S. Harachand09.01.10
At around $1 billion, the nutraceutical business in India is a seemingly small affair. It looks minuscule and doesn't make a dent in the world's staggering $117 billion nutraceutical market.
But India's nutraceutical market excels the global business in one way: It is the pace at which it is emerging. The market for nutraceuticals in India is reportedly growing more than double the speed of global market at the rate of 18% for the last two to three years.
Even though 18% is the apparent figure, the latent market for nutraceuticals in India could be two to four times the existing market, with nearly 148 million potential customers, according to a recent report, "Nutraceuticals Critical Supplements for Building a Healthy India" by the industry research firm Ernst & Young and the Federation of Indian Chambers of Commerce and Industry. The report points out that increasing affluence of the expanding working population and growing awareness are the prime drivers of this double-digit growth rate.
The surging market, clearly, attracts a lot of players from within and without. Particularly, multi-national corporations (MNCs) are turning more aggressive as they try to take the lead in capturing the nutraceuticals market in India. Abbott's recently aborted deal to buy Indian firm Wockhardt's top-selling nutritional products along with their manufacturing facilities is an example.
MNCs Get Aggressive
Other U.S. firms, including Pfizer and Bristol Myers-Squibb, have also taken a deep interest in the rapidly expanding nutraceuticals segment in India, sources say. Even as certain global majors are in the process of reworking their offerings to maximize their advantage in the nutraceutical market, companies like GlaxoSmithkline Consumer Healthcare, which has a presence in India, are transforming their product lines. According to sources, GSK CH wants to fortify its offerings with maximum number - as much as 95% - of nutritional products in the upcoming years.
The domestic players are equally aggressive. Though there aren't very many nutraceutical companies in India in terms of size and number, all the existing firms are obviously hard at work. Manufacturers like Divi's Lab, Dishman, Shasun Chemicals and Piramal Healthcare have either started adding nutraceuticals or are in the process of augmenting their product portfolios with nutritional lines.
"The fundamentals of manufacturing nutraceutical ingredients are pretty much same as pharmaceuticals," said M. Muralidharan Nair, partner Ernst & Yung who co-authored the report on nutraceuticals. And the opportunity for third party manufacturing is much more profound with nutraceuticals, as they are not as stringently regulated the way pharma products currently are under.
According to Mr. Nair, Indian companies won't have any hassle on developing nutra ingredientsand can definitely leverage their well-established pharmaceutical manufacturing credentials in nutraceuticals as well.
Raw Materials, Manpower Rich In Supply
There are few pure-play Indian nutraceuticals CMOs at the moment. But since most of the existing CMOs are good at ingredient science, global nutraceutical majors faced with upstream concerns can look to India in terms of raw materials and cost-effective manufacturing technologies.
Raw materials for making nutraceutical products, especially phyto or plant-based resources, are in high supply in India, according to Shanshank Bhalkar, vice president, Raptakos Brett & Co. Ltd., which makes a wide range of nutraceuticals and phytopharmaceuticals.
"In fact there are very few big nutraceutical CMOs in India. But potential is quite high as there is abundant supply of raw materials and human resources," Mr. Bhalkar said. A pioneer in India's nutra segment, Raptakos has been approached by several MNCs for contract manufacturing even though this Mumbai-based, mid-sized player is yet to step into CMO operations.
While traditional nutra players like Raptakos are weighing on the opportunities, a few pharma-based firms are taking the plunge to capitalize on cost-effective manufacturing location.
Sohm, India, which recently commissioned a new facility to handle its nutraceutical product production in the western Indian state of Ahmedabad, is a case in point. A Buena Park, CA-based generic supplier that uses India as manufacturing hub, Sohm is relatively a recent entrant to the country. Sohm has added 4,420 sq. ft. of manufacturing space dedicated to nutritional products following a purchase order for protein-based nutraceuticals.
"The new nutritional manufacturing facility and laboratory staff are complementary to our pharma manufacturing facility and will allow for rapid turnaround and competitive pricing as our purchase orders continue to increase," stated Shailesh Shah, vice president for Corporate Strategy at Sohm, Inc.
The huge possibilities, however, do not obviate certain nagging issues, like lack of a proper regulatory framework to govern nutraceutical products. This lack of regulations couldact a deterrent to large foreign players wishing to enter the Indian nutra market, as pointed out by the E&Y report.
S. Harachand is a pharmaceutical journalist based in Mumbai. He can be reached at harachand@gmail.com.
But India's nutraceutical market excels the global business in one way: It is the pace at which it is emerging. The market for nutraceuticals in India is reportedly growing more than double the speed of global market at the rate of 18% for the last two to three years.
Even though 18% is the apparent figure, the latent market for nutraceuticals in India could be two to four times the existing market, with nearly 148 million potential customers, according to a recent report, "Nutraceuticals Critical Supplements for Building a Healthy India" by the industry research firm Ernst & Young and the Federation of Indian Chambers of Commerce and Industry. The report points out that increasing affluence of the expanding working population and growing awareness are the prime drivers of this double-digit growth rate.
The surging market, clearly, attracts a lot of players from within and without. Particularly, multi-national corporations (MNCs) are turning more aggressive as they try to take the lead in capturing the nutraceuticals market in India. Abbott's recently aborted deal to buy Indian firm Wockhardt's top-selling nutritional products along with their manufacturing facilities is an example.
MNCs Get Aggressive
Other U.S. firms, including Pfizer and Bristol Myers-Squibb, have also taken a deep interest in the rapidly expanding nutraceuticals segment in India, sources say. Even as certain global majors are in the process of reworking their offerings to maximize their advantage in the nutraceutical market, companies like GlaxoSmithkline Consumer Healthcare, which has a presence in India, are transforming their product lines. According to sources, GSK CH wants to fortify its offerings with maximum number - as much as 95% - of nutritional products in the upcoming years.
The domestic players are equally aggressive. Though there aren't very many nutraceutical companies in India in terms of size and number, all the existing firms are obviously hard at work. Manufacturers like Divi's Lab, Dishman, Shasun Chemicals and Piramal Healthcare have either started adding nutraceuticals or are in the process of augmenting their product portfolios with nutritional lines.
"The fundamentals of manufacturing nutraceutical ingredients are pretty much same as pharmaceuticals," said M. Muralidharan Nair, partner Ernst & Yung who co-authored the report on nutraceuticals. And the opportunity for third party manufacturing is much more profound with nutraceuticals, as they are not as stringently regulated the way pharma products currently are under.
According to Mr. Nair, Indian companies won't have any hassle on developing nutra ingredientsand can definitely leverage their well-established pharmaceutical manufacturing credentials in nutraceuticals as well.
Raw Materials, Manpower Rich In Supply
There are few pure-play Indian nutraceuticals CMOs at the moment. But since most of the existing CMOs are good at ingredient science, global nutraceutical majors faced with upstream concerns can look to India in terms of raw materials and cost-effective manufacturing technologies.
Raw materials for making nutraceutical products, especially phyto or plant-based resources, are in high supply in India, according to Shanshank Bhalkar, vice president, Raptakos Brett & Co. Ltd., which makes a wide range of nutraceuticals and phytopharmaceuticals.
"In fact there are very few big nutraceutical CMOs in India. But potential is quite high as there is abundant supply of raw materials and human resources," Mr. Bhalkar said. A pioneer in India's nutra segment, Raptakos has been approached by several MNCs for contract manufacturing even though this Mumbai-based, mid-sized player is yet to step into CMO operations.
While traditional nutra players like Raptakos are weighing on the opportunities, a few pharma-based firms are taking the plunge to capitalize on cost-effective manufacturing location.
Sohm, India, which recently commissioned a new facility to handle its nutraceutical product production in the western Indian state of Ahmedabad, is a case in point. A Buena Park, CA-based generic supplier that uses India as manufacturing hub, Sohm is relatively a recent entrant to the country. Sohm has added 4,420 sq. ft. of manufacturing space dedicated to nutritional products following a purchase order for protein-based nutraceuticals.
"The new nutritional manufacturing facility and laboratory staff are complementary to our pharma manufacturing facility and will allow for rapid turnaround and competitive pricing as our purchase orders continue to increase," stated Shailesh Shah, vice president for Corporate Strategy at Sohm, Inc.
The huge possibilities, however, do not obviate certain nagging issues, like lack of a proper regulatory framework to govern nutraceutical products. This lack of regulations couldact a deterrent to large foreign players wishing to enter the Indian nutra market, as pointed out by the E&Y report.
S. Harachand is a pharmaceutical journalist based in Mumbai. He can be reached at harachand@gmail.com.