The Hindu Business Line : No immediate challenge from China: Sun Pharma

Facing the test
Recent reports had suggested that India's pharma sector could face stiff Chinese challenge in the near future.
Outsourcing from abroad in this sector may go up soon.
Project Sikkim — the plant's first phase will be commissioned by March 2007 and the second phase in 2009.

Ahmedabad , Sept. 19

Sun Pharmaceutical Industries Ltd (SPIL) — which in February this year announced demerger of its innovative R&D projects into a separate, listed company — sees no challenge from China to the Indian pharmaceutical sector in the immediate future, a senior company official said on Tuesday.

"Not in terms of APIs but in terms of dosage, we could have some challenge from China. But we are far ahead of them in quality. The competition may start 10 years or so later," said the SPIL's Executive Director, Mr Shailesh Desai, here.

Recent reports had suggested that India's pharma sector could face stiff Chinese challenge in the near future.

Racing ahead

Mr Desai told reporters that in view of Indian companies racing ahead with R&D, outsourcing from abroad in this sector may go up soon.

Already, many Indian companies are engaged in contract manufacturing and many more are getting their products endorsed by international regulators such as USFDA.

He said SPIL's plans are at an advanced stage to demerge innovative R&D projects into a separate company, which will be listed in the next few months, with the company providing around Rs 250 crore, including Rs 200 crore in cash, to the new entity.

Although no budget has been fixed for it, it may raise money if necessary. But, in the long run, it will have to sustain itself.

The company has already commissioned a second bio-study centre and tripled capacity for in-house bio-study.

Over the next two to three years, it is increasing scientific manpower from 500 to 700 for projects on generic products, NCE and NDDS products, including pre-clinical.

SPIL's priorities

About the company's priorities, Mr Desai said SPIL is treating the US generics market as its highest priority. Sun Phrma has 14 of the 23 products in top three by generic market share and 50 of its products (ANDAs) are pending approval in the US. The company has three plants in the US and one of its plants in India is approved by America, which accounts for 21 per cent of the company's annual sales.

About its Project Sikkim, he said the plant's first phase will be commissioned by March 2007 and the second phase in 2009. Its capacity will be 300 crore units per annum with an increase of 20 per cent over existing global capacity. The plant area is one lakh sq ft in a five-acre plot.

In the next two to three years, SPIL sought a rapid expansion of its international business to 50 per cent of total sales. By the end of the current financial year, it expected a sales growth by 18 to 20 per cent. Post-demerger of innovative business, Sun Pharma would be spending 10 to 12 per cent of sales on R&D, he added.

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