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Virendra Pandit

To foray into South-East Asian market

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Ahmedabad Jan. 24 Gujarat-based pharmaceutical companies are making a beeline to tap the huge pharma market emerging in South-East Asia. After companies such as Zydus Cadila and Claris, Marck Biosciences Ltd — manufacturer and marketer of large and small volume parenterals in India — has also joined the bandwagon.

It is investing Rs 72 crore to expand production capacity at its Kheda-based plant and is set to foray into the $6 billion South-East Asian pharmaceutical market.

The fresh investment is towards creating additional capacity of large and small volume parenterals and expanding Marck's product basket in sterile dosages.

Market Share

Currently, it has an installed capacity of 65 million units for SPV and 29 million units for LPV, which are being increased to 230 million and 61 million units respectively. By March 2007 this expansion would be completed, its managing Director, Mr Bhavesh Patel, told Business Line here.

The South-East Asian countries represent a total market of 588 million people and a combined GDP of $2.2 billion. Marck Biosciences has presence in about 60 countries across the world. Marck is aiming at 10 per cent of the total market in IV fluids, diluents and ophthalmics, which are niche markets and provide greater opportunities with lesser competition in these segments.

The company expects its turnover of Rs 40 crore in 2006 to zoom to Rs 100 crore in 2007, thanks to the versatile manufacturing model it has adopted. It already produces more than 70 products and its new offering would include those related to fluid therapy, ophthalmology, respiratory system etc.

A "mid-size company with big-size dreams," Marck has already got the accreditation to operate in the Philippines and has recently dispatched their first shipment to that country.

It is now in the process of setting up their full-fledged distribution network there. The Philippines is the leading pharma market in South-East Asia with a size of $1.5 billion. Its pharma market is growing at about 12 per cent annually. It is one of the poorer countries in the ASEAN region, and the drug prices are amongst the highest in Asia.

Phenomenal Growth

Armed with this accreditation, the company has applied for registration and is awaiting permission to start operations in Malaysia, Singapore, Thailand, Burma, Vietnam and Indonesia, Mr Patel said. With these plans to foray into the South-East Asian countries by mid-2007, the company would start operating with modest volumes in this region with the initial focus on the ophthalmic range of products, he said.

The global prescription market is expected to grow by 5.6 per cent and achieve sales between $665 and $685 billion in 2007 compared with sales of $620 billion and 6.7 per cent growth in 2006.

Geographical balance for the pharma sector continues to move from the US towards developing economies such as China, India, Brazil and Turkey. These countries are expected to contribute 30 per cent growth in 2007. Within Asia, South-East Asia has registered phenomenal growth in the past couple of years and momentum has been maintained.

In Malaysia, 50 to 60 per cent pharma market is in private sector. Prescription drugs are often available over the counter as in many Asian countries. Singapore has the highest GDP per capita of all the Asian Tigers and vital health indicators are akin to many in the western world.

The Thai market is dominated by generic drugs and its Government's relationship with international pharmaceuticals industry continues to be "uneasy" largely due to country's preferential treatment of domestic producers.

More Stories on : New Projects | Pharmaceuticals | Gujarat

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