharmaceuticals Ltd (IDPL) and later the Regional Research Laboratories (now the Indian Institute of Chemical Technology) were the crucibles for spawning enterprises. “Most pharma companies here have a direct or indirect connection to IDPL. And, almost all of them are first-generation entrepreneurs,” says Amitabha Guha, managing director, State Bank of Hyderabad.

Says SS Varaprasad, senior advisor, Bulk Drug Manufacturers Association (BDMA) and a pharma industry veteran: “Today, Andhra Pradesh occupies the leading position in the country in bulk drugs manufacture and third in manufacture of formulations. The turnover for 2006-07 is estimated to be about Rs 11,808 crore (Rs 9,840 crore) and exports to the tune of Rs 7,084 crore (Rs 5,904 crore),” he says. No wonder then that it has earned the epithet of ‘bulk drug capital of India’.

“The market cap of Dr Reddy's, Aurobindo, Divi’s Labs and Matrix put together do compare very well with that of Ranbaxy, Cipla and Wockhardt,” points out C Krishna Prasad, managing director of the Rs 170-crore Granules India Ltd, a pharmaceutical formulations intermediates manufacturer. Prasad himself is a first-generation entrepreneur. “There is definitely an attitude change shedding their earlier conservatism and leading to confidence among business people in the south. Their risk appetite is also changing. The knowledge-driven software and pharma sectors have shown the way. Today, there is healthy respect for business,” concurs M Rammohan Rao, dean, Indian School of Business (ISB).

Interestingly, the pharma sector growth also led to an offshoot growth in the biotech area. And the same factors have facilitated this growth. Today, biotech companies from the region like Biocon, Shantha Biotech and Bharat Biotech are hungry and raring to grow. With these, an ecosystem is emerging with the setting up of the ICICI Knowledge Park and Shapoorji Pallonji Biotech Park in Hyderabad to culture and spawn more successful enterprises.

Brick and mortar isn’t dead