Pharma production in Andhra likely to grow 15 per cent

State sees good growth in pharma, IT sectors: CII survey.

The pharmaceutical sector in Andhra Pradesh is likely to see a better performance during the period April 2008-September 2008, with the industry demand expected to increase by 15-20 per cent and production 10-15 per cent.

Capacity utilisation levels are likely to increase by 3-5 per cent while sales are projected to grow 5-10 per cent, according to the bi-annual industry monitor survey conducted by the Confederation of Indian Industry (CII)-southern region for October 2007-March 2008.

The industry performed well during October 2007-March 2008, compared with April 2007-September 2007. Production and sales grew 20 per cent and 15-20 per cent respectively. Exports increased by 10-15 per cent during the period, while capacity utilisation grew 10-25 per cent. The inventory levels remained unchanged. The pricing and the profit margins recorded a 2-3 per cent and 5 per cent growth respectively.

The survey, however, stated that the increasing competition in the industry is also constraining the small units. "The industry suggests for making suitable changes in the policy of tax-free zones, so that the price of drugs manufactured from such locations is not unduly competitive," it said.

CII's industry monitor survey, which was carried in Andhra Pradesh, Karnataka, Kerala, Puducherry and Tamil Nadu, with an objective of analysing the performance of top five sectors in each of these states during October-March of the financial year 2007-08, captured the views of senior executives of leading companies.

The top five sectors surveyed in Andhra Pradesh, which were identified on the basis of their contribution to the state gross domestic product (SGDP), were agro, manufacturing, pharmaceuticals, IT and textile industry.

According to the survey, the revenue and overseas billing of the IT sector shot up by 10-15 per cent and 15-20 per cent respectively. Despite the plummeting pricing to 10-15 per cent, profit margins were up 5 per cent. The employment levels too increased by as much as 40 per cent.

The industry predicts a 5 per cent growth in the IT industrial demand, with a growth in the order book position of 10-15 per cent, resulting in a 5-10 per cent increase in revenues. The overseas billing is also projected to increase by 15 per cent. Despite an expected decline in price to 5 per cent, the IT industry is likely to register a 5 per cent growth in profit margins.

While expressing concern over the lack of availability of right talents, the industry expressed that measures may be introduced to impart the required skills to the students at the college level to make them industry-ready.