How AP catching up fast in pharma space

Visakhapatnam: Andhra Pradesh, which boasts of having a world-class pharma cluster in Visakhapatnam and several big ticket projects complying with stringent norms recommended by the USFDA and the European Union (EU), is poised to make a big leap forward in tapping huge potential for exports of bulk drugs and formulations.

The Indian pharma industry is estimated at $26 billion, which is nearly two percent of world business turnover of $1,300 billion suggesting that there is huge potential to explore from both the Telugu speaking States. Recognising the potential, the Andhra Pradesh Government is also holding roadshows and programmes at various levels to lure investments.

Sun Pharma MD Dilip Sanghvi recently announced his desire to make a huge investment in a manufacturing unit in Andhra Pradesh. Industry bigwigs at a programme organised by CII had expressed hope of attracting more investors to the State.

Though there are no accurate figures available on the exports being done from the State as some of the companies are routing their products through their facilities in Chennai, Mumbai and Hyderabad, experts say the Jawaharlal Nehru Pharma City (JNPC) developed at Parawada near Visakhapatnam by the State Government under PPP mode is having internationally acclaimed common utilities and effluent treatment facilities.

Pharma investments have been made in Pydibhimavaram and Ranasthalam in Srikakulam, through an SEZ and non-SEZ area developed by Hetero at Nakkapalli and Divi's Lab at Bheemunipatnam, some units at Visakhapatnam Special Economic Zone (VSEZ) and certain units in East Godavari, Vizianagaram and Nellore districts. Almost 80 per cent of the units are located around Visakhapatnam which include biggies like Aurobindo, Pfizer, Reddy's, Divi's, Hospira, Laurus, Eisai, Mylan, Lupin and Nagarjuna Agrichem.

Air cargo facilities available at the Visakhapatnam International Airport and a container terminal for shipment in reefers from Visakha Container Terminal Private Ltd (VCTPL) helps the investors in reducing the logistics cost by ensuring timely and safe delivery of their products to various destinations. The ecosystem is considered good due to easy access to transport and availability of talent pool from local colleges and universities.

As Hyderabad, known as bulk drug industry capital in India, got saturated for further growth, several investors started new facilities in and around Visakhapatnam before bifurcation of Andhra Pradesh.

"This has led to creation of production facilities on par with norms stipulated by the international agencies. The availability of a huge stretch of coastline unlike land-locked Telangana also offers a window of opportunities for investments in Andhra Pradesh," Ravi Uday Bhaskar, Director General of Pharmexcil, told Bizz Buzz. He said during last financial year, the business turnover was $24.4 billion accounting for a growth rate of 18%. During current fiscal till the end of February, the turnover was $22.14 billion indicating that there is scope for further rise.

AP as a combined State was accounting for a share of 30 per cent of India's total exports. Now, both the States-TS and AP are contributing significantly for exports. Uday Bhaskar further said: "The focus is now on import-substitution in formulations and obtaining raw materials. Medical devices manufacturing at AP MedTech Zone near Visakhapatnam and other initiatives will help achieve self-reliance. There is scope for huge investments in fermentation technology and establishment of an exclusive park for production of basic chemicals. China accounts for two-third of the $1.7 trillion market in basic chemicals. Excipients used in manufacturing formulations is another area which needs utmost importance to reduce dependence on imports." Asked to comment on prospects in Andhra Pradesh, Jawaharlal Nehru Pharma City CEO PP Lal Krishna told Bizz Buzz that 10 per cent of volumes are manufactured in AP and 20 per cent in TS. As per the estimates, AP can produce 30 per cent of volumes compared with Indian manufacturing. Moreover, the Government of India has set a target of $130 billion for manufacturing by 2030 compared with $50 billion as of now. He said a lot of proactive steps are required by the Department of Pharmaceuticals, Government of India, including declaration of bulk drug parks and State support to bulk drug policy for self-sustainable India apart from exports.