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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.
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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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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
Source: Ministry of Chemicals & Fertilisers, IMaCS Analysis
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
Source: Ministry of Chemicals & Fertilisers, IMaCS Analysis
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
Source: Ministry of Chemicals & Fertilisers, IMaCS Analysis
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
Source: Ministry of Chemicals & Fertilisers, IMaCS Analysis
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
Source: Ministry of Chemicals & Fertilisers, IMaCS Analysis
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
Source: Ministry of Chemicals & Fertilisers, IMaCS Analysis
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
Source: Ministry of Chemicals & Fertilisers, IMaCS Analysis
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
Source: Ministry of Chemicals & Fertilisers, IMaCS Analysis
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
Source: Ministry of Chemicals & Fertilisers, IMaCS Analysis
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
Source: Ministry of Chemicals & Fertilisers, IMaCS Analysis
Figure 10: Share of different regions in Fertiliser production
Source: Ministry of Chemicals & Fertilisers, IMaCS Analysis
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
Source: IMaCS Industry Comment-The Indian Pharmaceuticals Industry, March 2009
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
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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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Source: IMaCS Industry Comment-The Indian Pharmaceuticals Industry, March 2009
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
Function Distribution
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%
Source: Primary Research and IMaCS analysis
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
Function Distribution
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%
Source: Primary Research and IMaCS analysis
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
Source: Primary Research and IMaCS analysis
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 /
RoleLevel Skills required Skill gaps
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 /
RoleLevel Skills required Skill gaps
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 /
RoleLevel Skills required Skill gaps
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
Inadequateunderstanding of basic
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
Inadequateunderstanding of basic
chemical processes that
will aid in
complementing
maintenance and repair
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Function /
RoleLevel Skills required Skill gaps
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 /
RoleLevel Skills required Skill gaps
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 /
RoleLevel Skills required Skill gaps
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.
Source: Primary Research and IMaCS analysis
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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
Source: Primary Research and IMaCS analysis
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 /
RoleLevel Skills required Skill gaps
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
Inadequateunderstanding of
regulatory aspects
Inadequate peoplemanagement and
leadership skills
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Function /
RoleLevel Skills required Skill gaps
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
Inadequateunderstanding of
intellectual property
management
Inadequate taskorientation
Inadequate leadershipskills
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Function /
RoleLevel Skills required Skill gaps
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