Sector Specific - Pharmaceutical                

Pharma sector to recover trend, to grow 16% in 2009-10  (updated - 06 April 2009)
While most industrial sectors expect a negligible growth or contraction in exports during 2009-10, pharmaceutical exporters forecast a16 per cent increase, a survey by the Federation of Indian Chambers of Commerce and Industry (Ficci) revealed.
While five of the 11 sectors surveyed expect no expansion in exports, three expect modest growth of up to 5per cent. In fact, 61 per cent of the respondents felt that overseas sale of Indian goods would either contract or remain flat in the year.

Apart from a dip in orders from the US and the EU, exporters say demand from others like West Asia, the Association of Southeast Asian Nations (Asean) and Japan is declining at a faster pace.

Pharmaceutical exports from the country are expected to buck this trend and post a 13 per cent increase in overseas sale, the survey said. This could be because of lesser presence of Chinese pharma companies in the international market. And, expenditure on medicines is relatively inelastic to changes in income levels. However, the expected growth will be lower than the 23 per cent export growth in 2008-09.

The World Trade Organisation in a recent report had forecast a 9 per cent contraction in global exports, the sharpest fall since World War II. In this backdrop, Commerce Secretary Gopal KPillai had recently said India’s exports in the current fiscal would be at the same level as in the just-ended financial year 2008-09.

About half the respondents in the survey told Ficci that the depreciation of the rupee against the dollar has had only moderate impact on their earnings. A depreciating exchange rate against the greenback increases rupee earnings of exporters, and also makes Indian goods cheaper in foreign markets.

Even in 2008-09, many exporters felt their overseas sales would be weak. Handicrafts and marine product segment expect exports from their sectors to contract by a fourth.
Sectors which are expected to witness an expansion in exports of more than 10 per cent include engineering goods, pharmaceuticals, rubber manufactured goods as well as glass and ceramics.

Final exports on exports will be known by May 1, when the commerce ministry will release the export figures for 2008-09. In the 11 months up to February, overseas sales of Indian goods increased 7.3 per cent, against 23.7 per cent in the same period of the previous year.
Pharmaceutical exports from the country are expected to buck this trend and post a 13 per cent increase in overseas sale, the survey said

source - businessstandard

Pharma companies eye new markets to increase sales
Indian pharmaceutical companies whose global revenues were affected by their exposure to foreign currencies and slump in the US sales have seen significant revenue growth in the newer or emerging markets across continents.

Even drug majors such as Ranbaxy and Glenmark, which saw decline or near flat growth in their global revenues for the December 2008 quarter, have registered steep growth in the emerging markets such as Russia and Brazil.

The emerging market focus is to reap better dividends as and when the companies enlarge their product portfolio in these regions, analysts feel.

Glenmark, which registered a14 per cent decline in its net revenues during the quarter, saw its revenues from Asia, Africa and CIS (Commonwealth of Independent States) region leap almost 60 per cent. The company attributes it to its aggressive attempt to penetrate newer geographies.
“We will continue our emerging market strategy more aggressively. In the next couple of months, we will have several medicines registered in countries such as UAE and Egypt. The newer markets offer significant growth opportunities,” a Glenmark official said.

The importance of emerging markets increased after sales in the world’s largest drug market, the US, slowed down.
Analysts feel that Indian companies, who specialize in the production of low-cost alternatives to patented medicines, will find easy entry to several of these markets, including some of the “semi-regulated” regions in Asia and Africa.

While Russia continues to be the biggest market in the CIS region, Indian companies are also focusing on countries such as Ukraine, Kazakhstan and Uzbekistan. The companies, including Dr Reddys and Glenmark, have active presence in these regions.
Ranbaxy, which recorded 6 per cent increase in its global sales in the three-month period, saw an 18 per cent revenue growth in the emerging markets. “Emerging markets will continue to show the fastest growth for Indian drug companies as they are introducing new products in these markets. Product registration is a continuous process and hence growth,” Ranjit Kapadia of broking firm Prabhudas Liladhar said.

A recent KPMG report has highlighted the growth opportunities in the newer markets. "Indian companies are now also looking towards emerging markets such as Russia and other CIS nations, Eastern Europe, Brazil and other Latin American countries and South Africa. These markets, similar to Indian market, have branded generics and high entry barriers that lead to less competition and higher profitability," the report said.
source - businessstandard

 

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