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SMEs likely to play important role in pharma growth story: report

Sep 09 2013, 12:32 IST
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Exports of pharmaceuticals products from India increased from USD 6.23 billion in 2006-07 to USD 8.7 billion in 2012-13. Exports of pharmaceuticals products from India increased from USD 6.23 billion in 2006-07 to USD 8.7 billion in 2012-13.
SummaryIndian pharma industry is highly fragmented and estimated to have 9,456 units in SME segment, says report.

The small and medium enterprises (SMEs) are expected to play a significant role in the growth story of the country's pharma sector as they contribute 35-40 per cent to the industry in terms of production with a turnover of about Rs 35,000 crore.

"Small and medium scale units have played a crucial role in the growth story of the Indian pharmaceutical industry and form an integral part of the sector," India Micro, Small and Medium Enterprise Report 2013 said here.

It added: "The Indian pharmaceutical industry is highly fragmented and estimated to have 9,456 units in the SME segment, which account for around 87 per cent in production by volume and 40 per cent by value."

Exports of pharmaceuticals products from India increased from USD 6.23 billion in 2006-07 to USD 8.7 billion in 2012-13, a combined annual growth rate of 21.25 per cent.

The Ministry of Commerce has targeted Indian pharma sector exports to reach USD 25 billion by 2014 at an annual growth rate of 25 per cent.

In terms of number of units and employment generation, the SME sector is at the forefront. They also support 48 per cent of the country's pharma exports, the report said.

The country's pharmaceutical sector derives its strength from the SME sector, as it forms an essential part of the supply chain for the larger players.

There are more than 24,000 registered units, which meet 70 per cent of the country's needs. Clearly, MSMEs operating in the domestic pharma sector are recognised as the backbone of the industry.

By and large, they operate in the local market, and mainly manufacture formulations which relate to medicines of mass consumption and therefore have a huge market. To a great extent, survival of these units would depend on how well and quickly these companies are able to adapt to the changing business scenario, the report said.

In India, SMEs are mainly focusing on manufacturing and niche marketing. Contract Research and Manufacturing (CRAMs) and Biopharma have emerged as areas of high relevance to the MSME sector. It is recognised that the MSME units can effectively meet the two major public expectations viz. Cost effective and affordable medicines of given framework of excellent manufacturing process, technology, regulatory compliance, distribution system and prices.

On the export front, pharmaceutical SMEs in India have traditionally been less focussed on exports in comparison to large domestic firms. However, now they have become preferred partners for the

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