Capsule Manufacturing in India Boosted by New ACG Mega Facility

Global pharmaceutical industry supplier ACG recently announced plans to invest INR 6 billion (USD 80.56 million) to build Asia’s largest capsule manufacturing unit in India (near Aurangabad in the Western State of Maharashtra). This facility will increase India’s industrial capacity to supply high quality, safe and affordable medicines and nutraceuticals globally. ACG was founded in Mumbai in 1961 and is now present worldwide, providing integrated solutions for the pharmaceutical and nutraceutical industries.

Creation of the largest capsule manufacturing plant and research center in Asia

With a presence in more than 138 countries, ACG is the world’s largest integrated supplier of solid dosage products and services – providing hard-shell capsules, film and sheet barrier solutions, tracking and traceability systems and processing, packaging and inspection equipment.

The company has signed a memorandum of understanding with the state government of Maharashtra to produce 40 billion capsules per year, for Indian and international pharmaceutical and nutraceutical companies. The government of Maharashtra has granted “megaproject” status to this company.

According to the announcement, the future facility is expected to create around 1,000 direct and indirect jobs by 2023 in the region. The announcement also mentioned that the proposed plant would use the sustainable design principles of internationally recognized Leadership in Energy and Environmental Design (LEED) and be significantly powered by renewable energy sources.

ACG intends to set new benchmarks in capsule manufacturing and research facility using automation and Industry 4.0 technologies to minimize resource intensity and ensure products meet best practice Global Manufacturing (GMP).

Overview of the Indian pharmaceutical industry

India ranks third in the world in terms of pharmaceutical production by volume and 14e in terms of value. The Indian states of Andhra Pradesh, Gujarat, Maharashtra and Goa are the country’s main pharmaceutical manufacturing hubs. Bulk drug clusters are located in Gujarat (Ahmedabad, Vadodara), Maharashtra (Mumbai, Aurangabad, Pune), Telangana (Hyderabad), Tamil Nadu (Chennai), Karnataka (Mysore, Bangalore) and Andhra Pradesh (Visakhapatnam) .

India’s pharmaceutical sector meets over 50% of global vaccine demand, 20% of global generic demand by volume and 25% of all drugs in the UK.

India’s pharmaceutical industry was estimated at US $ 42 billion in 2021, with a network of around 3,000 pharmaceutical companies and 10,500 manufacturing units. It is also expected to reach US $ 65 billion by 2024 and US $ 120-130 billion by 2030. According to an OECD estimate, the Indian pharmaceutical industry will grow by 317% between 2017 and 2060. to dominate the global pharmaceutical market, followed by Indonesia. .

Some of the major domestic industry players include Sun Pharmaceutical Industries, Cipla, Lupine, Dr. Reddy’s Laboratories, Aurobindo Pharma, Zydus Cadila, Piramal Enterprises, Glenmark Pharmaceuticals, and Torrent Pharmaceuticals.

India’s current foreign direct investment (FDI) policy allows 100% automatic FDI in completely new pharmaceutical projects and 74% automatic in brownfield projects.

In addition, the Indian pharmaceutical market is supported by the following production incentive schemes (PLI) boost domestic manufacturing capacity, including high value-added products along the global supply chain. The executing agency for these programs is the Department of Pharmaceuticals.

  • PLI Scheme for Key Raw Materials (KSM) / Medicines Intermediates (DI) and Active Pharmaceutical Ingredients (API) (PLI 1.0)
  • PLI Regime for Pharmaceuticals d (PLI 2.0)

The Indian Contract Manufacturing Organization (CMO) market

The concept of contract manufacturing has evolved rapidly in India due to the growing presence of multinational pharmaceutical companies.

India has an advantage over countries like Vietnam, China and Ireland in manufacturing drugs and medical products due to the presence of key resources – a large labor market, a technically skilled workforce. qualified and production premises approved by WHO-GMP.

According to the Indian Drug Manufacturers Association, the pharmaceutical contract manufacturing industry in India is growing by 20%, which offers great opportunities for small and medium enterprises (SMEs). The current market value is estimated at 50 percent of national production, which is about 5.3 billion US dollars.

In addition, the Indian CMO market is expected to register a compound annual growth rate (CAGR) of 13.3% during the period 2021-2026, fueled by higher return on investment and therapeutic efficacy. Rising demand for injectable drugs, especially in cancer research, will create higher value in India’s pharmaceutical contract manufacturing market. Injectable drugs offer higher yields compared to other types of drug formulation.

Some of the leading pharmaceutical contract manufacturing companies in India include Gracure Pharmaceuticals Ltd., Nvron Life Science Ltd., Kremoint Pharma Pvt. Ltd., Makcur Laboratories Ltd., etc.

Pharmaceutical R&D in India

According to Statista data, Indian pharmaceutical companies spend less than 13% of their annual turnover on research and development (R&D). In FY2020, the highest R&D spending was made by Lupine at US $ 225 million, followed by Dr Reddy (US $ 204 million) and Cipla (US $ 173 million).

In October 2021, the Department of Pharmaceuticals (DoP) released a draft policy to catalyze R&D in the pharmaceutical and medical technology (pharma-medtech) sector to make India a leader in drug discovery and innovative medical devices. This policy has a ten-year perspective and will be implemented through an action plan defining roles, responsibilities, activities, targets and deadlines. The action plan will then be broken down into five-year and annual activities to facilitate its implementation. A high-level working group will be set up within the DoP to guide and review the implementation of the policy.

The policy project to catalyze research, development and innovation in the Pharma-MedTech sector in India mainly focuses on:

  • Simplify regulatory processes to enable rapid drug discovery and development and innovation in medical devices.
  • Explore mechanisms to incent private sector investment in research, assess various funding mechanisms including budget support, venture capital, CSR funding, etc., and provide tax incentives to support innovation .
  • Strengthening of the R&D ecosystem through increased collaboration between industry and academia in order to develop mechanisms to harmonize research according to industry requirements.

Speaking recently at the Global Innovation Summit hosted by the Indian Pharmaceutical Alliance in November 2021, Amitabh Kant (CEO, NITI Aayog) called on the Indian pharmaceutical industry to focus on R&D and innovation in emerging technologies in the pharmaceutical sector in order to position the Indian pharmaceutical sector. at the top of the global landscape.


About Us

India Briefing is produced by Dezan Shira & Associates. The firm assists foreign investors throughout Asia from offices around the world, including Delhi and Mumbai. Readers can write to india@dezshira.com for more help on doing business in India.

We also maintain offices or have alliance partners helping foreign investors in Indonesia, Singapore, Vietnam, Philippines, Malaysia, Thailand, Italy, Germany, and the United States, in addition to Bangladesh and Russia.

About Catherine Sherrill

Check Also

Will we need COVID-19 vaccines every year? Maybe not

Now that the Food and Drug Administration has approved COVID-19 vaccine recalls for all adults, …