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Maharashtra –Pharmaceutical SectorNovember 2014

www.midcindia.org

Knowledge Partner

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Preface

§ The Maharashtra Pharmaceutical Sector Profile has been developed by Ernst & Young India LLP, the Knowledge Partner to Maharashtra IndustrialDevelopment Corporation to provide hand holding assistance to investors.

§ The intention is to provide executives a quick overview to the Pharmaceutical Sector in the State.

§ The complex decision-making process involved in undertaking foreign operations requires an intimate knowledge of a country’s and a State’s commercialclimate as well as recognition of the fact that this climate is continuously evolving. Companies doing business in India, or planning to do so, would be well-advised to obtain current and detailed information from experienced professionals. The information presented in this book has been validated w.e.fSeptember 2014.

Knowledge Partner

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7.58.6

10.412.0

13.7

2008-09 2009-10 2010-11 2011-12 2012-13

Maharashtra's GSDP in INR Lakh Crore

Macroeconomic Profile- Economy

§ The manufacturing sector contributes a significant 18.51 per cent to the state’s GSDP. Amongst the 10 states with the highest GSDP (GrossState Domestic Product) in India, Maharashtra is one of the leading states in terms of contribution of manufacturing share to the GSDP.

§ Maharashtra has a Per Capita Income (PCI) of INR 1,07,670. The state has the highest per capita income amongst the 10 states with the highestGSDP in India.

8.43%

LEADER

Maharashtra has thehighest GSDP inIndia – INR 13.7 LakhCrore (USD 228.3Billion)

CAGR of GSDP atconstant prices overthe last 5 years

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5.206.00 6.24

7.85

10.05

2007-08 2008-09 2009-10 2010-11 2011-12

Maharashtra's Industrial Output in INR Lakh Crore

Macroeconomic Profile- Industry

§ The state recorded the highest Industrial Value Addition in the nation. The Gross Value Added by all industries in the state amounted to INR 1,79,222crore (USD 29.87 billion) in the year 2011-12, which is 59 per cent greater than the value addition of its closest follower.

§ Maharashtra has the second highest number of factories and has one of the lowest number of industrial disputes in the country.

17.41%

LEADER

Highest IndustrialOutput in the nation– INR 10.05 LakhCrore (USD 167.5Billion)

Maharashtra’s sharein India’s totalIndustrial Output

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Macroeconomic Profile- Investments

§ Maharashtra has attracted INR 3,16,082 crore of FDI over the period 2000- 2014, which is almost one-third of the nation’s total FDI inflows receivedover the same period.

§ New investment projects announced in 2013-14 which would be set in Maharashtra are proposed to bring in INR 27,795 crore of investment in the state.

§ In 2013-14, the state contributed 10.86 per cent of the total projects completed in India in terms of investment value. With a total of INR 28,406 crore ofinvestment projects completed in the state, Maharashtra is one of the leading states in the country in terms of project completion (by investment value).

One -Third

LEADERHighest FDI Inflowsin the nation

Maharashtra’s sharein India’s FDI Inflowsover the period 2000- 2014

27,669

44,664 47,359

2010-11 2011-12 2012-13

Maharashtra FDI Inflows in INR Crore

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ROAD AND RAILWAYS§ More than 99 per cent of the villages are well connected with all

weather roads in the state§ 9.3 percent of total railway network in the country§ 2 Major Railway zones§ Dry Ports, Inland Container Depots, Truck terminals and Railway

sidings for easy freight movement

AIR AND WATER PORTS§ 4 International and 7 Domestic Airports§ 6 MIDC airstrips§ 2 Major ports§ 22.45 per cent of the total cargo traffic of the major ports in India is

handled by the Jawaharlal Nehru Port (JNPT) and Mumbai Port(MBPT)

§ 53 Minor ports

LAND§ Maharashtra is the second largest state in India, with an area of 30

Million Hectares (307,713 sq. km.)§ MIDC has one of the largest land banks in India, with ‘industrial land’

spanning over 84,000 hectares

ENERGY§ Gross installed capacity of power plants (excluding Central Sector) is

23,726.7 MW. The state has the highest Gross installed capacity(Utilities) at 10.62 per cent of the nation’s total installed capacity.

§ Gross Generation of power plants (excluding central sector) is at77,169.9 million KwH

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Infrastructure

Infrastructure

National Highway

Railway

MIDC Airstrips

Key Locations

International Airport

Proposed GasPipeline Network

Major Ports

To Goa

To Madhya PradeshTo Gujarat To Madhya Pradesh

Nanded

Solapur

Sangali

Nasik

Dhule

Wardha

Jalna

Sindhudurg

To Andhra Pradesh

ToChhattisgarh

To Karnataka

To Goa

Amravati

Osmanabad

LaturBeed

Gadchiroli

Gondia

Gangapur

·

Sinnar

Rajgurunagar

Dighi

Shirdi

Karad

Shirpur

To Andhra Pradesh

Ozhar

BaramatiPhaltan

Akola

JalgaonNagpur

Bhandara

YavatmalChandrapur

Kolhapur

Ratnagiri

Satara

Aurangabad

Ahmednagar

Thane

Mumbai

Pune

Raigarh

Juhu

Domestic Airports

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Pharmaceutical Sector in India

§ The Indian pharmaceuticals market grew at a CAGR of 17.0 per cent in 2012 from only USD 6 billion in 2005 and is expected to grow at a CAGR of 12.1 percent to reach USD 45 billion in 2020.

§ By 2020, India is expected to be within the top 3 pharmaceutical market by incremental growth and sixth largest market globally in absolute size.

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0

10

20

30

40

50

2005 2012 2020F

Revenue of Indian pharmaceutical industry(USD billion)

Revenue of Indian pharmaceutical industry(USD billion)

Pharmaceutical Sectorin Maharashtra

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§ Maharashtra accounts for approximately 18.4 per cent of the country’s pharmaceutical output by value.§ Major pharmaceutical units, such as Pfizer, Johnson and Johnson, GlaxoSmithKline, Abbott and Sun Pharmaceutical Industries, have presence in the

state.§ Major opportunities have emerged in the pharmaceutical sector, primarily, in the areas of contract research, contract manufacturing and clinical

trials.§ The state has a well-developed laboratory, research and development infrastructure, and a strong resource pool.§ Maharashtra has a strong R&D base with major centre as Bioresearch Centre, Bioinformatics Centre, Serum Institute etc.§ Maharashtra has 3,139 Pharmaceutical manufacturing units.§ The state has 445 government, government aided and unaided pharmaceutical institutes with a total intake capacity of 25318 students.

Category Major Clusters

Traditional Bulk Drug Clusters Mumbai, Tarapur, Aurangabad,Pune

Traditional FormulationsCluster Mumbai and Pune

Company Investment Employment

Nipro India Corporation Pvt. Ltd. 680.72 1033

Klockner Pentaplast India Pvt. Ltd. 300 200

Varroc Eng. Pvt. Ltd. 152 559

Grand Total 1132.72 1792

Pharmaceutical HubsIn Maharashtra

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Kurkumbh

Add. Patalganga

Lote Parshuram

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Key Growth DriversMagneticMaharashtra


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IndustrialInfrastructure Policy Support

Rising ExportOpportunities

Doing BusinessSupport

PharmaceuticalSector in

Maharashtra

Strong TalentPool

SocialInfrastructure

Access toForeign Markets

Strong DomesticDemand

StrategicLocation

Human Capital

SKILLED WORKFORCE§ The state has a literacy rate of 82.34% with a large base of skilled and

industrial labour§ The state has a total of 2298 technical institutions with an intake capacity of

4,49,121. It also houses 781 ITI (Industrial Training institutes) with an intakecapacity of 1,17,747.

§ The Govt. is promoting "Centers of Excellence", which will cover all aspectsof cutting edge research and development in emerging areas of life sciencesand technology

§ The state also has one of the Indian Institutes of Technology (IITs) at Powaiin Mumbai, part of the country's renowned network of engineering andtechnology institutions. IIT Mumbai has 13 departments and various centersfor R&D

§ Top universities in the state like the University of Mumbai, University ofPune, Nagpur University, Bhartiya Vidyapeeth etc. provide courses forgraduation/post graduation/ Phds in pharmacy

§ The state has 46 government and government aided institutes with a intakecapacity for 2474 students

§ With almost 13% of the total institutes, the pharmaceutical institutes have atotal enrolment of 51826

§ The state has 465 institutions (Diploma, Degree, PG) for Pharmaceuticalsciences with an enrolment of 51826

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State’s literacy rate isat 82.34% with a large

base of skilled andindustrial labor

Presence of "Centersof Excellence",

covering all aspects ofcutting edge researchand development inemerging areas of

technology

Presence of IndianInstitutes of

Technology (IITs) inMumbai

Policy SupportMagneticMaharashtra


TechnologyUpgradation Subsidy

Interest Subsidy Stamp DutyExemption

VAT + CSTAbatement

Electricity DutyExemption

Cleaner ProductionIncentives

Water EnergySubsidy

Water conservationIncentives

Royalty Exemption

Fixed Capital Investment Employment Location

DETERMINING FACTORS

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Maharashtra Industrial Policy 2013-18FISCAL INCENTIVE BASKET

§ Greenfield investments in the pharmaceutical sector will be permitted up to 100% FDI under automatic route. Brownfield projects will be permitted up to100% FDI with FIPB approval

§ Budget 2010–2011 reduced the customs duty from 10% to 5% on imports of select life saving drugs, conjugate vaccine and Micafungin sodium for injection

§ Patent and proprietary medicines included under chapter 30 of the Customs Tariff Act, 1975 which are imported for retail sale are exempted from specialadditional duty

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Key Players

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Industrial PresenceMagneticMaharashtra


Hospital, Public Health

Patented Products

Consumer Healthcare

Biologics, Vaccines

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Growth StoriesMagneticMaharashtra


§ Wockhardt, headquartered in Mumbai, is a major player in theintegrated healthcare segment.

§ Its market presence covers formulations, biopharmaceuticals,nutrition products, vaccines and active pharmaceutical ingredients(APIs).

§ In 2012-13, the company had earned revenues of USD 1.03 billion.

§ It has set up a global-scale biopharmaceuticals manufacturing park,the Wockhardt Biotech Park, in Aurangabad. This state-of-the-artcomplex comprises six dedicated manufacturing facilities, and isdesigned according to USFDA and EMEA standards.

§ The company’s manufacturing plants in Waluj, Shendra andChikalthana are situated in MIDC industrial areas.

§ GlaxoSmithkline Pharmaceuticals is one of the oldest players in theIndian pharmaceuticals industry, established in 1924.

§ In 2012, the company earned revenues of INR 3.33 ThousandCrores (USD 555.4 million)

§ The company produces medicines that treats major disease areassuch as asthma, virus control, infections, mental health, diabetes anddigestive conditions.

§ The company is also a leader in the important areas of vaccines andis developing new treatments for cancer.

§ The company is headquartered at Mumbai, with manufacturingfacilities in Nashik and Thane

§ GSK India's R&D centres at Nashik have been granted recognitionby the Department of Scientific and Industrial Research,Government of India.

Wockhardt GlaxoSmithkline

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Contact Us

Shri. Bhushan Gagrani (IAS)Chief Executive Officer - MIDCTel No : 022-26870800, 22616547

Fax No : 022-26871587Email : [email protected]

Dr. P. Anbalagan (IAS)Joint Chief Executive Officer - MIDC

Tel : 022-26871462Fax : 022-26870026

Email: [email protected]

Shri. Yuvraj PomanDy. Chief Executive Officer - II

Tel : 022-26870142 ; Fax : 022-26871604Email: [email protected]

Head OfficeMaharashtra Industrial Development Corporation

Udyog Sarathi, Mahakali Caves Road,Andheri(E), Mumbai-400 093

DisclaimerMaharashtra Industrial Development Corporation (“MIDC”) has engaged Ernst & Young LLP. (“EY”) to prepare this document and the same has been prepared by EY in consultation with MIDC. This document is for information purposes only. While due care has been takenduring the compilation of this document to ensure that the information is accurate to the best of EY knowledge and belief, the content is not to be construed in any manner whatsoever as a substitute for professional advice.EY does not assume any liability or responsibility to any person for the outcome of decisions taken by such person as a result of any reliance placed on this presentation. EY shall not be liable for any direct or indirect damages that may arise due to any act or omission on thepart of the user due to any reliance placed or guidance taken from any portion of this presentation.© 2014All rights reserved. All copyright in this presentation and related works is solely and exclusively owned by MIDC and Ernst & Young. The same may not be reproduced, wholly or in part in any material form (including photocopying or storing it in any medium by electronicmeans and whether or not transiently or incidentally to some other use of this presentation), modified or in any manner communicated to any third party except with the written approval of MIDC.

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