With the pharmaceutical sector projected to witness a 12% compound annual growth rate (CAGR) between 2015 and 2020, the Punjab government also wants to ride the tide by projecting Mohali as a pharma hub to attract key players. But it faces the biggest challenge from the pharmaceutical industry in Baddi-Barotiwala-Nalagarh industrial belt of the neighbouring Himachal Pradesh, where it enjoys tax benefits under special category status.
Though major pharma players —Sun Pharmaceuticals Industries, DSM, Ind-Swift, Nector Lifesciences and Sourav Chemicals — and some formulation units have established their base in Mohali, much needs to be done.
Together, industries in Baddi have an annual turnover of over Rs 30,000 crore, with the largest share from the pharmaceutical industry. Over 600 pharmaceutical industries dot the Baddi-Barotiwala-Nalagarh belt, which falls in Himachal Praesh’s Solan district, and export medicines to over 100 countries.
After Punjab government’s approval, the Centre had in 2013 given a nod to setting up a special economic zone (SEZ) by Ranbaxy Laboratories on 80 acres in Sector 76 industrial estate in Mohali for export-oriented pharma industries and research and development facilities. But, in in the 2014-2015 financial year, India’s largest drug manufacturer, Sun Pharmaceutical Industries, acquired Ranbaxy Laboratories and the Mohali plant also went in its kitty. For now, Sun Pharma SEZ is moving slow. While setting up units in the special zone is expected to cost Rs 900 crore, one unit is already operational.
Also, the state government feels Mohali, Derabassi and nearby areas have wherewithal in terms of ample land, basic infrastructure, entrepreneurial pool and talent pool for setting up of new formulation and API units. The state industries department projects that already existing pharma players in Punjab can set up a robust ‘key starting material’ (KSM) manufacturing facilities for major KSMs like 7-aminocephalosporanic acid (7-ACA).
Key pharma sector players have reservations over Mohali developing as pharma hub anytime soon, saying it requires strong political will.
Dr Gopal Munjal, MD and CEO of pharmaceutical company Ind-Swift, said Baddi had an advantage over Mohali or other industrial areas of Punjab because of a host of tax benefits for industrial units there. “As promised by the central government, if this benefit is extended to Himachal beyond 2020 and till 2027, this would be a big challenge for Punjab. Otherwise it will be a level-playing field after 2020,” says Munjal. For 10 years now, Ind-Swift has a research and development plant on three acres in Mohali. The company has a plant in Baddi too, and clocked a turnover of Rs 278 crore in 2016-17. Of this, Rs 118 crore was in exports, mainly to the European market.