In the changing industrial scenario, many entrepreneurs looked at biotechnology as new area of investment. This supported the biosuppliers.

Amid stiff competition between multinationals and local suppliers, the MNCs withstood the competition with the

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As per the latest BioSpectrum-ABLE survey on Indian biotechnology industry, of the total biotech market size of Rs 2,305 crore, the biosupplier segment accounted for 21 percent of the market share in 2002-03. The domestic market size was Rs 415 crore, while the exports business was a marginal Rs 60 crore. The reason: most of the key suppliers to biotech companies are multinationals having their subsidiaries located in India. Almost all the leading vendors globally have an office or relation with the distributors in India. A quick look at the top 10 biosuppliers shows that eightMillipore, Agilent, Becton Dickinson, BioRad, Alfa Laval, Sartorius, Thermo Electron and Amershamare multinationals. The question then: are they exclusive biotech suppliers only? Clearly, no supplier is targeting only the biotechnology companies and research organizations. They have been present in the country for several years now. Most of them strengthened their presence in the mid-Nineties. They started addressing the needs of different industries like pharmaceuticals, brewery, food processing, distillery, agriculture, effluent handling, edible oil processing, marine, diesel, hospitals, validation and documentation areas, software, automation, beverages, and diagnostic segment. They have now added the emerging biotech sector in their portfolio. This has obviously changed the fortunes of the suppliers. There has been a lot of investment in the sector in the past two-three years and in the next few years the sector is all set to attract close to Rs 2,000 crore investment. Take the case of Alfa Laval India. A 100 percent subsidiary of the Swedish company, which has been operating since 1937, manufactures and supplies components and systems in separation, heat transfer, flow technology to different industries. It got the first order from Biocon India, a biotechnology company, which started operations in 1978. It got orders from companies like Cipla, Novatis, Dr Reddys Lab, Wockhardt to name a few, who have also diversified to add the biotech component to their portfolio. Though it supplies its products to other industries, it sees a major opportunity in this new upcoming biotechnology industry. It has set up a separate division, life sciences, to meet the requirements of this niche industry. The same is true for Sartorius India which is into designing, manufacturing, implementation, commissioning and participates in the initial process of clients. Although Cherian Philip, the former managing director and had some experience in the field of selling filters, he started the operations in India in 1991 to target pharma and biotech companies. Sartorius now plans to enter new sectors like food and beverage market in a big way. If we see Agilent Technologies, a BioSpectrum top 20 company, besides delivering equipment to bioscience companies, it offers products to pharmaceutical, environmental, petrochemcial and other industries. Similarly Becton Dickinson India has been in the field of manufacture and sale of broad range of medical supplies, devices, lab equipment and diagnostic products used by clinical labs, healthcare institutions and life science researchers. Even Amersham Biosciences, a key player in the supplier segment and a global provider of biotech systems offers its products and services to companies in pharma, biotechnology and agrochemical and research institutions. Most of the biosuppliers have established their manufacturing units in India and have country-wide sales and support presence. Besides, they have now redefined their positioningfrom being product companies to solutions-driven organizations. They not only offer off the shelf products, but also provide customized solutions. With the customers today looking at building world class manufacturing plants or R&D centres, which comply to global standards, biosuppliers today feel the key differentiator in the market place is in being able to be a partner to the clients overall business strategy. Since the

biotech industry portfolio is very diverse and customers ask for a solution, the biosuppliers are supplementing the customers requirement importing a few equipment from their parent organizations. Some are importing the technology by entering into joint ventures. This trend is visible in sectors like biofuel. Companies like Alfa Laval and Praj Industries have tied up with multinationals and bought the technology to establish the ethanol blended petrol plants in India. The biotech/lifesciences sector today accounts for the largest share of revenues for the suppliers. It is as close as 4045 percent of the total share of the total sales revenues for some companies, which supply products to all other industries too. Reason: biotechnology is not like other industries. It needs a clean environment to work. Other wise, it will have a negative impact on the end products. Hence the biosuppliers have taken special care to see that the biotech companies would get quality products in turn should come out with quality products.
Quality redefines the suppliers positioning

With so many products and so many vendors, suppliers are learning to differentiate themselves. This is on account of quality awareness gaining ground with clients. "In the past, there was a very low demand for high quality products in separation, purification, and membrane technology from the biotech and lifesciences sector. But this is changing," Sudhir Kant, president, Millipore. True, the companies, which concentrated on quality, education and training today are beginning to reap the benefits. Take for example, Millipore. It has been introducing nearly 30 products every year and its sales revenues in the last three years has been on the rise. It grew from Rs 32 crore in 2000-01 to Rs 40 crore in 200203. This tells the storythat of more products as well as more suppliers. The products supplied to the biotechnology industry include bioreactors, biotech equipment, bioprocess plants, autoclaves, analytical instruments, separation plants, analyzers, centrifuges cleanroom technology, cleaning equipment, effluent treatment plants, filters, purified water, scientific doors, heat exchangers, etc. The list of supplier too is huge. There are over 15 companies which must be doing sales in excess of Rs 15 crore. And about 90 percent of the biosuppliers are based at Mumbai-Pune belt, Bangalore, Hyderabad and in and around New Delhi. Bangalore has big names like Wipro Health, Millipore, Sartorius, Waters India. Most of the MNCs have set up production units and marketing networks in India. This is helping them to offer quality and latest product/equipment to the biotech customers in India. They have been taking the services of the parent company for their R&D work and also to upgrade the existing products and to launch the newer products in the Indian market. Their business lines are structured. Take for example Millipore, it has four divisionsbiopharma, lab water, life science, and industrial. It has a full-fledged R&D Lab, which is an offshore center working for internal consumption and embedded software lab. It is also in the process of setting up a process development lab to allow customers to do their own process development for pilot studies. The MNCs have established a strong network in local market and routed their products through distributors or some times they only handle the clients. Even Indian biosuppliers are providing quality products to the clients at competitive price. The only difficultly they find is investing in their R&D activities to launch newer products. Dr K Ramanathan, chief executive officer, Systronics, which manufactures fraction collector, HPLC, clinical analyzer, water analyzer, UV spectrophotometers etc. said, "The prices of the equipment supplied by Systronics are on par with the internationals standards and are also cheaper by over 50 percent. The distributors too believe in value addition. Smart Labtech, supplier of lab analytical, biotechnological and weighting equipment, material science testing equipment suitable for the applications by supplying time tested and quality products from the internationally manufacturers like Labomed, USA. Spectris (Philips), Sartorius, Cryo Scientific, Spectrum Technologies. It supplies micro/semi micro analytical balances density determination kits, spectrometers, soil moisture testers, portable water test kits etc. It is also providing purified water that acts as a reagent in a variety of molecular biological experiments. It helps in experiments like polymerize chain reaction, single nucleotide polymerization analysts which are necessary in biotechnology sector. Sanjay Biotech Solutions too supplies products to Indian clients, manufactured by different MNCs like Agilent Technologies, Sartorius Germany, Logan Instruments, Brookfield Engineering Labs and The Tintometer Ltd.

Furthermore the focus is moving beyond the traditional equipment with quality being the focus in building clean environment for conducting research and development. For instance, to meet the needs of clean environ Shakti-Met Door Ltd, an ISO 9001:2000 company that manufactures steel flush doors, has developed scientific doors. Such scientific doors provided with international quality ironmongery and specialty seals to meet the standards so as to seek US FDA approvals. Many major pharma companies like Aventis, Astra Zeneca, Cipla, Dr Reddys Lab, Ranbaxy, GlaxoSmithKline, Unichem, Pfizer, Orchid chemicals and pharmaceuticals are its clients. The work environ in the industry needs to be sterile and clean i.e., free of dust and pollutants. Any contamination will affect the result of the research and quality of the products and services and ultimately the business of the company. Hepa Filtrations Systems offers solutions to address the contamination and pollution problem by supplying range of products including air shower, reverse flow, laminar air work station, filters, clean room accessories, ventilation systems, clean room furnitures, steri clean high static double skin air handling unit, biohazard protection unit. It has developed stainless steel wall paneling and false ceiling with coverings, which are claimed to be economical, have a long life, and are maintenance free. Another company, Technocrats is providing custom build systems as per the global standards. Nuziveedu Seeds, Zen Biotech, Lupin, Suven Pharma and many other biotech companies are its clients. Integrated Cleanroom Technologies Ltd with a vision to design, manufacture, supply and install clean rooms is one more company in this segment. It manufactures prefabricated modular clean rooms and accessories.With so many products and so many vendors, suppliers are learning to differentiate themselves. This is on account of quality awareness gaining ground with clients. Accurex Biomedicals, an ISO 9000 company and a key player in clinical biochemistry reagents with products equal to or better than those of competitors including multinationals, is gearing to assume a leadership position in India and Asia-Pacific region. Earlier it was focusing on manufacturing in-vitro diagnostics products. Founded in 1972, Span Diagnostics Ltd, a BioSpectrumTtop 20 company, is Indias largest and most comprehensive manufacturer of diagnostic products. SPANiD is one of the divisions of Span has been engaged in marketing a wide range of clinical diagnostics instruments. SPANiD has tie ups with the leading diagnostics companies of the world to market their instruments in India and provide service back up. It offers wide range of instruments to clinical laboratories as well as to the hospitals. The product line comprises of biochemistry analyzers, hematology analyzers, ELISA processors, blood gas/electrolyte analyzer etc. Chemito Instruments Pvt Ltd, a group company of Toshniwal Instruments (India) with its manufacturing expertise and instrumentation knowledge, manufactures bioreactors/fermenters and cell culture systems to offer microbiologists tailor-made bio-solutions for the best possible growth and biosynthesis for industrially important products. Chennai-based Scigenics (India) is a known name in the industry. It is believed to have the largest installed base of fermenters in the country with over 125 installations. In 2002, it launched a cell culture fermenter. Even turnkey solutions are coming to the fore. M+W Zander (S) Pte Ltd provides consultancy and total turnkey solutions to business fields, facility engineering and facility management. It is actively involved in building ultra modern production facilities from concept to commissioning. Specialized in design, consultation, construction and validation of contamination control and containment facilities and has executed projects for Shantha Biotechics, Pfizer, Novatis, and CSIR Labs.

"The Indian engineering capabilities are projected under a good banner. Several international engineering companies will not hesitate to move in and manufacture out of India. Implementation of the IPR will lend confidence to them. The global market for custom built engineering goods is approximately $10-15 billion with the US and Europe taking the major share. Even a small percentage of this would mean big for us. Therefore opportunities are plenty, but cannot be captured unless investments into quality are made," Anil P Kariath, chief operating officer, Sartorius India,

All that glitters is not gold

Although the number of biosuppliers (manufacturers) is very small, the sector too has hurdles such as time factor, no organizational support, branding, inter-state taxing like octroi, ToT, duty structure and to some extent competition in the segment.

Some MNCs do import technologies/equipment from their parent company, but they say they dont find much problem in doing so. "The duty level in some of our imports keeps the cost high. In some cases the duty goes up to about 50 percent. For Indian market, this factor effects in a bigger way. For a flourishing Indian market with worldclass products, we need to check up these aspects," said Dhiren Wagle, country manager, BioRad India that manufactures and distributes thousands of products and incorporates a wide range of technologies including electrophoresis, imaging, immunoassay, and chromatography. Bimal Desai, product manger, Thermo Electron LLS India Ltd added "Inter state taxing like Octroi are coming in the way of offering our products at competitive price at different locations. Even duty structure is making us to pay hefty tax of over 35-50 percent. For example for our product ELISA reader, which is used in hospitals, diagnostic labs and research organizations for conducting HIV/Hepatitis tests has not been included in the life saving equipment. The government has given duty relaxation to import life saving equipment. This classification of equipment is coming in our way." While the issues on the duty and taxes confront the industry, it is coming under increasing pressure to reduce the prices. Competition is only adding to the woes. According Bhavna Shah, director, Pharmalab, manufacturer of different types of sterilizers and filters and other machinery for pharmaceutical industry, "Competition has increased as more companies are coming up. This is mainly because key people in the organization are leaving and setting up their own units and bringing down the prices of the equipment. The companies that have invested a lot on developing new products will definitely find this as a problem." The gainer definitely is the customer. Added Wagle, "Competition will certainly help us as well as our customers. We expect to see stiff competition in industry. But that would help us in maintaining our leadership by providing best quality products to the clients." Expressing concern over the challenges of the industry, Dr G Ramakrishnan, head, Life Sciences and Chemical Analysis division, Agilent Technologies India said, "As of now, government is showing good concern to boost the industry. But the paper work in completing any transaction is taking a long time. There are some initiatives from the government side, but this matter needs an immediate attention and a proper permanent solution." Another important issue for the industry has been on creating awareness. Vivek Verma, business development manager, Cambrex Chemicals, which is into marketing of cell biology and microbiology products, said, "The major hurdle of Cambrex is convincing the customers that its product Pyrogent is a kit. Even though we import the products from our parent company, the import duties and procedures are not an impediment till date. As our product is heavily licensed by the USFDA, there is little scope for additional competition. There is a possibility of consolidation at the global level." Further, since the sector does not have a platform to collectively address the issues, things only get complicated and expensive. Said SV Raja, director, Industrial Equip Wash, "As of now only seminars and exhibitions provide us a platform to discuss different issues related to our segment." "At this stage it would be better if we have a forum for the suppliers community. Its effectiveness is also equally important," felt Dr Ramakrishnan.

"Com petitio n will certain ly help us as well as our customers. We expect to see stiff competition in industry. But that would help us in maintaining our leadership by providing best

The global versus Indian product bias too is catching up. Said GG Pillai, managing director, Pooja Labs Equipment, an Indian company that manufactures scientific instruments and equipment, "We have problems as some of the customers are not interested in Indian products, though we provide the best and latest products of international standards at competitive price." This is only the mindset of the clients and the brand image the MNCs have developed in India over the years. The growth of biopharma sector both in research and manufacturing sectors depends on the support it gets from suppliers. It is no more product quality and support alone. It goes beyond that. At present supply of customized process equipment has become a critical factor as the industry demands faster project execution. The core plant deliveries are taking more than a year to be accomplished. For the growth of biotechnology industry the suppliers should work to reduce this time period utilizing the strong skills available in India. Some of them are already taking some key initiatives in this regard. Take for instance, BioRad India. It has connected all the regional offices to the main server through VPN. Wagle explained, "This will create a direct link between the regional representatives and the head office at the US. We hope that this will speed up our operations and bring more efficiency for the customer. We have also started managing the data on the basis of customer satisfaction and responses for our products." However not many companies that are manufacturing equipment, reagents etc. useful are eager to make investments to meet the requirements of the customers and to maintain international standards. Satish Tandon of Alfa Laval India said, "Indian entrepreneurs are not so quality conscious when it comes to investments."

quality products to the clients," Dhiren Wagle, country manager, BioRad India.

Looking beyond the obvious

Both the MNC and Indian suppliers have stepped up their efforts to address the new and emerging needs of the biotech sector. "The Indian engineering capabilities are projected under a good banner. Several international engineering companies will not hesitate to move in and manufacture out of India. Implementation of the IPR will lend confidence to them. The global market for custom built engineering goods is approximately $10-15 billion with the US and Europe taking the major share. Even a small percentage of this would mean big for us. Therefore opportunities are plenty, but cannot be captured unless investments into quality are made," said Anil P Kariath, chief operating officer, Sartorius India, the first company to bag the Rabo India Bio Exporter Award at the Bangalore Bio 2003. Continuing Dr Ramakrishnan said, "The scenario in India is getting favorable for MNCs. The thing, which is mostly needed, is some good joint ventures with MNCs. The country has very good potential .The government is showing interest in the projects initiated by the entrepreneurs. This is the right moment for the industry to move ahead." Considering the present positive trend in the industry many biosuppliers have taken initiatives like investing in R&D activities, providing maintenance and support services to the clients, organizing seminars, workshops for the distributors. Companies also offer effective and quality sales services through a team of skilled workforce. These steps have helped the companies to build very good rapport with the clients. Pooja Labs has set up its own R&D in scientific instrumentation. Built on self-reliance to guard towards import substitution and pursuit of perfection. Its faith in self-reliance is demonstrated in its import substitution products. Anurag Toshniwal, director, Toshniwal Instruments India said, "The company has taken up R&D activities for the development of analytical instruments with high technology /microprocessor based /computer operations, modifications of instruments to reestablish the performance in extreme Indian environmental conditions. Besides it is also working on redesigning of instruments for reduction in import contents and improvement of design as per customers feed back on operations for better performance and reliability. The Toshniwal Instruments is redesigning and updating the existing products to meet competition of new models from abroad. The development of new model atomic absorption fully microprocessor controlled automatic instrument will help the company in cost reduction by indigenisation, saving in foreign exchange by import substitution, better service to customers and capability to meet competition from well known foreign analytical instrument manufacturers. Hence the companies have to further accelerate R&D activities to cover design and in house development to face stiff competition from multinationals."

"Indian entrepreneurs are not so quality conscious when it comes to investments," Satish Tandon of Alfa Laval India

In keeping with the latest trends in biotechnology, Cambrex Chemicals, which has clients like Sun Group, Baxter, Wockhardt, Albert David, Intas Pharmaceuticals, and Panheber, has introduced Pyrogene, which is a recombinant product that can be used to detect endotoxins, an effective alternative for the lysate manufactured from the Limulus blood. Dr Ramakrishnan of Agilent Technologies said, "Agilent is entering the life sciences industry by providing massspectrometer, Nano HPLC and solutions for proteomics research. And also bringing DNA array scanners as well as 2100 Bio-analyzers." Accurex Biomedicals in tune with changing times today uses the state-of-the-art office automation technology to support product management, sales, finance, administration and customer service. The company has installed intracompany LAN capability. Its marketing department manages domestic and overseas business activities. Accurex has a strong sales team and a network of over 120 distributors. The marketing department of Accurex offers continuous training and technical support to the sales team to cater to customer needs. And its marketing strategies supporting value-added selling philosophy has now begun to bear fruits for the company.
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