Thursday, June 24, 2004 08:00 IST Our Bureau, Mumbai
The Indian pharmaceutical companies control more than 25 per cent of the $ 600 million (Rs. 2,760 crore) pharmaceutical market in the CIS countries except Russia. The market, which is estimated to be growing at an annual rate of about 8 per cent, currently provides a total export turnover for Indian companies from the CIS market is amounted to Rs. 700 crore.
According to industry sources, Russian market caters to three different classes of pharma products such as - high end products, products of middle level and absolutely cheap low end products.
While the MNCs control the high end category of products, which are mostly innovative and patented, Indians are dominant in the supply of middle strata products, which are manufactured at WHO approved manufacturing bases in India and are priced at medium ranges. The low end products are manufactured by the locals in plants that are not necessarily GMP complied, said sources.
Armenia, Azerbhaijan, Belarus, Kazakhstan, Kyrgyztan, Maldova, Tajikistan, Turkmenistan, Ukraine and Uzbekistan are major CIS republics.
All major pharmaceutical companies in the country export directly to CIS region. According to industry sources, it is risky to set up manufacturing subsidiaries or joint ventures in many of these countries on account of their political instability.
Problem of convertibility and apathy of the joint venture partner are other issues faced by corporates who tried to set up manufacturing subsidiaries in the region.
"Indian companies are aiming only towards exports. There is no plan from any Indian corporate to set up manufacturing bases in the CIS region," said a pharma analyst.
Ajanta Pharma is the only Indian company, which has tried to put up manufacturing joint ventures in the region. However, when these JVs did not work, the com-pany has opted to pull out from them. Nevertheless, Indian pharma exports to the region are growing at a steady pace of 6-8 per cent, said analysts.