chemical pharma

7/31/2019 Chemical Pharma

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Human Resource and Skill Requirements for the


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Disclaimer for the Skill Gap Report:

NSDC engaged IMaCS (ICRA Management Consulting Services Limited) to prepare this report, which is based on independent researchand analysis done by IMaCS. This report is not based or derived from any other report or research paper. Any similarity with any otherpaper may purely be a co-incidence.

All rights reserved. All copyright in this report and related works is solely and exclusively owned by NSDC. The same may not bereproduced, wholly or in part in any material form (including photocopying or storing it in any medium by electronic means and whether ornot transiently or incidentally to some other use of this presentation), modified or in any manner communicated to any third party exceptwith the written approval of NSDC.

This report is for information purposes only. While due care has been taken during the compilation of this report to ensure that the information is accurate to the best of IMaCSs andNSDCs knowledge and belief, the content is no t to be construed in any manner whatsoever as a substitute for professional advice.

IMaCS and NSDC neither recommend nor endorse any specific products or services that may have been mentioned in this report and nor do they assume any liability or responsibi lityfor the outcome of decisions taken as a result of any reliance placed in this report.

Neither IMaCS nor NSDC shall be liable for any direct or indirect damages that may arise due to any act or omission on the part of the user due to any reliance placed or guidancetaken from any portion of this report.


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Human Resource and Skill

Requirements of the

Chemicals andPharmaceuticals Sector

Study on mapping of human resource skill gaps in

India till 2022


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Human Resource and Skill Requirements of the Chemicals and Pharmaceuticals Sector

Page 2 of 59

Table of Contents

1. Environment Scanning and Competitiveness of Chemicals & Pharmaceuticals Sector ........ 51.1. Overview ................................................................................................................................. 51.2. Chemicals ................................................................................................................................ 51.3. Pharmaceuticals .................................................................................................................... 19

2. Human Resource and Skill Requirements in the Chemicals and Pharmaceuticals Sector .. 342.1. Current Employment in the Chemicals and Pharmaceuticals Sector .................................... 342.2. Skill Requirements and Skill Gaps in the Chemicals Segment ............................................. 382.3. Skill Requirements and Skill Gaps in the Pharmaceuticals Segment ................................... 452.4. Projected Industry Size and Human Resource Requirements ............................................... 532.5. Skill Pyramid ........................................................................................................................ 552.6. Focus Areas for Skill Building .............................................................................................. 56


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List of Figures

Figure 1: Composition of Petrochemical industry .................................................................................. 6Figure 2: Composition of Chloro Alkali industry ................................................................................... 8Figure 3: Composition of Inorganic industry .......................................................................................... 9Figure 4: Share of nutrients of total fertiliser consumption .................................................................. 10Figure 5: Composition of Dye & Dyestuff industry ............................................................................. 11Figure 6: IIP for chemicals ................................................................................................................... 12Figure 7: Value chain of the Chemical Industry ................................................................................... 13Figure 8: Methanol usage in various sectors ......................................................................................... 14Figure 9: Share of different states in production of chemicals* ........................................................... 15Figure 10: Share of different regions in Fertiliser production .............................................................. 15Figure 11: World pharmaceutical sales ................................................................................................. 19Figure 12: PFCE on medical care & health services (Rs crore) .......................................................... 20Figure 13: Pharmaceutical Exports (Rs. crore) ..................................................................................... 21Figure 14: Share in exports ................................................................................................................... 21Figure 15: Pharmaceutical imports (Rs. Crore) .................................................................................... 22Figure 16: Pharmaceutical imports by countries ................................................................................... 22Figure 17: Value Chain of Pharmaceuticals ......................................................................................... 23Figure 18: Share of various therapeutic segments ................................................................................ 26Figure 19: Drivers of competitiveness of the Pharmaceutical industry ................................................ 33Figure 20: State-wise share in employment in the Chemicals Segment .............................................. 35Figure 21: Profile of people employed in the Chemicals Segment ....................................................... 38Figure 22: Profile of people employed in the Pharmaceuticals Segment ............................................. 45Figure 23: Skill Pyramid for the Chemicals and Pharmaceuticals Industry ......................................... 55


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List of Tables

Table 1: Trends in Petrochemical production, capacity, imports & exports (000 MT) ......................... 6Table 2: Trends in Organic chemical production, capacity, imports & exports (000 Metric Tonnes

(MT)) ...................................................................................................................................................... 7Table 3: Production of major organic chemicals (000 MT) .................................................................. 7Table 4: Trends in alkali chemical production, capacity, imports & exports (000 MT) ....................... 8Table 5: Trends in inorganic chemical production, capacity, imports & exports (000 MT) ................. 9Table 6: Trends in pesticide production, capacity, imports & exports (000 MT) ............................... 10Table 7: Trends in fertiliser production, capacity, imports & consumption (000 MT) ....................... 11Table 8: Trends in Dye & Dyestuff production, capacity, imports & exports (000 MT) .................... 12Table 9: Key Players in the chemical industry* ................................................................................... 16Table 10: End use sectors ..................................................................................................................... 16Table 11: Key Players ........................................................................................................................... 28Table 12: Current employment in Chemical Industries ........................................................................ 34Table 13: Functional distribution of human resources in the Chemicals Segment ............................... 35Table 14: Functional distribution of human resources in the Pharmaceuticals Segment ...................... 36Table 15: Educational qualifications of personnel employed in the Chemicals and Pharmaceuticals

Segment ................................................................................................................................................ 37Table 16: Skill requirements and skill gaps in the Chemicals Segment ............................................... 38Table 17: Skill requirements and skill gaps in the Pharmaceuticals Segment ...................................... 46Table 18: Projected Industry Size ......................................................................................................... 53Table 19: Human Resource Requirement for the Chemicals and Pharmaceuticals Industry (in 000s)53Table 20: Incremental human resource requirement function-wise (in 000s) for the Chemicals and

Petrochemicals sector ............................................................................................................................ 54Table 20: Incremental human resource requirement function-wise (in 000s) for the Pharmaceuticals

sector ..................................................................................................................................................... 54Table 22: Incremental human resource requirement education-wise Chemicals, Petrochemicals,

and Pharmaceuticals sector ................................................................................................................... 55Table 23: Focus areas for skill building in Chemicals and Pharmaceuticals ........................................ 56


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1. Environment Scanning and Competitiveness of Chemicals &Pharmaceuticals Sector

1.1.OverviewIndia manufactures more than 70,000 chemicals and is the 12th largest producer of chemicals in the

world. The size of Indias Chemical industry estimated to be around Rs. 1,60,000 crore ($35 billion)1.

The chemicals industry constitutes about 3% of GDP and 17.6% of manufacturing sector. India share

of the global market -1.9% of global sales and 1.5% of international trade.

The Indian pharmaceutical industry is one of the worlds largest and most developed, ranking fourth

in volume terms and thirteenth in value terms. The Indian domestic pharmaceutical market size is

estimated at Rs. 43,300 crore in 2008.The country accounts for an estimated 8% of global production

and 2% of world markets in pharmaceuticals

1.2.Chemicals1.2.1. Industry size and GrowthThe major sub sectors of chemical industry are:

Petrochemicals Organic chemicals Alkali Chemicals Inorganic Chemicals Pesticides Fertilisers Dye and Dyestuff

PetrochemicalsPetrochemicals are chemical products made from raw materials of petroleum (hydrocarbon) origin.

The distillation of crude oil yields naphtha, gas oil, natural gas (NG), and petroleum gases which are

mainly used as feedstock by the petrochemicals industry. The cracking (process whereby complex

organic molecules are converted to simpler molecules) of naphtha/NG yields six major

petrochemicals. These are olefins such as ethylene, propylene, and butadiene; and aromatics such as

benzene, toluene, and xylene. While NG-based crackers invariably produce light olefins (mainly

1 Investment Commission of India


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ethylene), naphtha-based crackers have a higher share of propylene and aromatics (benzene and

xylenes).

Indias petrochemicals production facility presently is categorised into five groups as in the figure

below. Polymers are the largest segment of the Indian petrochemicals industry, accounting for around64% of Indias aggregate production of major petrochemicals, followed by synthetic fibres (26%).

Figure 1:Composition of Petrochemical industry

Source: Ministry of Chemicals & Fertilisers, IMaCS Analysis

Table 1: Trends in Petrochemical production, capacity, imports & exports (000 MT)

2002 2003 2004 2005 2006 2007

Capacity 7,017 7,110 7,323 7,798 7,984 9,336

Production 6,235 6,554 7,006 7,349 7,467 8,223

Capacity Utilisation (%) 88.9 92.2 95.7 94.2 93.5 88.1

Imports 689 713 818 859 1,167 1,225

Exports 702 972 1,037 1,270 1,005 1,346

Consumption 6,222 6,295 6,787 6,938 7,629 8,102


SyntheticFibres28%

Polymers63%

Elastomers1%

Surfactants7%

PerformancePlastics

1%


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Organic Chemicals

Organic chemicals are a group of petroleum-derivative chemicals used as intermediates to produce

other chemicals, which, in turn, are used to manufacture a wide variety of end-use products, including

construction materials, apparel, adhesives, plastics, and tyres. The majority of the organic chemicalsare derived from benzene, a petroleum derivative.

The key organic chemicals are acetic acid, methanol, formaldehyde, acetaldehyde, chloromethane,

phenol, benzene and its derivatives (that include nitrobenzene, aniline, ortho nitro chlorobenzene

(ONCB), para nitro chloro-benzene (PNCB).

Indias organic chemicals production was estimated at around 1,736 kilo tonnes (kt) during 2007-

2008. Imports accounted for 36% of the total domestic consumption in 2007 up from 29% in 2002.

Table 2: Trends in Organic chemical production, capacity, imports & exports (000 Metric Tonnes

(MT))

2002 2003 2004 2005 2006 2007

Capacity 1,281 1,403 1,601 1,669 1,812 1,889

Production 1,167 1,353 1,474 1,506 1,545 1,545

Capacity Utilization (%) 91.1 96.4 92.1 90.2 85.3 81.5

Imports 477 399 598 568 663 867

Exports 17 57 46 63 53 62

Consumption 1,627 1,695 2,026 2,011 2,155 2,350Source: Ministry of Chemicals & Fertilisers, IMaCS Analysis

Table 3: Production of major organic chemicals (000 MT)

2003 2004 2005 2006 2007 2008

Methanol 362 389 392 387 396 377

Acetic Acid 252 308 288 306 288 373

Formaldehyde 182 199 196 249 235 274

Acetaldehyde 126 127 140 159 164 208

Chloromethane 79 90 92 94 92 99


Alkali Chemicals

The Chloro Alkali industry consists of Soda Ash, Caustic soda and liquid chlorine. Caustic soda, finds

use in various applications, such as, finishing operations in textiles, manufacture of soaps and

detergents, control of pH (softening) of water for various applications and general cleansing or


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bleaching applications. Glass manufacturing is the largest application for soda ash. Liquid chlorine is

used primarily for various bleaching applications, across paper and pulp, textiles and other industries.

Figure 2: Composition of Chloro Alkali industry


The total production of the sector stood at 52,69,000 MT in 2007.The sector had a CAGR of 3.9%

between 2002-2007.Imports accounted for 7% of the total domestic consumption.

Table 4: Trends in alkali chemical production, capacity, imports & exports (000 MT)

2002 2003 2004 2005 2006 2007

Capacity 6,057 6,256 6,393 6,422 6,603 7,072

Production 4,342 4,792 5,070 5,272 5,475 5,269

Capacity Utilisation (%) 71.7 76.6 79.3 82.1 82.9 74.5

Imports 203 220 201 239 711 409

Exports 107 239 217 359 230 179

Consumption 4,438 4,773 5,054 5,165 5,956 5,499


Inorganic chemicals

The key organic chemicals are titanium dioxide, carbon black, and calcium carbide. Other inorganic

chemicals include aluminium fluoride, potassium chlorate, red phosphorous, and sodium chlorate. The

industry caters to a host of end user industries such as paints and dyestuff, tyres, leather, paper,

detergent, explosives, rubber chemicals, cigarette, etc.

Soda Ash40%

LiquidChlorine

24%

CausticSoda36%


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Figure 3:Composition of Inorganic industry


Indias Inorganic chemicals production was estimated at around 6,02,000 MT in 2006-07.India has

turned into a net exporter in 2007.Exports of inorganic chemicals have increased from 40,439 tonnes

in FY2002 to 1, 01, 000 tonnes in 2007. Carbon black dominates exports with a share of 59%.

Table 5: Trends in inorganic chemical production, capacity, imports & exports (000 MT)

2002 2003 2004 2005 2006 2007

Capacity 487 487 568 642 742 749

Production 374 404 441 508 544 602

Capacity Utilisation (%) 76.8 83 77.6 79.1 73.3 80.4

Imports 53 99 116 99 131 29

Exports 40 34 64 153 121 101

Consumption 387 469 493 454 554 630


Pesticides

With expanding agricultural production supported by good monsoons, improvement in technology

and growing awareness among farmers, the consumption of agrochemicals has been on the upswing.

The agrochemicals industry is made up of insecticides (74%), herbicides (20%) and fungicides (6%).

Cotton, paddy or rice, vegetables and fruits account for over 80% of the pesticide consumption in the

country. While cotton is planted on about 4.5-5% of the total cultivable area (on about 9.3-9.6 million

hectares or mha), it accounts for about 33% of pesticide consumption in India, followed by rice

(23%), vegetables (9%), wheat (8%), and pulses (6%).

TitaniumDioxide

11%

Calciumcarbide

15%

CarbonBlack70%

Others4%


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India is one among the most dynamic generic pesticides manufacturing countries with a total market

size of Rs 8,900 crore per annum. And yet, Indias own average consumption of pesticides is very low

at 480 gm per hectare which results in crops worth about Rs 12,000 crore being destroyed annually by

pests.

Table 6: Trends in pesticide production, capacity, imports & exports (000 MT)

2002 2003 2004 2005 2006 2007

Capacity 138 139 134 146 148 145

Production 82 70 85 94 82 85

Capacity Utilisation (%) 59 50 63 64 55 58

Imports 1 1 3 3 3 3

Exports 13 26 26 27 27 33

Consumption

70 45 62 70 58 55


Fertilisers

The Indian chemical fertiliser (hereafter referred to only as fertilisers) industry mainly concerns

itself with providing the three primary nutrientsN, P, and Kto the agricultural sector. While

nitrogen is expressed in the elemental form (N), phosphorous and potassium are expressed as their

oxide forms, viz. phosphate (P2O5) and potash (K2O). Besides, being used as fertilisers themselves,these three nutrients are combined to produce several complex fertilisers.

Figure 4: Share of nutrients of total fertiliser consumption


Nitrogen64%

Phosphorous

24%

Potassium12%


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The fertiliser consumption was 22,57,000 MT in 2008. The fertiliser consumption has been growing

at a CAGR of 7.7 % for the period from 2004 to 2008. The share of imports of total consumption of

fertilisers was 34% in 2008.

Table 7: Trends in fertiliser production, capacity, imports & consumption (000 MT)

2004 2005 2006 2007 2008

Total Capacity 17,568 17,688 17,748 18,020 18,143

Production 14,183 15,343 15,536 15,965 14,617

Imports 2,130 2,779 5,300 6,153 7,767

Consumption 16,799 18,398 20,340 21,651 22,570

Source: Ministry of Chemicals & Fertilisers, Fertiliser Association of India, IMaCS Analysis

Urea is the most widely consumed fertiliser in the country, accounting for around 83% of total N

consumption, and 53% of the total fertiliser consumption. The share of urea in total fertiliser

consumption averaged 52% during FY2004-08. Other major fertilisers consumed include Di-

ammonium phosphate (21% of total consumption in 2008), and Muriate of potash or MOP (66% of

consumption and 8% of total fertiliser consumption).

Dyes and Dyestuffs

The consumption of Dyes and Dyestuffs is closely related to the performance of the textile industry.

The Dye & Dyestuff industry has grown at a CAGR of 5.7 % from 2002 to 2007.

Organic pigment colours account for the largest share of dye industry followed by sulphur dyes and

Azo dyes.

Figure 5:Composition of Dye & Dyestuff industry


OrganicPigmentColours

50%

SulphurDyes/Sulphur

Black18%

Azo Dyes11%

Others21%


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Figure 9: Share of different states in production of chemicals*

*Excluding Fertilisers and pharmaceuticals


Figure 10: Share of different regions in Fertiliser production


Gujarat51%

Maharashtra7%

Uttar Pradesh8%

Tamil Nadu6%

Punjab4%

Rajasthan4%

MadhyaPradesh

4%

Andhra Pradesh4%

Others12%

East6%

North33%

South14%

West47%


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Table 9: Key Players in the chemical industry*

Company Products

Reliance Industries Limited (RIL) Oil & gas exploration, refining, polymers, polyesters.

Gas Authority of India Limited (GAIL) Petrochemicals

Haldia Petrochemicals Limited Petrochemicals

Tata Chemicals Alkali chemicals, fertilisers.

Ciba Textile dyes,additives, pigments and polymers.

Rallis Pesticides, Fertilisers

Hindustan Organic Chemicals (HOCL) Organic Chemicals

Gujarat Narmada Valley FertilisersCorporation

Fertilisers, Organic chemicals

* Indicative and not exhaustive

1.2.4. Demand DriversGrowth in End use sectors

Chemicals are used across various industries as intermediates. The major end user sectors of thechemical products are depicted in the following table. The overall growth in Manufacturing and

Agriculture sector of the economy is the key demand driver for the chemical products.

Table 10: End use sectors

Chemical End Use Sector

Petrochemicals Plastic products and manmade fibre (MMF) based textiles

Organic chemicals Construction materials, apparel, adhesives, plastics, and tyres

Alkali Chemicals Soaps & Detergents, Textile, Paper & Pulp, Glass

Inorganic Chemicals Construction, automobiles, white goods, capital goods and heavy industries

Pesticides Agriculture

Fertilisers Agriculture

Dye and Dyestuff Textiles

Note: The demand drivers for textiles & apparels, automobiles, construction are covered in detail under the

respective industry reports.


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Low per capita consumption of chemicals

Petrochemicals: The low per capita consumption of polymers in India, presently at around 6 kg per

capita per annum, indicates a potential for further strong demand growth in the future. The growth in

per capita incomes in the country) would also lead to a rise in polymer consumption.

Organic Chemicals: There is a significant scope for growth in the long term with the per capita

chemicals consumption being only 5 kg per annum, much lower than the comparable figures in the

developed markets.

1.2.5. Policy and Regulatory environmentCorporate Responsibility for Environmental Protection: The Ministry of Environment & Forest

(MoEF) has launched the Charter on "Corporate Responsibility for Environmental Protection

(CREP)" in March 2003 with the purpose to go beyond the compliance of regulatory norms for

prevention & control of pollution through various measures including waste minimization, in-plant

process control & adoption of clean technologies.

Petrochemical Technology Upgradation Fund (PTUF) and a Plastic Development Council (PDC):

The fund will provide subsidised loans for the polymer processors and the textiles industry. The PDC

will be part of a drive to develop plastic export parks that will cluster around future petrochemicalzones

Petroleum, Chemicals, and Petrochemical Investment Regions (PCPIR): PCPIRs primarily aim to

increase upstream and downstream investment by creating world-class infrastructure, increasing

domestic demand and per capita consumption of polymers and plastics, adding value to the domestic

plastics processing industry through modernisation and R&D, and achieving environmentally

sustainable growth. Three sites have been selected to become PCPIRsDahej in Gujarat; Haldia in

West Bengal; and Vishakhapatnam in Andhra Pradesh.

FDI: 100% FDI under the automatic route is allowed for all chemical items except hazardous

chemicals where government and FIPB approval and license to manufacture are required.


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1.2.6. Key Success factorsCo-Marketing alliances: In order to increase market penetration and increase their presence in select

segments, companies need to enter into product specific marketing arrangements. This would benefit

the Indian companies due to synergy between the quality of products and marketing strengths of

MNCs who hold registrations for a number of products in different countries. Industry could consider

alliances with Middle- East countries, which have an enormous feed stock advantage.

Scaling up: Consolidation is required to increase competitiveness especially for scale of

manufacturing, logistics, marketing, R&D and raising finances. It is necessary to move towards

consolidation to have access to large plants and cheaper raw materials. In the area of specialty

chemicals, through consolidation the industry can gain knowledge of specific chemistry and build

relationship with key customers.

Adopt globally acceptable accreditations: Adopt international best practices and accreditations will

help in brand building as well as improve international efficiencies.

1.2.7. Key Risk factorsCrude oil prices: Persistent high crude oil prices remain a source of concern for the industry as it is

the key source of raw materials and also affects the prices of substitutes such as natural gas. High

crude oil prices are pushing up naphtha prices, which could cause petrochemicals prices to increase,

and cause slow demand for downstream petrochemical products.

Availability of Natural Gas: India also faces a deficit in the supply of NG, which is an efficient

source for the production of light olefins. Given the present supply deficit, for the foreseeable future,

the petrochemical sector is expected to remain lower in priority for allocation of NG.

Threat of Imports: The petrochemical sector in Asia is undergoing fundamental change due to three

key forces. The first is the massive expansion of Asian petrochemicals currently under way. The

second is the rapid emergence of China as the largest petrochemical producer in Asia. The third is the

sharp rise in production capacity in the Middle-East. Imports as a percentage of total consumption for

certain chemicals, especially Organic chemicals, are significantly high (36% in 2007). Continued

reduction in import duty tariffs has resulted in proliferation of imports and has affected the pricing

power of domestic manufacturers.


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1.3.Pharmaceuticals1.3.1. Global pharmaceutical Industry

The global pharmaceutical market reached US$712 billion in 2007, up 6.4% from the previous yearsales of US$649 billion. The global pharmaceutical market is expected to grow 4.5-5.5% in 2009, a

rate similar to forecast growth of 5% in 2008. The global pharmaceutical sales to estimated to surpass

US$820 billion in 20092, reflecting sustained double-digit growth in key emerging countries tempered

by a slower pace in more established markets.

Figure 11: World pharmaceutical sales

Source: IMaCS Industry Comment-The Indian Pharmaceuticals Industry, March 2009

This includes the US, where growth is expected to be in the 1-2% range for both 2008 and 2009. In

2008, the US pharmaceutical market, the worlds largest, is forecast to grow 1-2% to US$287-297

billion. Contributing to the slower growth is less-than-expected demand for recently introduced

products, as well as the economic climate, which appears to be having an impact on doctor visits and

pharmaceutical sales.

The top five EU countries (France, Germany, Italy, Spain and the UK) are forecast to grow 3-4% in

2009, reaching sales of US$162-172 billion. In Europe, growth driven by the continued aging of the

regions population and rising demand for preventive care will be tempered by the increased impact of

health technology assessments, and the decentralization of government healthcare budgets. Japan, the

worlds second-largest market, is expected to see higher growth of 4-5% in 2009, reaching US$84-88

billion.

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Goods Administration (TGA), Australia and Health Protection Branch Canada have approved scores

of plants in India. Indias exports of drugs and pharmaceuticals have registered strong growth during

the last few years. Exports have increased at a 5-year CAGR of 18% to around Rs. 29,100 crore in

2007-2008. Indias pharmaceutical exports are primarily to US, Germany, Russia, UK, and

Nigeria.US is the largest export market accounting for 19% of the exports in 2007-08. India exports

full basket of pharmaceutical products comprising intermediates, APIs, Finished Dosage

Combinations (FDCs), biopharmaceuticals, vaccines, clinical services, etc., to various parts of the

world.

Figure 13: Pharmaceutical Exports (Rs. crore)

Source: Report of the Task Force, Ministry of Commerce & Industry, December 12, 2008

Figure 14: Share in exports


Formulations account for 54% of the export value followed by bulk drugs & intermediates. Others

include Herbal, Ayurvedic and Homeopathic drugs etc.

15,21317,858

22,116

26,89529,140

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

2004 2005 2006 2007 2008

CAGR

18%

Formulations54%

BasicDrugs, Fine

Chemicals &Intermediates

44%

Others2%


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Imports

The import value of pharmaceuticals was Rs. 6,680 crore in 2007-08. The imports are mainly raw

materials, which account for around 70% of the imports. Imports have been growing at a CAGR of

18.4% for the period 2002-03 to 2007-08. The key exporting countries to India are China,Switzerland, US and Germany. China is the largest exporter to India and accounted for 40% of the

import value in 2007-08.

Figure 15: Pharmaceutical imports (Rs. Crore)

Source: Report of the Task Force, Ministry of Commerce & Industry, December 12, 2008, IMaCS Analysis

Figure 16: Pharmaceutical imports by countries

Source: Report of the Task Force, Ministry of Commerce & Industry, December 12, 2008, IMaCS Analysis

2,958 3,169

4,551

5,852

6,680

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

2004 2005 2006 2007 2008

CAGR23%

China41%

Switzerland13%

USA10%

Germany6%

Denmark4%

Italy3%

France3%

Others20%


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1.3.3. Value Chain of the Pharmaceuticals IndustryFigure 17: Value Chain of Pharmaceuticals


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1.3.4. Key SegmentsThe pharmaceutical industry can be divided on the basis of form, therapeutic application and patent

protection. On the basis of form, the industry can be divided into bulk drugs and formulations, while

on the basis of application; it can be divided into various therapeutic segments. The pharmaceuticals

can also be segmented as generics and patent protected drugs.

Bulk Drugs and Formulations

Bulk drugs are the active pharmaceutical ingredients (APIs) with medicinal properties, which are used

to manufacture formulations. APIs cannot be administered directly to the patient, and other substances

called excipients are added to stabilise the mixture. This end product, which includes the API and the

excipient, is referred to as a formulation. Formulations can take the form of tablets, capsules, syrups,

ointments, creams, injectables, etc. Formulations are the pharmaceutical products administered to

patients.

Approximately 80% of domestic production consists of formulations, and more than 85% of those

formulations are sold in the domestic market, whereas at least 60% of bulk drug production is

exported.

India has the worlds third-largest API manufacturing industry. Currently, Indias drug industry

produces more than 400 different APIs and is among the worlds top 5 API producers accounting for

approximately 6.5% of the worlds API production. Italys Chemical Pharmaceutical Generic

Association projects that Indias share of the world API market will grow to 10.5% by 2010 as

patented blockbuster drugs lose their patent protection. The leading APIs were anti-infective, and

gastrointestinal, cardiovascular, and respiratory drugs. In terms of volume of sales, the gastrointestinal

and cardiac segments saw the highest rates of growth and accounted for the largest number of new

drug launches.

Therapeutic segments

On the basis of application, the key segments in the pharmaceutical industry are as under. However,

some of the therapeutic segments are overlapping because of multiple applications.

Anti-infectives: antibiotic (penicillin, sulphonamide, amino glycoside, tetracycline,macrolide, cephalosporin, quinolone, etc.), and vaccines.

Pain Management: anti-pyretic & analgesic, non steroidal anti- inflammatory drugs(NSAIDs), anti-rheumatics.

Cardiovascular (CVS) Drugs: cardiac therapy, anti-hypertensives and anti-hypotensives.


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Central Nervous System (CNS) Drugs: analgesics, anti psychotics, anti-epilepsy,tranquilisers and sedatives, and anti-Parkinsons disease.

Gastro-intestinals: antacids, anti-ulcerants, anti-spasmodics, and anti-diarrhoeals. Anti-parasitics: anti-protozoa, anti-malarials, anti-fungals, anti-helmintic, etc., Corticosteroids: topical corticosteroids, systemic corticosteroids. Genito-urinary: gynaecological preparations, sex hormones and stimulants. Dermatological preparations: anti-fungal preparations, anti-acne drugs, other

dermatological preparations

Respiratory Drugs: cough and cold preparations, anti-asthmatics, anti-histamines, rubs,and anti-tuberculosis.

Vitamins: plain vitamins and combinations, anti-oxidants. Mineral Supplements: calcium preparations, potassium preparations, anti-anaemic

preparations, Iron combinations, etc.

Anti-diabetics: insulin, oral anti-diabetics. Other Drugs: anti-obesity, digestive enzymes, blood plasma, anti-leukaemics, cytostatics

and immunosuppressive drugs etc

The growing urbanisation, growing disposable income and lifestyles that are becoming ever more

Western, this has resulted in increasingly high prevalence of Western lifestyle diseases. , the increase

in the elderly population compounded with increasingly Westernised lifestyles has meant

epidemiological trends in emerging market countries are growing closer to those seen in Western

markets, prompting a shift in therapeutic focus: sales of anti-infectives that traditionally dominate

emerging markets are slowing down and are being taken over by the CNS, cardiovascular,

gastrointestinal and metabolic agents. Sales of oncology drugs are still low compared to the major

pharmaceutical markets, however, they are growing rapidly.

The share of chronic and lifestyle segment is also increasing vis--vis the acute segment. The demand

for these drugs is growing at a faster rate, at 18%, than domestic demand for the acute drug segment

(12%). India has often been called the worlds diabetes capital and the rates of aliments such as

hypertension and high cholesterol are increasing annually. The lifestyle drug segment will fuel the

growth of Indias pharmaceutical industry and includes anti-diabetes, anti-ulcer, anti-depressants,

cardiovascular, hypertension drugs, Alzheimers disease, osteoarthritis, and cancer.


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Generics & Brand name drugs

These are copies of off-patent brand-name drugs that come in the same dosage, safety, strength, and

quality and for the same intended use. These drugs are then sold under their chemical names as both

over the counter and prescription forms. The generics segment can be further segmented into:

Plain vanilla generics: These are commodity generics that are off-patent in the regulatedmarkets. They offer little or no innovative value over the innovators product.

Branded generics: Generic drugs for which a drug manufacturing company has attached itsbrand name and may have invested in its marketing to differentiate it from other generic

brands

Brand name drugs are innovator drugs patented by pharmaceutical companies to prevent them from

being copied or reverse engineered by other companies.

Indian pharmaceutical industrys strength lies in generic in both domestic and international market.

Indian firms produce nearly 60,000 generic brands in 60 therapeutic categories. More than 90% of the

drugs in the domestic market are generics. Indian pharmaceutical exports are also dominated by

generics. The expertise that the Indian pharmaceutical sector developed in reverse engineering and

production of generics can be directly attributed to the effects of Governmental policy such as the

Patents Act, 1970 which played a major role in shaping the industry and bringing it to the present

enviable position. The Act of 1970 excluded product patents on pharmaceuticals, allowing themushrooming of a vigorous generics industry in India which could meet not only domestic demand

for drugs at lower prices but could also export cheaper drugs to other Third World countries.

Figure 18: Share of various therapeutic segments

Alimentary Tract &Metabolism

26%

Anti-infectives23%

Cardiovascular16%

Respiratory9%

CNS8%

Musculo-skeletalsystem6%

Women's Health5%

Dermatology4%

Cancer1%

Others2%


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1.3.5. Contract Research and Manufacturing and Other ServicesFacing lagging sales of patented drugs by MNCs in their home markets, declining R&D revenues, and

rising costs, many MNCs have turned to contract research and manufacturing services (CRAMS), co-

marketing alliances, outsourcing of research and clinical trials to reduce costs, increase development

capacity, and trim the time to market for new drugs.

CRAMS can be divided into 3 basic segments: the production of intermediates, active pharmaceutical

ingredients for new chemical entities, and the manufacture of generic drugs. India has emerged as one

of the worlds leading CRAMS providers for MNC innovator companies and now accounts for

between 6 and 7% of the global market. In 2005-06, the Indian CRAMS market was estimated around

Rs 2500 crore with contract manufacturing accounting for nearly 84% of the total. The remainder

consisted mainly of contract research. Both contract research and contract manufacturing grew by

more than 40% in 2005 and 2006.

Subcontracting in India has gradually moved up the value-added chain from intermediates and APIs

to new drug discovery, clinical trials, marketing, and sales. India has significant valid population to

participate in clinical trials and the country also has proven capabilities in medical skills, hospital beds

and IT capability. This offers an opportunity to capture the market share in global clinical R&D

market such as clinical trials, data management, testing, etc. By building the above key blocks in thedrug discovery value chain, India can reach the status of integrated provider in chemistry and biology

services. The share of revenues from services such as clinical trials etc. is likely to increase their share

of the total revenue of the pharmaceutical companies.

1.3.6. Market StructureIndias pharmaceutical industry is highly fragmented with more than 20,000 domestic production

units. Due to low barriers to entry and low capital requirements, the number of domesticpharmaceutical firms engaged in the formal and informal sectors expanded dramatically from 2,257 in

1970 to more than 20,000 in 2007-08. As many of these companies focus of producing similar generic

drugs, with possibly hundreds of companies producing the same drug, the industry is characterised by

fierce competition and high volumes, razor-thin profit margins, overcapacity, and declining prices.

The vast majority of Indias pharmaceutical firms are small by global standards with annual revenues

of less than Rs. 200 million (US$4 million). Approximately 80% of them are engaging in some type

of contract manufacturing or outsourcing. The largest 250 companies control nearly 70% of the

domestic market with the top 10 controlling approximately 40%.


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The domestic Indian pharmaceutical industry consists of both domestic companies and subsidiaries of

MNCs. In the 1970s, the vast majority of foreign pharmaceutical companies abandoned the Indian

market during the `process patent era due to inadequate product protection, government price

controls, growing domestic competition, and declining prices and profitability. Consequently, the

share of Indias market controlled by multinationals dropped to less than 19% by 2007.

Table 11: Key Players

Company Principal Products: bulk and generic drugs

Ranbaxy Labs Anti-infectives, cardiovascular, gastrointestinal, central nervous (diazepam,

midazolan), ophthalmic & ointments, urologicals, nutritionals, sex

hormones, analgesics, anti-asthma, cough & cold, vaccines.

Dr. Reddys Cardiovascular, gastrointestinal, anti-infectives, pain management

Cipla Antibiotics, anti-asthmatics, anti-AIDs and TB drugs, anabolic steroids,

analgesics-antipyretics, antacids, anti-arthritis, anti-inflammatory, anti-

cancer, antidepressant agents, anti-diabetic, anti-epileptic, anti-fungal, anti-

malarial.

Wockhardt Anti-infectives, pain management, nutraceuticals

Pfizer India Nutritionals, cough syrup, anti-arthritis, anti-infectives, cardiovascular

Sun Pharma Neuro-psychiatry, cardiovascular, gastrointestinal, diabetic,

gynaecological, anti-allergic, antidepressants, cholesterol reducers, anti-asthma, Parkinson, ADD, pain.

GSK Anti-infective, anti-inflammatory, analgesic, gastro-enterological, anti-

allergic, dermatological.

Lupin Tuberculosis medication, antibiotics, cardiovascular.

Cadila Cardiovascular, gastrointestinal, anti-inflammatory and analgesics,

antibiotics and anti-infectives, vaccines and immunomodulators, anti-

diabetics; vitamins.

Nicholas Piramal Analgesics-anti-inflammatory, antibiotics, antifungal, antihistamines,

antiseptics, cardiovascular, central nervous system, diabetic, dermatologic,

endocrinologic, gastro-enterological, vitamins, pulmonary-respiratory,

trauma-emergency, gastrointestinal, NSAIDs.

Aurobindo

Pharmaceuticals

Antibiotics, anti-retrovirals, cardiovascular, central nervous system, gastro-

enterological, anti-allergy.

Source: Company websites, IMaCS Analysis


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1.3.7. Policy and Regulatory Environment in IndiaPatents (Amendment) Act 2005

The Agreement on Trade-Related Aspects of Intellectual Property Rights (The TRIPS Agreement),

concluded during the Uruguay Round negotiations, has led to some changes in the development of

pharmaceutical industries. The TRIPS Agreement, which came into effect on January 1, 1995, sets out

the minimum standards of protection for all WTO Members. A key legal requirement of the TRIPS

Agreement is for all WTO Members to replace process patent protection with product patent

protection in all fields including pharmaceuticals.

The final set of changes to make Indias patent regime comply with the TRIPS Agreement in all

respects were first contained in the Indian Patent Ordinance of 2004, that was replaced by the Indian

Patent (Amendments) Act, 2005 (IPA, 2005).

Price Control Mechanism

National Pharmaceutical Price Control Authority is an organisation of the Government of India which

was established, inter alia, to fix or revise the prices of controlled bulk drugs and formulations and to

enforce prices and availability of the medicines in the country, under the Drugs (Prices Control)

Order, 1995.

While fixing the maximum sale price of the bulk drug, a post tax return of 14% on net worth or areturn of 22% of capital employed or in respect of a new plant an internal rate of return of 12% based

on long term marginal costing is considered depending upon the option exercised by the manufacturer

of the bulk drug. In case, the production is from basic stage, additional 4% return is considered on net

worth or capital employed.

Foreign Direct Investment (FDI)

As per the extant policy, FDI up to 74% is permitted through automatic route in the case of bulk

drugs, their intermediates and formulations (except those produced by the use of recombinant DNA

technology). 100% FDI in case of bulk drugs, their intermediates and formulations is considered by

the Government on a case by case basis. The drugs and pharmaceuticals sector has attracted FDI

worth US$ 1.43 billion from April 2000 to December 20.3

Other Government initiatives2

The Government has taken various policy initiatives for the pharmaceutical sector

3 Source: Indian Brand Equity Foundation - IBEF


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Government has offered tax-breaks to the pharmaceutical sector. Units are eligible forweighted tax deduction at 150 per cent for the R&D expenditure incurred.

Steps have been taken to streamline procedures covering development of new drug molecules,clinical research etc.

Government has launched two new schemesNew Millennium Indian TechnologyLeadership Initiative and the Drugs and Pharmaceuticals Research Programmespecially

targeted at drugs and pharmaceutical research.

1.3.8. Demand DriversIncreasing expenditure on health: Spending on health is the main driver of demand of

pharmaceuticals. Indias private final consumption expenditure (PFCE) on medical care and health

services increased 15.4% during FY2008 to Rs. 1,523 billion. However, in real terms, expenditure

increased 7.3% to Rs. 1,116 billion. In current prices, PFCE on medical care and health services

increased at a 5-year compound average growth rate (CAGR) of 13.4% during FY2004-08, and at a

10-year CAGR (1998-2008) of 17.7%.

The increasing government expenditure on health also contributes to the demand of pharmaceutical

products. The sector, by improving indicators such as life expectancy, reduction in disease burden and

child mortality, can drive the macroeconomic growth, which will result in greater income,

consumption and investment and enhance the quality of life in India. Estimates indicate that every Rs.

1,000 increase in per capita health expenditure results in a 1.3% increase in life expectancy.

Growth of managed care organisations: The continuing growth of managed care organisations

(MCOs) in the US has been a major factor in the competitive make-up of the healthcare marketplace

and the increased sales of Indian companies in the US market. Approximately 180 million people in

the US now participate in some version of managed care. The purchasing power of MCOs has been

increasing in recent years due to their growing numbers of enrolled patients. At the same time, those

organisations have been consolidating into fewer, even larger entities, thereby enhancing their

purchasing strength. The growth of MCOs has increased pressure on drug prices. Due to their

generally lower cost, generic medicines are often favoured over brand-name drugs

Strong Growth in Generic Sales: The top eight global marketsthe U.S., Germany, France, the

U.K., Canada, Italy, Spain and Japanaccount for 84% of total generics sales. The US, the worlds

largest generics market with 42% of global sales, has experienced a 2.7% sales decline in the twelve

months ending September 2008 while volume increased 5.4% during the same period. Generics

products now account for 63.7% of the total US pharmaceutical market volume. The US generics


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market is currently valued at US$33 billion, compared with US$34 billion in 2007, reflecting

declining prices and fewer blockbusters losing patent protection in 2008. However, generics sales rose

10.2% in Japan, 16.9% in France, 12.5% in Italy and 10.5% in Spain in the twelve months through

September 2008. The generics industry has increased its sales at a more rapid rate than the rest of the

pharmaceutical market. The extent and rate of generic erosion following patent expiry varies across

the 7 major markets, being most intense in the US, where it is estimated at 88% for standard oral

solids 2 years after generic entry. This compares with much lower erosion in Southern European

countries (for example, 19% in Spain) where generic use is more limited. In the US, 103 drugs are due

to go off patent during 200812, with total sales of US$62 billion in 2006.

Falling R&D Productivity and Decline in Output of New Drugs: In spite of continuously increasing

R&D investment, output of new drugs has declined and most pharmaceutical innovation has been

incremental. Because most R&D initiatives are unsuccessful in bringing a new product to market, the

total amount of investment per successful drug an indication of the productivity of R&D spending

in the pharmaceutical industry is very large. A decline in productivity has been evident since the

mid-1990s, as increased R&D investment has coincided with a decline in the number of new chemical

entities approved for marketing. As is true in other industries, most pharmaceutical innovation has

been incremental, rather than radical. Most such innovation has little or no added therapeutic value

over existing treatments. This has lead to shifting of focus to low cost countries for not only APIs and

formulations but also for contract research and clinical trials.

1.3.9. Key Success factorsMoving up the value chain: With the introduction of product patents, many Indian companies plan to

move up the product value chain and increasing exports to regulated markets, such as the US and

Europe. Leveraging their comparative cost advantages, these firms plan to target plain vanilla generics

sales to regulated markets in the near-term and to develop more difficult-to-manufacture generics

(injectables, etc), lower-risk new drugs, and follow-on biologics in the medium term.

Forming alliances with international majors: The products of ten large firms account for much of

the global pharmaceutical market. In 2007, the top ten pharmaceutical firms accounted for nearly half

the value of global sales. The market for pharmaceutical products is increasingly a global one, with

trade and policy practices making market segmentation and corresponding price differentiation by

country difficult. Facing lagging sales of patented drugs by MNCs in their home markets, declining

R&D revenues, and rising costs, many MNCs have turned to contract research and manufacturing

services (CRAMS), co-marketing alliances, outsourcing of research and clinical trials to reduce costs,

increase development capacity, and trim the time to market for new drugs. These strategies permit

MNCs to focus on their core profit making activities (competencies), such as drug discoveries and


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marketing, rather than on manufacturing. India has emerged as the principal destination for global

pharmaceutical companies across the pharmaceutical value chain. Strategic options for alliances

include providing contract manufacturing for MNCs, providing clinical outsourcing for MNCs,

supplying APIs to MNCs, R&D collaboration, partnering with MNCs for their sales channels, etc.

Regulatory compliance & managing intellectual property: The Indian pharmaceutical industry

accounts for the second largest number of Abbreviated New Drug Applications (ANDAs), is the

worlds leader in Drug Master Files (DMFs) applications with the U.S. Food and Drug

Administration, and has the largest number of FDA-approved manufacturing plants (75) outside of the

US. Many of Indias leading Indian pharmaceutical companies have also been certified by regulatory

authorities in Australia, South Africa, and the EU. The Indian companies have to ensure that there is

no slip up in regulatory compliances.

1.3.10.Key Risk FactorsTechnology risk: R&D plays a very important role in the pharmaceutical industry. Although the

industry engages in many forms of innovation, in general the most significant is the discovery and

development of new chemical and biopharmaceutical entities that become new therapies. New drug

development takes around 8-10 years from discovery to approval, and is prohibitively expensive, with

recent studies estimating the cost at around US$900-1,000 million.

Increasing competition in international markets: Emergence of countries such as China can be a

major threat to the Indian Pharmaceutical industry. The number of Drug Master Files (DMF) filed by

China in the US has grown significantly over the years.

Spurious Drugs: The spurious drugs not only are a risk to human life but also erode the brand of the

industry as a whole.

1.3.11.Drivers of CompetitivenessIndias competitive advantage lies in its lower production and research costs, its large pool of low cost

technical and scientifically trained personnel, and the large number of US Food and Drug

Administration (FDA) certified plants. Other important factors include the popularity of outsourcing

non-critical business functions to India by MNCs, the reintroduction of product patents for

pharmaceuticals, the growing importance of R&D related to drug discovery by Indian drug

companies, and the growing demand for generic drugs in developed markets. It is estimated that


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manufacturing costs in India are between 30 to 40% lower than those in the US and Western Europe

and labour costs are one-seventh of that in the US.

Figure 19: Drivers of competitiveness of the Pharmaceutical industry

Drivers ofCompetitiveness

SkilledManpower

Lowerproduction andresearch costs

Stableregulatory

enviornment inthe vountry

Large numberof US Foodand Drug

Administration(FDA) certified

plants


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2.Human Resource and Skill Requirements in the Chemicals andPharmaceuticals Sector

2.1.Current Employment in the Chemicals and Pharmaceuticals Sector2.1.1. Current Employment in Chemicals

Chemical industries are broadly classified under the National Industrial Classification (NIC) codes

241 and 242. The employment under these categories is given below. The number of workers engaged

under both the NIC classifications is close to 5.4 lakh, while the total persons engaged is around 7.9

lakh. NIC code 232 refers to manufacture of refined petroleum products

Table 12: Current employment in Chemical Industries

NIC Code 241:

Manufacture of basic

chemicals

NIC Code 242 :

Manufacture of other

chemical products

NIC Code 232:

Manufacture of

refined petroleum

products

Number of

Workers

136,568 402,297 41,189

Total Persons

Engaged

201,453 596,764 54,546

Source: Annual Survey of Industry

Thus the overall employment in this sector is about 8.5 lakh persons.

Gujarat, Maharashtra and Tamil Nadu account for around 60% of the total employment in the

chemical industry.


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Figure 20: State-wise share in employment in the Chemicals Segment

Source: Annual Survey of Industries

2.1.2. Current Employment in PharmaceuticalsAs regards the Pharmaceuticals segment, direct employment has increased from 6.9 lakh people in

2006 to 8 lakh people in 20084.

Goa, Mumbai, Pune and Hyderabad have been the preferred destinations for formulation players in

the past. However, Baddi in Himachal Pradesh and Pantnagar and Haridwar in the state of

Uttarakhand are the upcoming formulation clusters, attracting formulation manufacturers from across

the country due to fiscal incentives offered by the Government. Traditional bulk drug clusters are

located primarily in Gujarat, Maharashtra, Andhra Pradesh, Tamil Nadu, Goa, Pondicherry and

Karnataka. Visakhapatnam in Andhra Pradesh is the upcoming bulk drug cluster that has generated

significant interest in the APIs players. The R&D clusters have followed a similar development

pattern. Apart from the National Capital Region (NCR), other R&D clusters have been limited to the

established pharmaceutical regions in the country.

2.1.3. Functional Distribution of Human ResourcesDuring our interaction with the industry as part of our Primary Research, we analysed the proportion

of workforce at various functional levels across the Chemicals and Pharmaceuticals Sector. The inputs

received from the industry, supplemented by analysis by IMaCS, are as presented in the following

tables.

Table 13: Functional distribution of human resources in the Chemicals Segment

4 IMaCS estimates

Gujarat22%

Tamil Nadu18%

Maharashtra18%

AndhraPradesh

8%

UttarPradesh

5%

Karnataka4%

Others25%


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Function Distribution

Production (including Maintenance) 60-65%

Procurement 3-5%

Research 2%

Sales and Marketing 20-25%

Support functions (HR, Finance, etc.) 10%

Source: Primary Research and IMaCS analysis

Table 14: Functional distribution of human resources in the Pharmaceuticals Segment


Production & Quality Control 50%

Research/Lab/Testing 20%

Sales, Marketing, Medical assistance 5-10%

Purchase, Logistics, Supply Chain 5-10%

Support functions (HR, Finance, etc.) 10-12%


2.1.4. Distribution of Human Resources by Education LevelsAs a part of our Primary Research, we also analysed the education-wise composition of personnel

employed in the Chemicals and Pharmaceuticals Sector. The inputs received from the industry,

supplemented by analysis by IMaCS, are as presented in the following tables.


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Table 15: Educational qualifications of personnel employed in the Chemicals and Pharmaceuticals

Segment5


Ph. D / MTech / MSc etc. 5%-8%

Graduate Engineers 15%-25%

Diploma Engineers 10%

ITI and other vocationalcourses

15-20%

Graduates(BA/BSc/BCom/others)

15-25%

12th

standard or below 20-25%


5 The educational distribution of personnel will change based on the level of automation more automatedsetups will have a lower need for ITIs, BSc (Chemistry), etc.


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2.2.Skill Requirements and Skill Gaps in the Chemicals Segment2.2.1. Profile of people employed

The following figures illustrate the profile of people employed in the Chemicals Segment acrossvarious categories.

Figure 21: Profile of people employed in the Chemicals Segment


2.2.2. Skill requirements and skill gapsThe following table presents the skill requirements and gaps across various functions and

hierarchical/reporting levels in the Chemicals Segment.

Table 16: Skill requirements and skill gaps in the Chemicals Segment

Function /

RoleLevel Skills required Skill gaps

Production Manager Ability to manage safety and regulatoryaspects of the chemical products

produced by the company

Ability to ensure compliance to chemicalregulatory requirements and guidelines

Ability to coordinate with other functionssuch as research, procurement, etc. for

existing products and ensure production

Inadequateunderstanding of basic

chemical processes that

will complement

maintenance and repair

activities

Inadequate exposure tocurrent tools,

ITIs, BSc Chemistry,

Minimally educated / 8th/ 10th / 12th pass / fail

Diploma / Graduateengineers / MSc

Chemistry with 4-8 yearsindustry experience

Engineers / MBAs with10-12 years industry

experienceManagers

Supervisors

Operators /Helpers

Operators /Helpers

Supervisors

Operators /Helpers


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Function /


and quality targets as per the production

planAbility to aid the initial set-up and

implementation of design mix for new

products

Ability to coordinate with third partymanufacturers as well as with internal

departments

Ability to break down the productionplan further based on the production

target and ensure achievement of the

targeted production

Ability to identify opportunities forprocess improvement and ensure the

implementation of the same

Ability to ensure quality standardsAwareness of emerging areas such as

water soluble fertilisers

Ability to oversee development, reviewand improvement of standard operating

procedures

Ability to oversee all aspects ofoperations, including ensuring raw

material ordering, production scheduling,

catalyst replacements, etc.

Ability to lead multi-disciplinary teamsAbility to achieve maintenance and

reliability goals and expectations

Ability to work with the research team tomodify or produce new products

technology, and

processesInadequate specific

petrochemical

knowledge

Inadequate knowledge ofsafety procedures

Limited availability dueto lack of petrochemical

specific courses

Inadequate knowledge ofterminal and container

operations

Supervisor Ability to adjust batch processingconditions based on process

measurements

Inadequate practicalunderstanding of

chemical processes


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Function /


Ability to render appropriate feedback onthe quality of input materials

Ability to track and record processinformation and production data

Ability to ensure cleaning of all processequipment at required intervals

Ability to perform in-process and finalproduct QA tests of finished product as

required

Ability to stringently comply with safetymeasures with respect to operations,

equipments, environment, etc. and ensure

that the safety measures are stringently

followed by workmen

Adequate knowledge of chemistry,

chemical hazards and safety measures

Ability to perform routine calibrations ofequipment such as process pH meters

Ability to monitor operators,communicate effectively with them,

assign specific jobs and ensure that the

assigned jobs are carried out

Ability to undertake documentation ofprocess activities

Awareness of safety procedures andenvironmental norms

Knowledge on Distributed ControlSystems (DCS) and Process Level

Control (PLC)

Lack of knowledge ofpneumatic valves, rotarypumps etc.

Lack of orientation ofshop-floor culture

Lack of specificpetrochemical

knowledge

Training and assistingoperators on the job

Monitoring Truckturnover rate

Poor peoplemanagement and

planning skills

Operator /

Helpers

Basic understanding of compliance tosafety issues while handling chemicals,

especially hazardous chemicals

Inadequate knowledge ofconversion factors

Inadequate ability to


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Function /


Ability to produce a variety of chemicalsand chemical intermediates by followingstandard operating procedures

Loading and unloading of bulk chemicaltrucks, chemicals, catalysts, etc.

Ability to use reactors, pumps, stills,centrifuges, dryers, valves, mixers,

pumps, control equipment and other

manufacturing equipment

Ability to read, understand and followbatch sheets

Ability to enter production data intocomputer systems such as SAP

Working knowledge of chemicalreactors, chemical transfer systems,

filtration systems, instrumentation used

in chemical processing, etc.

Ability to understand mathematicalcalculations and use percentages,

fractions, etc.

Ability to undertake grinding or millingoperations (if required) for rock-based

sources

Ability to undertake chemical mixingKnowledge of conversion factors

required when adding ingredients

Ability to handle instrumentsAbility to use computer simulation

software

Ability to extract production and salesdata from SAP and analyse it

Ability to maintain the equipments andmachineries in a continuous process plant

render feedback on the

quality of inputsreceived for processing

Inadequate safetyorientation and

compliance to safety

Inadequate sensitivity tothe environment


chemical processes

Inadequate exposure totools, technology, and

processes in chemical

plants

Inadequate computerknowledge required at

this level

Inadequate ability tohandle multiple types of

instruments

Inadequate ability towork with ERP software

such as SAP

Inadequate knowledge ofdistributed control

systems


chemical processes that

will aid in

complementing

maintenance and repair


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Function /


Understanding of various operations suchas mixing operations (asbestos,fertilisers), briquetting, retorting, melting

and casting, purification operations such

as leaching, distillation, milling, layering,

mixing of phosphoric acid, sulphuric

acid, ammonia in industries such as

fertilisers, mixing of chemicals for

granulation, cutting, sheeting operations,

detachment and heating (asbestos),

calcinations, etc.

Ability to undertake bagging, packaging,etc.

Ability to lift heavy weightsKnowledge on basics of distributed

control systems

activities

Sales &

Marketing

Senior

sales

representa

-tive

Ability to determine customerrequirements and expectations with

regards to products being manufactured

by the company

Detailed technical knowledge of theproduct(s)

Ability to recommend specific chemicalproducts and solutions based on

customer needs

Ability to coordinate with productionpersonnel and ensure that customer

orders are processed per customers

specific requirements

Ability to generate new and repeat salesby providing product and technical

information to clients in a timely manner

Ability to monitor competition by

Inadequate commercialsense for e.g.

inadequate ability to

understand tax

implications and thus

implications on cost to

company

Inadequate selling andnegotiation skills


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Function /


gathering information on strategy of

competitors w.r.t. pricing, new products,etc.

Ability to sell to a variety of clientsbased on the product(s) manufactured by

the company

Ability to assist the research team in theintroduction of new products

Ability to understand commercialimplications and the cost-to-company of

inefficient sales

Ability to manage sales through multiplechannels

Extension services to farmers in decidingtype of fertilisers, crop and other

technical support

Ability to articulate technical aspects ofagriculture

Account

manager /

Junior

sales

representa

-tive

Ability to conduct regular sales calls,make presentations about the companys

products, correctly assess needs of

customers during the sales call and be

able to close the deal

Ability to develop & maintainrelationships with existing and potential

customers

Ability to undertake product trials at thecustomers end

Ability to ensure that the companysproducts are set well into the customers

processes and then handover the process

to the customer

Ability to resolve customer complaints,

Inadequate knowledge ofchemical processes

Inadequate orientationtowards attaining

detailed product

knowledge

Inadequate ability toexecute the end-to-end

selling process

Inadequate ability tonegotiate prices and a

tendency to compromise

on price based on

customer or potential

customer feedback


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Function /


by investigating problems and

developing solutionsAbility to negotiate prices with existing

and potential customers and secure the

best price for the company

Ability to service existing accounts bytracking demand

Inadequate ability toconvey functional

benefit of

chemical/fertliser to

customer/farmer.



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2.3.Skill Requirements and Skill Gaps in the Pharmaceuticals Segment2.3.1. Profile of people employed

The following figures illustrate the profile of people employed in the Pharmaceuticals Segment acrossvarious categories.

Figure 22: Profile of people employed in the Pharmaceuticals Segment


2.3.2. Skill requirements and skill gapsThe following table presents the skill requirements and gaps across various functions and

hierarchical/reporting levels in the Pharmaceuticals Segment.

ITI/12th Standard

B Pharm, BSc

MSc, MPharm,

Personnel with about 5years experience

PhD, MSc, MPharm,

Personnel with 8 - 15years experience

Scientists

Managers

Supervisors

Workmen Workmen

Supervisors

Workmen


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Table 17: Skill requirements and skill gaps in the Pharmaceuticals Segment

Function /


Production &

Quality

Control

Managers Ability to ensure that the factory formanufacture of drugs is aptly

located and follows procedures so

as to avoid risk of contamination

from external environmental

Ability to ensure that themanufacturing environment is

maintained at the required levels of

temperature, humidity and

cleanliness

Ability to ensure that the layout anddesign of the equipment minimises

the risk of errors and permits

effective cleaning and maintenance

Ability to identify avenues for costreduction and optimum resource

utilisation by implementing best

practices in production-safety,

pollution control and quality

Ability to develop a manufacturingprocess economically adaptable to

mass production

Ability to ensure continuingupgradation of skills and continuous

education for employees

Ability to lay emphasis on costeffectiveness of production

Adequate orientation towardsIntellectual Property Management

(IPM) and ensuring compliance to

regulatory requirements

Ability to undertake continuing

Inadequate orientationtowards quality

management

Inadequateunderstanding of

intellectual property

management


regulatory aspects

Inadequate peoplemanagement and

leadership skills


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Function /


improvements in manufacturing

processesAbility to ensure efficient

manufacturing and timely delivery

of finished products

Ability to ensure adherence toregulatory and internal process

compliance such as WHO-GMP,

Schedule-M and SOPs across all

levels

Supervisors Ability to ensure orderly and logicalplacement of equipment, materials

and movement of personnel so as to

avoid the risk of mix-up between

different categories of drugs or with

raw materials, intermediates and in-

process material, and avoid the

possibilities of contamination and

cross-contamination

Ability to ensure that disposal ofwaste is in conformity with various

requirements, such as, those of the

Environment Pollution Control

Board, the Bio-Medical Waste

Rules, 1996, etc.

Ability to ensure proper labelling ofraw materials, materials under

process and finished products

Ability to practice safety measureswhen working with infectious

cultures and poisonous chemicals

and ensure that workmen follow

instruction with respect to. the same

Inadequateunderstanding of quality

management practices

Inadequate practicalexposure to high quality

lab settings

Inadequatecommunication skills for

communicating with

operators


intellectual property

management

Inadequate taskorientation

Inadequate leadershipskills


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Function /


Ability to conduct in-processinspection e.g. inspectingampoules for discoloration and

foreign particles, inspecting tablets

for hardness, chipping and weight,

etc.

Ability to liaison with stores toensure adequate raw material

Technical knowledge aboutproducts (chemical compounds and

their properties) and processes

(temperature requirements, etc)

Knowledge of good qualitypractices and the ability to ensure

compliance to SOPs and quality

standards

Ability to assist R&D personnel inprocess design

Ability to undertake batch planningand issuance of batch sheets

Ability to undertake mentoring andtraining of operators

Workmen Ability to operate processingequipment and other sophisticated

equipment

Ability to adhere to health, clothingand sanitation e.g. avoiding direct

contact with raw materials,

intermediate or finished, and

unpacked products

Ability to undertake materialhandling and drive industrial trucks

or tractors to move materials around

Inadequate knowledge ofchemical compounds

and laboratory testing

processes

Inadequate practicalorientation and exposure

to machines

High degree ofhandholding required

Inadequate selfmotivation to enhance


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Funct

chemical pharma

Documents