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Brand of Brothers
How to approach a superlative market
Established in 1995, and already turning over $125 million, Mankind Pharma (New Delhi) is an interesting case study on the Indian market. The company has been posting some of the industry's highest growth rates—12 of its brands have made it to top market position. Their current bestseller, an anti-impotency drug called "Manforce," is one of India's blockbusters, and the company has in its pipeline a number of products tagged for future success. The secret? Mankind's field marketing force: a group of 2800 people. The company's pricing policy is also responsible. Mankind first targeted rural areas at a time when most were looking at urban sectors for sales and adjusted the prices of products to the purchasing powers of the potential clients. R.C. Juneja, the company's managing director, says, "Mankind is the only company that has actively brought the costs of medicine down. We are striving to make our treatments affordable, and we have been successful to a large extent. We are into most therapeutic classes, except oncological, and our sales force works at grassroots level." Yet, the price-lowering policy has found its limits, and at a time when operating expenses are increasing, Juneja agrees that "prices cannot go down anymore.... Mankind will have to increase its prices by 2–3 % this year. However, what is today more essential than sales prices is the product mix." The company is also willing to penetrate nonregulated markets such as the CIS (Commonwealth of Independent States) countries or Latin America and sees the best opportunities for growth in chronic and lifestyle segments.
But understanding the Indian market's realities is Mankind's true competitive advantage. "We launch 10 products every year, and we have managed systematically to have a number one for the last five years," said Juneja. "The biggest challenge will be the next five years. We welcome tie-ups, as the Indian market has got the potential to be the first market in the world soon. We would then be seeking win–win situations where foreign players come to use our facilities, share their know-how, use our field force, and provide us with access to high-value markets."
Establishing a Name
A look at leading machinery makers
Despite the fact that India's pharmaceutical industry ranks fourth in global production and has the second largest active pharmaceutical ingredient (API) base in the world, the country's pharmaceutical machinery makers have gone relatively unnoticed. This is likely to change as upcoming companies are becoming more bold in their intentions, actions, and talents.
Take for instance, Chamunda Pharma Machinery Pvt. Ltd. (Ahmedabad), one of India's engineering powerhouses. Presenting itself as a complete solution provider for solid-dosage forms, the company has been growing rapidly and is today on the edge of a major business step. The recipe: an aggressive push on the global markets. "People from the US and Western Europe used to put Chinese and Indian companies on the same level," says Shahil Shah, one of the company's executive directors. "Yet here, the real picture has changed. The Indian intellect is high, and we have been busy applying it to the API sector, the machinery-making segment, research and development of new molecules, etc. The local pharmaceutical industry is changing and the Indian pharmaceutical machinery sector is changing alongside. Expectations are higher, better production performances are required, and the level of services has grown to global standards. This gives us the confidence and the will to succeed beyond our home market."
Chamunda seems to have a head start compared with its competitors—6000 of its machines are running around the world. The key reason is service: "To retain customers is the most important job, and servicing is crucial," says Shah. "There are a few manufacturers here that believe in this and the future is positive for our side of the industry."
Emulation is also playing a role in the development of the machinery sector, and not only between local companies. According to Shah, with acquisition opportunities in Thailand, Korea, and elsewhere opening every year, the expected growth rate seems rather encouraging.