Pharma exports from Gujarat to touch Rs 15k cr in FY13

Share of small and medium firms in exports from state is 25-30%; eyeing emerging economies such as African and Latin American nations

Gujarat, counted as one of the major pharmaceutical production hubs in the country, exported drugs worth Rs 15,000 crore during the 2012-13 fiscal, up around eight to nine per cent from the previous year.

Chirag Doshi, senior official of the Gujarat wing of the Indian Drug Manufacturers' Association (IDMA) informed that exports from the state is likely to touch Rs 15,000 crore by the end of this financial year. "This is up by around eight to nine per cent, compared to 2011-12," he added.

The share of small and medium firms in exports from the state is around 25-30 per cent, and is growing steadily. With an eye on on higher margins, Gujarat-based small and medium-sized pharmaceutical manufacturers are focusing on export markets, especially emerging economies such as African and Latin American nations.

Overall exports from pharma SMEs from the state is growing at a 12-15 per cent rate.

However, emerging economies like countries in Africa and Latin America is gaining the fancy of SME exporters from the state, evident from the fact that exports to these countries is clocking a compounded annual growth rate of 30-35 per cent, pointed out industry insiders.

Doshi, who runs a mid-sized pharma firm called Yash Medicare which makes generic formulations, further added that of the net exports by SMEs, the share of emerging markets is around 50-60 per cent.

Export markets offer better margins than domestic sales, said V Shah of Saga Laboratories, which exports oral dosage forms to countries in Africa, Latin America and the Commonwealth of Independent States.

Emerging markets are becoming popular export destinations because they are relatively easier to penetrate.

After tasting success in export markets, Saga Laboratories reduced its focus on domestic sales.

"When we had started in 1994, the proportion of domestic sales was 90-95 per cent of our net turnover. Gradually, this share has come down, and exports started rising. At the moment, we are exporting our entire production," Shah explained.

As IDMA Gujarat wing points out, the state's share in national pharma exports this year is around 20 per cent, while its share in domestic pharma production is around 28 per cent.

Pharma production for the domestic market this year was around Rs 18,000 crore from Gujarat, Doshi said.