Cover Story Market Trends
Pharmaceuticals Export from India Adequate logistics support required to retain top position
The scope of pharmaceuticals export from India is estimated to be US$ 25 billion by 2014, from the current US$ 10 billion, if the target of the Ministry of Commerce, Government of India has to be achieved by the exporters.Is it an uphill task, as some industry experts suggest? Cargotalk spoke to representatives from exporters, logistics companies, carriers and infrastructure service providers to find out the ground reality. Ratan Kr Paul 24 CARGOTALK MARCH 2012
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ndian drugs and pharma export has touched US$ 10.4 billion (` 47,500 crore) recording a growth of 16.1 per cent during the financial year 2010-11 with a CAGR of 15 per cent over the last five years. Category-wise Export Products (CEPs) during 2010-11 were formulations: 62 per cent, bulk drugs: 37 per cent and herbals: 1 per cent. During the year 2010-11, out of total 733 Drug Master Files (DMFs) filed with US Food and Drug Administration (USFDA), 360 have been filed from India, taking the total tally to 2,490 by March 31, 2011. This amounts to roughly around 32 per cent of the total type-II active DMFs with USFDA. Largest number of DMFs from any single country is filed from India with USFDA.
Council of India (Pharmexcil) and chairman cum managing director, Indswift Group, Indian export to North America i.e. both to USA and Canada accounts for almost 25 per cent of India’s total export amounting to US$ 2,571 million. Total number of CEPs as on July 2011 stands at 805, which accounts for around 25 per cent of Certificate of Suitability of Monographs of the European Pharmacopoeia (known as CEP) granted by European Directorate
for the Quality of Medicines (EDQM) to Indian companies. India has 841 market authorisations from Therapeutic Goods Administration (TGA), Australia as on July 2011. “Based on available information, it is estimated that during the current fiscal (2012-13) pharmaceutical export will touch US$ 13,500 million,” said Munjal. The Ministry of Commerce has decided to have policy interventions and special
According to NR Munjal, chairman, Pharmaceuticals Export Promotion
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efforts to increase the presence of Indian pharma industry in potential countries like China. The ministry is also boosting the overall pharma export from the country and has set a target of US$ 15.8 billion by 2013-14.
Opportunities for logistics service providers 5DDMHHY%KDWQDJDU
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“Pharma is one of the fastest growing industries in India and it has been so for CARGOTALK
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Cover Story Market Trends
the last few years. Pharma today is not just an attractive proposition for export out of India, but equally big on the domestic front,” said Raajeev Bhatnagar, chairman, UFM India. Hence, the opportunities for growth and need for improved logistics services and organised logistics service providers
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on both domestic and international front are very high. Ram Tiwari, director marketing, Shine Logistics, also maintained that there is good opportunity for pharmaceutical logistics service providers in India,
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if they are able to meet the required infrastructure. There is a growing demand in cool chain transpiration/warehousing and distribution. However, due to high air freight cost most of the pharma products are now moving by reefer ocean containers. Currently Shine offers total logistics solutions for pharmaceutical clients, which maintain the temtpreture range from (-) 20 oC to +25 o C. “Our packing can hold these temperature without any irregularity for 72 to 94 hours, we have temperature control warehouse at Mumbai airport maintaining the temperature range from 15oC to 25oC,” added Tiwari. Shine is handling temperature control consolidation services for air and ocean shipments. “Pharma sectors have the highest potential and are creating a lot of business opportunities whether in temperature control warehousing, refrigerated transportation or various innovations in packing, etc,” added Ashish Mahajan, director, Perfect Cargo Movers. Recently, Perfect Cargo Movers opened their Hyderabad branch with an objective to provide logistics services to pharma companies. “We have equipped our other stations as well to handle pharmaceutical business. We have advanced level discussion with a couple of foreign logistics companies to sign up for distribution of temperature control consignments in many countries,” Mahajan informed.
Carriers’ Perspective According to Carsten Hernig, regional director, South Asia, Pakistan and Middle East, Lufthansa Cargo, due the cost advantages and improved production facilities in India it can be expected that the growth trend of pharmaceutical export will be continued. At the same time recent restrictions imposed by the USFDA point out that there is a need to maintain a high focus on adherence to international standards and not to compromise on quality of production and logistics. “We expect further growth in the Indian pharmaceutical air export but we also see a task to further educate the market, on increasing the focus clearly on highest quality solutions when making logistic decisions,” he cautioned. 26 CARGOTALK MARCH 2012
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is growing at more than 10 per cent per annum. There are more than 74 USFDA approved manufacturing facilities in India (largest – outside US). “Pharma business in India has to grow for sure,” he stressed.
Airport Infrastructure Murat Bas, CEO, Celebi Delhi Cargo Terminal India appeared to be highly optimistic about the growth of pharmaceutical export from India. “The Indian pharmaceutical market is expected to reach US$ 55 billion by 2020. The market has the further potential to reach US$ 75 billion in an aggressive growth scenario. Hence it is a significant contributor in the world in terms of volume and stands 14 th in terms of value,” he emphasised. He also underlined that the Indian pharmaceutical industryy has been the front runner in a wide range of specialties
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Rene Peerboom, director, Air FranceKLM Cargo, pointed out that India is considered as growth market for export of pharmaceutical products due to India’s strengths of producing generics. In the next year, a number of patents of medicines will expire. It will create a good opportunity for Indian pharma export to grow in certain countries,” underlined Peerboom. “There is no denial that India has the greatest opportunity to manufacture and export pharmaceuticals, vaccines, herbal and related health-care products. Serious logistics services providers have already developed and trained
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dedicated manpower to service and handle this export vertical ical with in-house requisite warehousing facilities for maintaining unbroken cool ool chain,” viewed Keki Patel, cargo manager, nager, India and Nepal, Emirates SkyCargo. rgo. He also added that major carriers operating rating to and from India have also investedd in dedicated and differentiated handling of the product from acceptance to delivery point. Ashish Kapur, regional nal cargo manager – South Asia, Middle East and Africa, Cathay Pacific Airways, s, highlighted the fact that the Indian pharma harma industry is the 3 rd largest in the world rld by volume and CARGOTALK
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Cover Story Market Trends
involving complex drugs’ manufacturing, development and technology. With the advantage of being the highly organised sector, the pharmaceutical companies in India are growing significantly. “With such a tremendous growth expected in pharmaceutical sector, the air cargo traffic opportunities are bound to increase and we can see many freighter operations in the near future,” he said.
Munjal advocated for some urgent measures to be taken by the policymakers. “Market focus scheme that is suitable to markets has to be adopted, taking into consideration barriers levied by destination countries. For example, there are less or no tax levied on USA and Canada bound goods by LAC countries. We expect similar policies for the greater interest of the country’s economy,” he argued.
What more to do
Apart from the appeal of interest subvention scheme, Pharmexcil is also seeking government’s support to extend the benefits available for some of the industries (like textiles).
Munjal was of the opinion that there are some chunks in cold chain and storage facilities at majority of Indian airports/ seaports. “Of late, some corrective measures have been taken up and state-ofthe-art facilities have started functioning at Hyderabad and Mumbai airports, etc.,” he added.
“Availability of appropriate logistics to operate pharmaceutical products from India is witnessing regular improvement day by day. However, the critical factor of
operating pharmaceutical products from airports is the availability of temperature controlled zones for storage and processing of pharma products, still remains a challenge. Further, pharma products being time sensitive cargo, availability of modern transport infrastructure also poses a challenge,” admitted Bas. Bhatnagar maintained that the infrastructure at Indian airports needs improvement. “While interacting with the infrastructure providers and trade, it was revealed that there is a need for far greater emphasis and study should be done to ensure that Indian airports and ports are geared to handle the growing demand of pharmaceuticals industry in India,” he shared. According to Hernig, there are significant deficits because of limited transportation services for appropriate temperature regulated transportation on the landside. “Hyderabad airport is maintaining excellent cooling facilities which have actually triggered us to establish our Pharma Hub along with GMR in Hyderabad. At Mumbai Airport as well, there is an effective perishable center now, which has improved the situation there significantly. However, while the Mumbai airport continues to face severe other infrastructure restrictions, it affects the cool chain,” he stated.
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PHARMACEUTICAL ZONE AT HYDERABAD AIRPORT Hyderabad airport’s pharmaceutical zone has recently completed one year of its operation. Since commercial operations started there has been a steady movement of cargo through the pharma zone. Hyderabad Menzies Air Cargo (HMACPL) created this facility keeping in mind the World Health Organisation’s requirement of ‘Good Storage Practices’ for all pharmaceuticals during transit. HMACPL Pharma Zone has created an exclusive standard operating procedure (SOP) for handling pharma and biotech. Pharma Zone export now constitutes nearly 30 per cent of the total export. Since commencement of Pharma Zone in Jan 2011, from an average of about 230MT/month in the first quarter the airport is now moving over 1,000 MT/month.With the growth envisaged by the industry HMACPL expects its volume to grow further. HMACPL will continue to expand its world class facilities to attract more pharma products to move through Rajiv Gandhi International Airport, Hyderabad.The company will work with airline partners to provide an integrated cool chain solution including ‘Shipper Built Through Units’.These are state-of-the-art temperature controlled containers, which can be taken out of the aircraft and the terminal to the shipper’s premises to be loaded and unloaded, so that the integrity of the cold chain is protected from manufacturer to the market.
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TOP 10 DESTINATION COUNTRIES OF INDIA’S EXPORTS OF DRUGS, PHARMACEUTICALS & FINE CHEMICALS DURING APR10-FEB11 (IN INR CR)
COUNTRY
APR-FEB 2009-10
APR-FEB 2010-11
% OF TOTAL EXPORTS
CUM PERCENT
PERIOD ON PERIOD%
RANK
FY 2009-10 GR%
USA
8087.01
9910.84
23.45
23.45
22.55
1
27.09
UK
1464.70
1560.89
3.69
27.14
6.57
2
32.44
Russia
1162.22
1405.42
3.33
30.47
20.93
3
-14.90
Germany
1354.55
1402.76
3.32
33.79
3.56
4
-1.83
South Africa
1059.30
1294.57
3.06
36.85
22.21
5
3.28
Brazil
896.51
928.61
2.20
39.05
3.58
6
-15.42
Nigeria
819.05
917.86
2.17
41.22
12.06
7
-13.12
Netherlands
606.25
786.78
1.86
43.08
29.78
8
0.27
Kenya
478.56
762.72
1.80
44.89
59.38
9
1.32
Canada
693.17
747.37
1.77
46.65
7.82
10
-30.02 Source: CMIE/DGCIS
pharmaceutical products, a smooth and efficient export process is a pre-requisite, including the necessity to store goods at the appropriate temperatures. We see that the distribution regulations become more and more strict and pharma shippers want to be compliant with these regulations. Therefore India authorities have to make the necessary investments to meet these requirements to be ready for future growth,” he said. “We would like to have support from the authority, custodians and the nodal security agency to facilitate dedicated facilities for permitting refrigerated transport units to the manufacturer’s unit both for exports and imports of pharmaceuticals,” supplemented Patel.
He viewed that constraints can be resolved through availability of active cool containers in shipper/consignee facilities (warehouses). So far, due to customs regulations there is no established process to move active cooling containers from the airport to the shipper/consignee warehouses to avoid a discontinuation in the cool chain.
This needs a quick solution. Otherwise the high quality standards of transportation for certain goods can not be met and it will endanger India’s competitiveness on the world market. Peerboom added another crucial aspect. “Due to the sensitivity of the
Kapur also stressed on the strengthening of infrastructure for pharma handling. “This is a specialised product and needs to be handed meeting all special requirements, like temperature control. We need pharma zones, refrigerated trucking services, built –up facilities at shipper’s warehouse and thermal blankets and cold storages at the airport, which can maintain different temperature levels,” he added. CARGOTALK
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