Indian Pharma Companies prescribe Contract Manufacturing for Growth

India’s contract manufacturing market is set to explode with a 41% growth in next three years to clock USD 2.6 bn by 2010 as per a study conducted by KPMG. This year India’s contract manufacturing industry is expected to reach turnover of USD 1.2 bn, up from USD 869 mn.

The report mentions the manufacturing activities in which Indian companies involved for contract manufacturing. It includes simple vaccines, solid & liquid dosage forms, active pharmaceutical ingredients and intermediates. Foreign acquisitions have helped Indian pharma companies in gaining global prominence and getting contract manufacturing deals.

Worldwide Contract manufacturing industry is expected to reach USD 50bn in 2009 and contract manufacturing of OTC and nutritionals is also expected to reach USD 110bn. The biggest players in this contract manufacturing market are expected to be India and China. India so far has been largely targeting US pharma companies for exploring contract manufacturing but regulatory changes in Europe would make it easier for the Indian companies to bag such contracts

Business of waste in India

As the penchant for low cost services has grown, some country’s habit of getting things done at low cost has also risen. Now its not just local people who are after raddiwala/bhangarwala it is municipal corporations in UK which are interested in washing off their dirt in India. It costs upto £148 to recycle a ton of rubbish but in India its costs only £40 almost a third. So, now British subcontractors are dumping waste in cost effective India as part of green and clean UK. The news has infuriated the country, which finds it difficult to get rid of its own waste, but not the businessmen.

India, like most of the developing country, has always been good dumping ground of waste, especially industrial waste. India for long has been hub of ship breaking industry. Most of this industry is located in Gujarat followed by some work in Mumbai and kolkatta; and together these places accounted of almost 90% of all ship breaking in the world till some years ago. There are around 170 yards in Alang, Gujarat, the nerve centre of ship breaking industry in India and it employs around 50,000 people. The ship scrapping activity contributes more than 200,000 tones of scrap every year to the re-rolling mills and thus accounting for 60% of domestic production of metal bars. This is the primary reason why government hasn’t banned the ship scrapping industry in India despite environmental concerns.

The Indian government is yet to ratify Basel Convention, but if it does than it will help a lot controlling unwarranted industrial waste into India and will also help in making this industry more organized.

Automotive Engineering Offshore activity gaining ground in India

India is steadily gaining ground in almost all kind of outsourcing and offshoring services. Automotive engineering offshore activity is also gaining ground. Currently automotive offshoring has been a small component of engineering offshoring activity in India. As per one of the estimation global engineering offshoring activity amounts to $10-15 bn and India accounts for just around 12% of this market. The global offshore engineering spend is expected to grow to anything between USD150-225 Bn by 2020 and India could have around 20-25% share of this industry. Automotive offshoring is expected to contribute a big chunk of this engineering offshore pie.

As per another recent survey by Frost & Sullivan, Indian automotive engineering service outsourcing industry is expected to clock a 32% growth by 2012-13 and is likely to generate USD 2.2 bn in revenues for the country in next two years. The report also emphasized on spin-off of automotive engineering services from IT sector to realize better growth opportunities.

Leading global automakers like Toyota, Daimler-Chrysler, Fiat, Ford etc source components from India. Both Toyota and Volvo source gear box for the automobile range from India. Daimler-Chrysler not just sources components but also uses IT services for integrating electronic gadgets in their cars. In fact Daimler-Chrysler sourced USD125 Mn worth of such components and software from India.