Hardening Rupee To Dent Pharma Sector Exports

Rising rupee is now scuttling global flight of Indian pharma. The industry fears as much as 20% decline in exports and Pharmaceuticals Exports Promotion Council (Pharmexcil) has already pressed the panic buttons. Seeking support from the ministry, Pharmexcil has dashed off letters to Union minister for commerce Kamal Nath warning that the if the situation continued, retrenchment would be the only solution.

"The pharma industry will lose substantial export business and might be rendered non-competitive. We believe that the time is not far when we may have to retrench manpower. Further the 30% growth target will now be impossible to achieve," the letter stated.

Pharmexcil chairman D B Mody told ET: "we expect the exports to be down by about 18-20% this year due the rupee appreciation and its cascading effect on the industry."

However, players like Dishman Pharma have managed to insulate themselves by exporting in euros. Commenting on the hit taken by the industry due to rupee rise, CMD of Dishman Chemicals & Pharmaceuticals J R Vyas said: "This could be true for players who are not hedging their risks. Their procurement is in rupee and exports in dollar."

Last fiscal, the Indian pharmaceutical sector exports stood at $6.13 billion as against the country's total exports of $125 billion, contributing around 5%.

"International markets contribute 46% of Sun Pharma's turnover, so appreciating rupee hurts on several counts. The dollar impact reduces profits and growth of international operations, when translated into rupees. Sales of our US subsidiary, Caraco, increased by 45% in dollar terms, but in rupee terms the sales increase was a modest 30," a spokesperson of the Sun Pharma said.

Pharma industry sould be included in the thrust areas for policy support and be given relief in lines of textile and leather industry, Mr Mody said.

Among various suggestions for relief measures, the council has said that dual exchange rates be introduced by Reserve Bank of India where in exports may be allowed to convert their  dollar realization at Rs 43. Indian pharmaceutical industry provides direct employment opportunity to around 30 lakh persons and also support the ancillary sectors like printing, glass bottles and packaging.

"From a small scale industry to a large manufacturers, the exports will be affected as much for all by the rise in rupee. One of the solutions to this issue is to have a product mix with higher value addition and lower value product. Also the industry can follow the footsteps of IT sector by shifting their billing from dollars to Euros," said advisor to Crysil Solutions Sunil Parekh.

There will be reduction in exports as export oriented units as they may opt for de-bonding as the EOU Income Tax benefit will expire on March 31, 2009.

This should be extended and if not so then EOU Manufacturers should be allowed to shift their machinery to SEZ, the letter said.

(Ref: The Economic Times dated November 10, 2007)

Glenmark Pharmaceuticals Expands Business Presence In Nigeria

Glenmark Pharmaceuticals Ltd has informed that Glenmark Pharmaceuticals Nigeria Ltd, a subsidiary of the company, expanding its presence in the Nigerian market.

Glenmark started operations in April 2007 and has successfully created a market for its products in the country expecting sales of US $1.3 million by the end of this fiscal. Currently in Nigeria, the company is present in the areas of dermatology / gynaecology, anti-infectives and gastroenterology, and plans to additionally launch its products in the areas of resiratory, oncology and metabolic diseases.

A S Mohanty, director - formulations of the company, said, "Nigeria is the biggest market in West Africa and Glenmark has established its presence there in a very short span of time. We pan to double our business in 2008-09 and meet the US $10 million mark by 2012-13. OUr gastroenterology product Relcer-gel has done really well in Nigeria and we expect to sell more than half a million bottles by the end of FY 08".

At present, the company has 14 SKU registered in 12 months and plans to have another six new products in Nigeria. In additional, the company has plans to substantially increase its team in Nigeria in the coming fiscal and increase the presence of local talent in its sales and marketing team.

The company is one of the leading players in the Indian branded generics market, specifically in areas of dermatology and respiratory. Its products, Candid B and Ascoril, feature among the top 300 pharmaceuticals in India.

(Ref: The Chronicle Pharmabiz dated November 29, 2007)