According to a report published in pharmabiz.com, Greenfield projects becoming prohibitively costly for the SMEs and the Brownfield projects cannot augment significantly to the existing capacity. The future of the Indian SMEs is scary and bleak in the wake of rising expenses in plant operations.
“We at KDPMA look at clusters as one of the solutions to the various problems,” said, said Jatish N Seth, president KPMDA. Further, he stated that pollution was a concern and there was a need to set up set-up common effluent treatment plants as stand-alone facilities incur huge investment and maintenance costs. With rapid expansion of urban areas designated industrial zones are now dotted with residential buildings which is leading to socio-economic problems of various kinds.
“Clusters are an economical model because of common facilities utilised by all the industries. Now clusters need policies similar to SEZs with clear cut guidelines on land to lower cost of Greenfield projects because industrial property is too expensive. This would enable industry to keep the drug prices competitive and facilitate procurement for government enterprises easier and faster," said Seth at the first National Vendor Development Programme & Exhibition for the pharma and allied sector being held in Bengaluru.
Italy’s bulk drug industry which was almost wiped out and became vibrant when operated as clusters. It is imperative to augment research and development where industry-academy together need to develop medicines just like the universities in the UK and US.
The government of India and Karnataka have assigned ministries to look into the problems and progress of SMEs. They need to steer the pharma clusters and research incubation centres in a designated area. The government enterprises present at this National Vendor Development Programme need to ensure that Karnataka SME pharma are part of their drug procurement too, said the KDPMA president.
India is recognised as a global pharmacy. Around 70 percent of the patients depend on medicines manufactured in India. The SMEs contributes 39 per cent of the Rs.1,30,000 crore Indian pharma industry with volumes above 60 per cent. SMEs, being the backbone of the pharma industry are engaged in contract manufacturing for large companies and this capability allows them to upgrade constantly.
"In Karnataka, units which started as small enterprises are now large players. These units help chip in 10 percent of revenues to national pharma turnover. Though all this would be music to ears, the future of SMEs is scary and bleak. The escalating manufacturing costs have seen India lose to China in bulk drug production. It will not be long before we see a similar situation in formulations. Only the concept of clusters could drive growth and competitiveness," he said.