In the 1970s and 1980s, a large number of small firms were set up in Ahmedabad. As exports started growing, more companies started setting shop, while the early movers started to become medium and large firms. According to a report by KPMG in 2008 on Gujarat’s Pharma sector, an estimated 75-100 bulk drug producers and 1,000 manufacturing units in Ahmedabad. These manufacturing units are mostly in formulations and other areas including excipients, disposables, homeopathic, ISM and miscellaneous products which come under the purview of FDCA. Around 50 manufacturing units make medical disposables. The rest are in formulations including ayurvedic products.

Of these companies, ten are large, 100 are medium and the rest are all small units. The major players in and around Ahmedabad include Zydus Cadila, Sun Pharma, Intas, Torrent, Alembic, Dishman, etc.

Among the major products manufactured in this cluster are: Pharmaceuticals—both allopathic and ayurvedic formulations, in different dosage forms (including tablets, liquid, capsules, externals and injectables); and Medical disposable products like IV sets.

Challenges

Environmental issues: The major challenges are the regulations which pose a big challenge for any business and market expansion in the industry, price control of drugs and tax and duties imbalance. North Indian states such as Uttaranchal have deployed a set of fiscal incentives towards promoting investments in the state. This has directly resulted in the shift of the manufacturing base from Gujarat to these regions.

These environmental challenges have caused an unfavorable business resulting in higher pressure on the margins and profitability of the firms. This has also shifted the focus of the firms towards compliance rather than trying to improve business processes and investing in IT.

Business process challenges: While the business environment challenges are in the realm of external influences to the cluster, the firms in the pharmaceutical cluster are also facing a number of business process challenges. One common challenge in front of all the companies is the lack of integration of finance with other functions like sales, production and material management.

Project Vikas Initiatives

Project Vikas has planned a number of initiatives to tackle these challenges. Under the project, sensitization programs are being conducted to help enterprises understand how the challenges before them can be well addressed through use of ICTs. At various other clusters, Project Vikas has successfully demonstrated the power of creating a consortia of companies that enables them to explore new markets and be able to deliver to client expectations far more easily.

Training programs for the local independent software vendors are being conducted. Workshops for the CxOs and Directors of enterprises on ICT training are also being conducted. Workforce training programs are also planned.

To enable business development of the enterprises, Project Vikas has set up a Web portal to enable these businesses to connect with other business, and help them find customers as well.