Agri-technologies that has high market potential and RoI will be presented in this session which will provide a platform for entrepreneurs, SMEs and agri-companies to understand more about it and an opportunity to start own venture through commercialization of the same.
Animal health in India: SME business opportunities
ANIMAL HEALTH IN INDIASME BUSINESS OPPORTUNITIES NIABI 2012 K V BALASUBRAMANIAM MANAGING DIRECTOR INDIAN IMMUNOLOGICALS LTD
ANIMAL HEALTH IN INDIA SME BUSINESS OPPORTUNITIES ABOUT INDIAN IMMUNOLOGICALS LTDProducer of animal and human vaccines, health & nutrition products# 1 in animal vaccines, # 3 in animal health in India# 4 in human vaccines, # 7 biopharma company# 12 biotech companyTop 3 world producer of Foot & Mouth disease vaccine.Top 3 world producer of human and animal rabies vaccines.Major supplier of UIP vaccines – r Hepatitis B, Measles, DPT, TT etc.,Mission: Biotechnology in healthcare made affordable & accessible.Service Offerings – Raksha Vet Centres, Indiagen, Abhay Clinics.Sales Rs 284 Cr ($ 63 mio.) FY 2010-11, Employees 1300.
ANIMAL HEALTH IN INDIA SME BUSINESS OPPORTUNITIES PRESENTATION OBJECTIVEAbout : India - Animal Health Business - SME Business – Specific Opportunities - Challenges – Success FactorsNot About : Dairy or Poultry Value Chain Business
ANIMAL HEALTH IN INDIASME BUSINESS OPPORTUNITIES 1. ANIMAL HEALTH MARKET - PERSPECTIVE 2. FUTURE PROSPECTS 3. SPECIFIC SME OPPORTUNITIES 4. CHALLENGES 5. SUCCESS FACTORS
1. ANIMAL HEALTH MARKET - PERSPECTIVE PERSPECTIVE - ANIMAL POPULATION Cattle & Buffaloes 296 mio (18% of world) Sheep & Goats 120 mio (12 % of world) Poultry - Layers 169 mio - Broilers 1800 mio ( 10% of world) Dogs - Street 20 mio - Pets 0.4 mio (8 % of world)
1. ANIMAL HEALTH MARKET - PERSPECTIVEItem Unit per India Developed World person Countries Average per yearMeat Kg 5.1 82.1 41.2Milk Kg 65.2 207.7 82.1Eggs Kg 1.8 13.0 9.0Source: The State of Food & Agriculture 2009, FAO
2. FUTURE PROSPECTS AH MARKET – FUTURE PROSPECTSNational Dairy Plan to focus on increased milk productivity -> Growth in animal breeding, nutrition and health businessLarge outlays in 12th five year plan for disease control -> Large business opportunities for vaccines for cattle & sheepGrowing integration of poultry businesses -> Higher health and hygeine outlaysHigher emphasis on productive livestock with high yielding animals -> Better range and volume of feed and nutritionGrowing ownership of pets as lifestyle statements -> Opportunities for pet care and pet health
3. SPECIFIC SME OPPORTUNITIES ANIMAL FEED, NUTRITION & HEALTH MARKET SIZECompounded Animal Feed : Rs 8000 CrHealth –Vaccines & Medicines : Rs 1700 CrNutrition Products : Rs 700 Cr
3. SPECIFIC SME OPPORTUNITIES 1. COMPOUNDED ANIMAL FEEDFeed requirements of cattle : 60 % home made, 28 % grazing, 12 % cattle feed0.5 kgs cattle feed for every 1 lit milk produced.= Market potential of 60 mio MTCurrent market only 6 mio MT i.e 10 % of potential.Poultry Feed market addl. 2 mio MTScope for value added products : specific feeds for calves, buffaloes, pregnant animals etc.,Medium size cattle feed plants 50 -100 TPD serving 100 kms radius Investment cost Rs 5-6 Cr.Turnover Rs 15-30 Cr Technology – Medium, Available with Machinery Suppliers
3. SPECIFIC SME OPPORTUNITIES 2. HEALTH PRODUCTSIndian Mkt Rs 1700 Cr i.e $ 340 mio, Growth 10% p.aWorld Mkt $ 18 bioIndia 2 % of world AH market. Potential to grow.Rank 10 (USA 24%,Europe 20%,China 7% Brazil 6% Japan 5%)Main Product Groups: Vaccines 31 % Rs 530 Cr Antibiotics 30 % Rs 500 Cr Dewormers 17 % Rs 290 Cr Infusions 5 % Rs 90 Cr NSAIDS 4 % Rs 70 Cr Parasiticicides 4 % Rs 70 Cr Others 9 % Rs 150 Cr Total Rs 1700 Cr
3. SPECIFIC SME OPPORTUNITIES 2. HEALTH PRODUCTSManufacture/Marketing of Formulations Market Rs 1200 Cr Investment cost Rs 5-15 Cr. Sales Turnover Rs 15-30 Cr p.a Technology – Medium ( Tabletting, Orals) – High ( Injectables) Available with several ConsultantsContract Manufacture of Formulations Investment cost Rs 5-10 Cr. Sales Turnover Rs 10-20 Cr p.a Technology – Medium - High
3. SPECIFIC SME OPPORTUNITIES 3. ANIMAL VACCINESManufacture of Animal Vaccines Cattle, Poultry, Canine & Sheep Vaccines Market Rs 530 Cr Investment cost Rs 20-30 Cr. Sales Turnover Rs 20-30 Cr p.a Technology – Medium for Bacterial Vaccines High for Viral Vaccines, Recombinant Vaccines Available with IVRI, NRDC, Consultants Better – Tech transfer
3. SPECIFIC SME OPPORTUNITIES 3. VACCINE TECHNOLOGY TRANSFER – IMPORTANT ASPECTSTechnicalScale : Large difference between lab, pilot and commercial scale.Raw Material : R&D uses pure material, commercially unaffordable.Process Parameters : Better control in Lab scale vs commercial scaleStrain Used : Sufficient data required.Clinical trials : Adequate data on Immunogenicity, Safety & EfficacyCommercialIntellectual Property Rights, Warranty, Training, Demo of Comml. Batches, Jurisdiction, Training etc.,
3. SPECIFIC SME OPPORTUNITIES 4. NUTRITION PRODUCTS MARKETMarket Size Rs 700 Cr Growth 19 % p.aMain Product Groups Vitamin & Mineral Premixes Rs 150 Cr Calcium Supplements Rs 140 Cr Mineral Mixtures Rs 100 Cr By pass Fat Rs 20 Cr Others Rs 190 CrManufacture of Mineral Mixture/Vitamin premixes/ Supplements Investment cost Rs 3 -5 Cr. Turnover Rs 10 - 15 Cr p.a Technology – Low. Available with Machinery Suppliers.
4. CHALLENGES MARKET CHALLENGESSmall farmer market makes marketing a long haulDispersed market puts pressure on distribution costs, esp. vaccinesTrade exerts pressure on margins due to the dispersed marketAffordabilty issues leads to high price sensitivityUnregulated competition TECHNOLOGY CHALLENGESNeed to develop products for the Indian requirementsLittle R&D on AH products, dependence on human product extensionsNew IPR regime imposes additional diligence demands and research costs
4. CHALLENGES MANUFACTURING CHALLENGESLower volumes compared to pharma result in higher cost of manufactureContract manufacturing as solution has quality imperativesSmall supporting manufacturers also have quality issues REGULATORY CHALLENGESAbsence of proper regulatory framework for new drug, esp GM productsEvolving regulatory environment creates uncertainty in new product introductionLicensure a State subject, except vaccines, creates inconsistencies
5. SUCCESS FACTORSClear assessment of need-gap in the market.Build sustainable business model.Create niche position before expanding.Differentiated product offerings.Appropriate technology which is cost effective.Manufacturing economies of scale.Adequate investment in sales force with good productivity norms.Cost effective distribution.Customer relationshipPerformance metrics for manufacturing, supply chain & marketing.Good management of cash cycle and working capital.Regular performance reviews and corrections.Patience, Perspiration, Persistence