Gujarat attracts huge investments in nutraceuticals space

Over Rs 1,000 crore invested in state over the last two years

With international companies like Abbott and DSM setting up base in Gujarat, the state sure seems to be warming up to the nutraceuticals space. It has attracted investments of over Rs 1,000 crore in the this niche pharmaceutical segment in the last two years.

Apart from leading global players in the human nutrition space like Abbott India (subsidiary of the Illinois-headquartered pharma giant Abbott Laboratories) and Dutch life sciences company Royal DSM building manufacturing plants in Gujarat, a host of domestic players too have expressed interest in setting up nutraceutical manufacturing facilities in the state.

The commissioner of the Gujarat Food and Drugs Control Administration (FDCA), H G Koshia said, “Abbott alone is investing close to Rs 400 crore on the Jhagadia facility that will go onstream later this year. In all, investments of over Rs 1,000 crore have come in to Gujarat in the nutraceuticals segment in the last couple of years.”

Abbott has been allotted around 45-50 acres of land Jhagadia where it is setting up a facility to make the ‘Ensure’ range of nutritional drinks for elderly people and also paediatric nutritional drink called ‘PediaSure’. Dutch life sciences firm Royal DSM recently inaugurated a $ 10 million (Rs 60 crore) plant at Vadodara that will be a one-stop source for food, beverage and pharmaceutical manufacturers. The net land allotted to the company is around 10,000 square meters, and DSM has plans for future expansion at the site.

DSM will make Fortitech Premixes which are customized blends of functional ingredients from a comprehensive selection of vitamins, minerals, amino acids, nucleotides and nutraceuticals.

They are used in a wide range of products, including baby formulas, cereals, bars, dairy products, nutrition and sports drinks, juices, snacks, waters, candies and supplements.

On top of this, there are companies like Anil Bioplus that have announced investments of around Rs 150 crore at Halol near Vadodara to make calcium and sodium gluconates. This would mark the company’s entry into the nutraceutical space.

Gujarat Research Allopathic Foundation (GRAF) Laboratories Ltd is also in the process of setting up a nutraceutical facility near Ahmedabad with an investment of about Rs 150 crore.

As the new Drug Price Control Order (DPCO) 2013 has hit the revenues of pharma players hard, even small and medium sized companies are now trying to de-risk their business by diversifying into the nutraceutical space.

At least 25-30 small and medium companies have started making nutraceutical products in Gujarat by making small investments in product development and manufacturing, informed Chirag Doshi, chairman of the Gujarat State Board of the Indian Drug Manufacturers Association. Take for example, West Coast Pharmaceuticals, that has launched around 45-50 nutraceutical products in the last six to eight months.

However, heavy weights like Amway India, that were scouting for land in Gujarat have opted to invest outside the state. Amway chose to invest in the southern state of Tamil Nadu instead, where it plans to invest close to around Rs 500-550 crore to set up a manufacturing facility for nutrition products as well as cosmetics and other products.