'Machine manufacturers are upgrading themselves by investing in knowledge'

Besides the support from the State government, there are other factors that have boosted the growth of the Gujarat pharma industry. Rajesh Shah, Chief Managing Director, Maharshi Udyog, shares more details with Arshiya Khan

Gujarat pharmaceutical industry has completed a century, what has been the role of the allied sector in this long journey?

During the 1960s and 1970s the pharmaceutical industry mostly imported machines from Europe for their processing and packaging needs. These included companies well known for technology in their respective fields like Aeromatic, Glatt, Fete, Manesty, Kilian, Hofliger & Karg, Hassia, Sparkler, Stunk, Zanasi etc. But the mid 1970s saw the country going through a severe shortage of foreign exchange, and therefore, the Indian government introduced very high import duties and restrictive import licensing policies.

This forced all pharma companies to encourage some Indian engineering enterprises to manufacture machines locally. This was perhaps the only route for the pharma industry to enhance production and cater to the growing demands of the domestic market. This was a great opportunity for the Indian small scale engineering companies to provide machineries to the pharma industry, and thus, a scenario was created whereby hundreds of machinery manufacturers mushroomed to cater to the needs of thousands of pharma companies over a period of time.

How has the allied sector complemented the growth of the pharma industry in Gujarat?

Indian engineering entrepreneurs have made Indian pharmaceutical manufacturing cost much lower than less developed countries, not to talk of Europe and USA. This was made possible due to huge savings on capital investment of plant and machinery, besides cheap technical manpower costs.

Tell us about your company's contribution to the rising power of the Gujarat pharma industry?

Maharishi Group of Industries is a pioneer in sticker labelling technology since 1984. Later, the group entered into manufacturing of sticker labels using this sticker labelling technology. And now the company caters to complete solution for labelling. It does the labels not only for pharma industry, but also for cosmetic, food, beverages, pesticides and others. In the early 90s, very few companies used sticker labels. But after the revolution in packaging, pharma companies switched from glass containers to plastic containers. And sticker being the only foolproof solution for plastic containers, companies started using this new concept. This change to plastic bottles and sticker labels helped them increase their export growth in overseas countries where this is a standard packing. Hence, this was a plus point for exporters in export market.

What have been the growth drivers for the allied industry?

The high credentials go to strict quality standards adopted by the pharma machinery manufacturers in India, which have led some of the Indian companies entering into technical tie-ups/joint ventures with USA, Europe and South East Asian companies to manufacture their products in India and being marketed in all Asian and CIS countries.

Now the machine manufacturers are upgrading themselves by investing in knowledge. Many pharma machinery manufacturers often visit various countries just to observe the latest development in the machines and to follow those developments. In addition to this there are also other visible trends that can explain committed interest of Indian machinery manufacturers further:

• Machine makers are going for CNC machine to get quality output. Using more and more gadgets in the machine, like, VFD, PLC etc
• Many firms are getting ISO approval
• Importing of prototype machines
• Getting CE approvals for machines
• Collaboration and technology transfer
• Expanding to meet rising global demand
• Investing in HRD by taking professional to meet the challenges of international market.

Evidently, Indian pharma machines, which have already made a dent in the domestic soil, have also started making considerable forays into the international market. The growing acceptance of the Indian machines in foreign countries is illustrative of this trend.

What are the key concerns faced by the allied industry?

As such it is not identified specifically, but there are no tax benefits or any other benefits for allied industries.

What is the requirement (in terms of capital/ focus etc) of the allied industry in Gujarat?

For any allied industry like manufacturing machineries, systems and ancillary devices etc. used in pharma companies, have a capital requirement of upto Rs 4 crore depending upon the size and set up of the industry, location of the industry, product range and technology used for production.

Where do you envision the Gujarat pharma industry in the years to come?

Gujarat pharma industry holds a good future in terms of raw material/machinery, manpower etc. Besides this SEZs are also coming up in Gujarat. Entrepreneurship of Gujaratis plays a major role in improving the future of pharma industry. Clinical research is another area where Gujarat has developed. And few years down the line it is more likely to become a major centre for contract manufacturing, since there are many good manufacturers that have set up their base in Gujarat.

arshiya.khan@expressindia.com