Chemical Industry on a path of muted recovery

Chemical makers have grown more confident that the global economy and industry demand are pulling out of one of the deepest dives since at least the early 1980s. Second-half economic forecasts issued recently by ACC and German chemical industry association VCI (Frankfurt) called an end to demand declines but warned of slow recovery. While the surge in energy and stock prices from early 2009 levels would seem to signal a strong rebound, chemical makers appear to be bracing for a slow recovery.

European petrochemical sector shows that the market has stabilized but producers acknowledge the need for further rationalization. For operating rates to come back to good levels, some capacity will have to shut down in Europe, claims leading producer . The same is true for the U.S. Dow Chemical announced earlier this month that it would end styrene production at Freeport, TX as it continues to trim North American olefins and styrenics production to match underlying demand and reduce its exposure to basic chemicals.

Industry challenges like overcapacity, weak demand, and broader economic concerns arising from high levels of unemployment and a still-fragile financial system are likely to mute recovery. The question is whether this development is a sustainable one and long lasting basis.There are still unsolved issues caused by the financial crisis and the chemical industry is not yet on a solid growth path at least as of now.

ACC’s recently released third-quarter outlook shows that conditions have stabilized but notes that 2009 activity will fall well below year-ago levels. U.S. chemical industry output is expected to fall 10.7% in 2009, before posting a gain of about 1.5% in 2010. Demand is clearly moving off the bottom but chemical makers could face a slow path to full recovery.

WHO's New guidelines on swine flu

Issuing a new set of guidelines for the use of drugs against swine flu (H1N1), the World Health Organization(WHO) has said patients with uncomplicated illnesses do not need to take antiviral drugs.


Worldwide, most infected patients continue to display typical influenza symptoms and fully recover within a week without any form of medical treatment, the WHO said.According to the new guidelines, formed by consensus by a global group of experts, patients with uncomplicated illnesses do not need to be treated with antiviral medicines.

The guidelines emphasise using drugs such as oseltamivir and zanamivir, to which the pandemic virus is susceptible, to prevent severe illness and deaths, reduce the need for hospitalisation, and shorten hospital stays. When properly prescribed, oseltamivir is found to significantly curb the risk of pneumonia, a leading cause of death for both the pandemic and seasonal influenza, it said.

WHO recommends treatment with the drug as soon as possible among people who are severely or whose conditions begin to deteriorate. Where oseltamivir is not available, zanamivir can be given. The virus is currently resistant to a second class of antiviral, known as M2 inhibitors.As pregnant women are among the groups considered to be at increased risk, WHO recommends that they receive antiviral treatment as soon as possible after the onset of symptoms.

The guidelines call for prompt treatment for children including those under five years of age with severe or worsening illnesses, as well as those at risk of more severe or complicated illness.Otherwise healthy children over five years, WHO said, do not need antiviral treatment unless their conditions persist or worsen.

If someone with confirmed or suspected H1N1 infections shows symptoms including shortness of breath, chest pain and high fever lasting beyond three days, they should seek immediate medical attention. Among children, warning signs include fast or difficult breathing, lack of alertness, difficulty in waking up and little or no desire to play..

symptoms of Swineflu (H1N1) A compilation

The typical symptoms are:

* a sudden fever (a high body temperature of 38°C/100.4°F or above), and
* a sudden cough.

Other symptoms may include:

* headache,
* tiredness,
* chills,
* aching muscles,
* limb or joint pain,
* diarrhea or stomach upset,
* sore throat,
* runny nose,
* sneezing, or
* loss of appetite.


Call your GP directly if:

* you have a serious existing illness that weakens your immune system, such as cancer,
* you are pregnant,
* you have a sick child under one year age,
* your condition suddenly gets much worse, or
* your condition is still getting worse after seven days (five for a child).

It is already known that you are particularly at risk if you have:

* chronic (long-term) lung disease,
* chronic heart disease,
* chronic kidney disease,
* chronic liver disease,
* chronic neurological disease (neurological disorders include motor neurone disease, multiple sclerosis and Parkinson's disease),
* immunosuppression (whether caused by disease or treatment) or
* diabetes mellitus.

Also at risk are:

* patients who have had drug treatment for asthma within the past three years,
* pregnant women,
* people aged 65 and older, and
* young children under five.

For most people, the illness appears to be mild. Cases have been confirmed in all age groups, but children and younger people seem much more likely to be affected.

IMF Predicts Stronger 2010 Global Rebound After 09 Contraction

IMF predicts the global economic rebound next year will be stronger than it forecast in April as the financial system stabilizes and the pace of contractions from the U.S. to Japan moderates. IMF said in a revised forecast that the world economy will expand 2.5 percent in 2010, compared with its April projection of 1.9 percent growth. A contraction this year will be 1.4 percent, worse than an April forecast for a 1.3 percent drop..

The improved outlook for next year reflects differing stages of recovery across the globe, with emerging economies including China helping drive the world out of the worst recession in six decades, while Europe lags behind the U.S. and Japan. Still, the fund warned that the pickup is expected to be “sluggish” and called repairing the international banking system a priority.

Advanced economies will continue to lead the slump this year by shrinking 3.8 percent. They will grow 0.6 percent in 2010, more than forecast in April, when the fund expected no growth for next year.

As per IMF the U.S. GDP will shrink 2.6 percent this year before expanding 0.8 percent in 2010 while for Japan likely to expand by 1.7 percent next year however this year its like to contract 6 percent.

Emerging and developing economies will grow 4.7 percent next year, a 0.7 percentage point increase from the previous forecasts. This year they will expand 1.5 percent, compared with a 1.6 percent expansion expected in April.

China’s growth is forecast to accelerate to 8.5 percent next year, a percentage point more than expected in April, after slowing to 7.5 percent this year. India’s economy will expand by 6.5 percent in 2010, compared with the April forecast of 5.6 percent, after a 5.4 increase percent this year that was higher than the IMF’s prior estimate.

Bloomberg

India Budget 2009, Highlights

* Govt plans to bring back economy to high growth of 9%
* GDP growth dipped to 6.7% in FY'09
* FM to make pre-budget talks with state FMs annual affair
* Fiscal deficit up from 2.7% to 6.8% of GDP
* Return to fiscal prudence at the earliest
* 'Aam admi' is focus of all programmes and schemes
* IT exemption limit raised; Rs 15,000 (rpt) 15,000 for Sr.Citizens
* Limit raised by Rs 10,000 for tax payers, including women
* 10% surcharge on personal income tax scrapped
* Fringe Benefit Tax abolished
* No change in corporate tax
* Defence gets Rs 1,41,703 cr, up 34%
* Total fiscal stimulus in 2008-09 amounts to Rs 1,86,000 cr
* IIFCL to evolve mechanism for increased funding of infra
* IIFCL to re-finance commercial bank loans up to 60 per cent in critical
projects through PPP to tune of Rs 1,00,000 cr
* Allocations for highways being stepped up by 23 per cent
* Funds for housing, amenities for urban poor up Rs 3,973 cr
* Funds for JN Urban Renewal Mission up 87% to Rs 12,887 cr
* Assistance for storm-water drainage project up by Rs 300 cr
* Farm credit target up at Rs 3,25,000 cr from Rs 2,87,000 cr
* Interest rates incentive to farmers to repay loans on time
* Additional Rs 1,000 crore for accelerated irrigation scheme
* Export Credit Guarantee scheme extended till March 2010
* 2% interest subvention (IS) scheme extended till March 2010
* IS scheme to cover 7 job-oriented sectors, including textile, handicrafts and handlooms.
* Commodity Transaction Tax abolished
* New pension system trust exempted from STT; DDT
* Minimum Alternate Tax hiked to 15% from 10%
* Tax holiday on petro sector extended to natural gas
* 100% tax deduction on political donation
* Stimulus for print media for another six months
* Fertiliser subsidy to be nutrient-based, not price
* Expert Grp to form viable pricing for imported petro goods
* Banks and insurance firms to remain in public sector
* Rs 100 cr one-time grant to expand banks in unbanked areas
* Govt committed to provide Rs 100 a day as wages under NREGA
* Allocation of Rs 39,100 cr to be made for NREGA
* NREGA coverage increased to 4.74 crore households in FY'09
* Work National Food Security scheme has begun
* Allocation for Bharat Nirman being raised by 45 per cent
* Rs 2,000 cr rural housing fund under National Housing Bank
* Mission for female literacy with focus on minorities, SC/ST
* 50% of all rural women to be brought into SHG programmes
* Full interest subsidy for students in select institutions
* Five lakh students to benefit
* Modernisation of national exployment exchanges
* Action for social security to unorganised sector workers
* New pension benefits for 12 lakh jawans and JCOs from July
* One lakh dwelling units for paramilitary forces personnel
* Unique Identification Card to citizens in 12-18 months
* Provision of Rs 120 crore for UIC project
* Rs 2,113 crore allocated for IITs and new IITs
* Rs 3472 cr for Commonwealth Games from Rs 2112 cr

Update : Pharma Industry as per the latest Economical survey

The pharma industry in the country has grown from mere Rs 1500 crore turnover in 1980 to over Rs 78,000 crore in 2008, with about 10 per cent share in the volume of global production, according to the latest Economic Survey which called for decontrolling of prices.

High growth has been achieved through the creation of required infrastructure, capacity building in complex manufacturing technologies of active ingredients (APIs) and formulations, entering into drug discovery through original and contract research and manufacturing (CRAM) and clinical trials and product specific strategies of acquisition and mergers. The domestic sector had a production turnover of Rs 47,241 crore from about 10,000 small-scale and 300 large and medium manufacturing units in 2008, the survey said.

The survey, presented by finance minister on Thursday in the Parliament, also said price control should be limited to essential drugs in which there are less than five producers. All others should be decontrolled.

Pharmaceutical exports have grown from Rs 6,256 crore in 1998-99 to Rs 30,759 crore in 2008. Exports of pharmaceuticals have been consistently outstripping the value of corresponding imports in the period 1996-97 up to 2007-08. Exports registered a growth rate of 25 per cent in 2007-08 over 2006- 07. The sector attracted FDI amounting to US$1,401.60 million during 2000-01 to September 2008, of which, US$125.30 million occurred during April- September 2008, according to the survey.

Investments in pharmaceutical sector are now expanding into areas of innovative R&D focused outsourcing opportunities like clinical trials, data management services, pharmaceutical informatics, lead discovery and optimization, pharmaco-kinetics and pharmaco-dynamics and pre-clinical drug discovery in combinatorial chemistry, chiral chemistry, new drug delivery systems, bioinformatics and phyto-medicines. "The Indian pharma industry is taking leaping strides in innovative drug discovery with clinical trials underway in 34 molecules. Consequently, the Indian drug discovery market has grown from US$ 470 million in 2005 to US$ 800 million in 2007," it said.

Dow to close 3 Plants in US

Dow Chemical is closing three US manufacturing plants, including an ethylene production unit in Hahnville, Louisiana in a further bid expand its specialty chemicals business. The other facilities earmarked for closure, a second in Hahnville and one in nearby Plaquemine, make ethylene derivatives for plastics manufacture, including for the production of pharmaceutical packaging.

Dow said that the closures will cost around $700m (€497m), but will allow it to save $100m a year over the longer term. It added that the 100 or so workers who staff the three plants will be offered jobs elsewhere in the company.

The Biosimilars- Future of cure

The future of pharmaceutical industry now seems lies with the biotechnology as there is a growing resistance to the use chemical based drugs world over. Biopharmaceuticals thus becoming the fastest growing segment of the pharmaceutical market today. Nearly a quarter of the top 100 drugs in 2007 were biologics and 13 of them achieved blockbuster status of more than $2 bn in worldwide sales. Both generic drug manufacturers and large pharma companies are angling for a share of this emerging niche in the $75 bn global market for biosimilars. Generic drug maker, Sandoz has already taken the lead on this segment with three biosimilars approved in Europe namely Omnitrope, Binocrit and Zarzio. Teva pharmaceuticals, a leading generics producer, has plans to become a major player in biosimilars. It has one product on the European market (Tevagrastim) and has improved its capabilities in biopharmaceuticals through the recent acquisitions of Barr Pharmaceuticals and CoGenesys in the US. Teva's strategic partnership with Lonza to jointly develop, manufacture and market biosimilars confirms its resolve to enter into biosimilar market in a big way. Merck & Co has recently established Merck BioVentures and agreed to purchase a portfolio of biosimilar candidates and commercial manufacturing facilities from US-based Insmed. Indian manufacturers such as Ranbaxy, Dr. Reddy's Lab, Biocon and Wockhardt, have also plans to venture into biosimilar market by taking approvals in Europe and, ultimately, in the US.

Biosimilar products do attract a lot of interest and controversy. Because, biological drugs are complicated and expensive and used to treat complex conditions. A key point for developers of biosimilars is the issue of interchangeability. This is going to be a hard sell in the regulated markets where prescribing of chemical generics is already unpopular. The task will be more difficult for biosimilars where worries over equivalence will be greater and less easy to counter. With a regulatory framework already in place in the European Union to address the safety of biosimilars, the opportunity represented by these products has been proven and is growing there. Over 10 biosimilars have been approved in Europe, using the EU's specially adapted approval procedure. In Japan, the first biosimilar has been submitted for review recently. But, the US, the largest pharmaceutical market, is yet to open up for biosimilars as the biotech industry there is strongly opposed to the entry of biosimilar products. Introduction of biosimilars in the US market should bring down the cost of medicine substantially for critical diseases and make them available to a wider population. And that depends on the US government. If the proposed legislation before the US Congress is passed without much changes it should alter the whole look of the global biopharmaceutical industry to the advantage of millions of patients who are now denied of the benefits of advanced but expensive biologics.

Pharmabiz

Factory Output Rise Adds To Revival Signs!!!! or just an effect of stimulus packages

India's industrial output rose in April, beating forecasts for a fall, driven by a pick-up in domestic demand that analysts said confirmed nascent signs of recovery and an end to the central bank's rate-cutting cycle. Factory output in April rose 1.4 per cent from a year earlier, recovering from a revised fall of 0.8 per cent in March and bettering forecasts for a decline of 0.2 per cent, adding to signs from China that activity in emerging economies was picking up.

Figures from China showed factory output growth rebounded in May alongside stronger expansion in credit and consumer spending, adding to hopes it can lead a global revival.

Manufacturing output, which accounts for 79 per cent of India's industrial production, rose an annual 0.7 per cent in the first month of the 2009/10 fiscal year.

The benchmark 10-year bond yield rose 6 basis points to a two-month high 6.94 per cent on the data, which was seen confirming an end to the central bank's aggressive rate cuts since last October.

Before the April rise, output had fallen in three of the previous four months. The data also reinforced other signs that domestic demand was picking up in India. Stronger-than-expected March quarter growth helped Asia's third-largest economy to expand by 6.7 per cent in 2008/09, although that was a six-year low and well below rates of 9 per cent or more for the previous three years.

The signs of a bottoming in growth and the re-election of the ruling coalition have seen economists revise up their forecasts for 2009-10, with the central bank's estimate of about 6 per cent now at the bottom of private sector economists' expectations.

Car sales rose an annual 2.5 per cent in May, climbing for the fourth month, and strong demand in rural and semi-urban areas pushed up motorcycle sales by 12.3 per cent from a year earlier.

Infrastructure output, accounting for a quarter of factory production, grew 4.3 per cent in April from a year earlier, data showed earlier this month.

A survey of purchasing managers last week showed manufacturing expanded for a second month in May to its highest in eight months.But exports remain in the doldrums, and the government expects their decline to continue until September. Exports fell 33.2 per cent in April from a year earlier to $10.74 billion.

Although India is less dependent on exports than China or other East Asian countries, with exports accounting for about 15 per cent of GDP, the sharp drop has offset some of the domestic gains.

Reuters

Reliance Industries's German Unit Goes Bankrupt

The global economic downturn has hit India's most valued company Reliance Industries, forcing it to today to declare as insolvent its German unit Trevira, a specialty polyester manufacturer. Reliance Industries had acquired Trevira five years ago for Rs 440 crore. This acquisition in 2004 had propelled Reliance to the position of the world's largest polyester fiber and yarn producer. The German unit had 1,800 employees as of March 2009 and a turnover of Euro 323 million last year.

Trevira faced severe demand contraction in its principal market segments due to the global financial crisis .Trevira, which was part of German industrial conglomerate Hoechst AG before being acquired by Reliance, manufactures high-value branded polyester fibers and filament yarns or the automotive industries, home textiles as well as for technical applications. Trevira has production units in Germany, Denmark, Poland and Belgium.

Tamiflu Vs Flu, who cld be the major threat

The cure may, at times, be worse than the disease. That would now seem to be the case with tamiflu, the drug used more than any other for treating and preventing the dreaded bird flu — caused by the pathogenic H5N1 virus.

Going by the findings of a study by researchers of the Oxford-based Centre for Ecology and Hydrology, the consequences of large-scale consumption of tamiflu can be scarier than even those of a bird flu outbreak. The main fear is that the many tonnes of this drug that are in stock in various countries for combating a possible pandemic would, on consumption, play havoc with wildlife besides increasing human health hazards. Specifically, the scientists have warned that the bulk of this drug would get excreted through urine and flushed down sewers into natural water bodies and rivers, devastating aquatic bio-life. The worst hit would most likely be micro-organisms, including all manner of useful bacteria, present in these waters. This is because oseltamivir carboxylate, the active anti-viral ingredient of tamiflu that also kills bacteria, is resistant to bio-degradation and cannot be eliminated through normal sewer water treatment.

Its toxicity can, therefore, persist in water bodies for weeks, even if only treated water is released in them. As a result, fish, birds and other creatures that dwell in these tanks and rivers or feed on them could face ruin. Man, too, needs certain kinds of bacteria in the gut for the digestion of food. All these systems could go haywire if the need should arise to use tamiflu on a mass scale. As if this scenario were not alarming enough, the scientists have also pointed out that widespread consumption of this drug can create conditions in which the H5N1 virus, which normally infects only birds and some animals and does not get transmitted to humans, can mutate into forms capable of being passed on to humans.

Another likely fall-out could be the development of immunity against oseltamivir carboxylate in H5N1 virus itself, rendering tamiflu ineffective. This would further heighten the risk of a flu pandemic. And, what is worse, should this happen, mankind would find itself fighting a losing battle till an alternative vaccine targeted specifically at the new form of virus is developed, which might take months. Of course, it can be argued that these dreadful implications are hypothetical even though they emanate from a scientific study carried out on rivers in the US and UK. In any case, the possible hazards are far too serious and indeed unnerving to be disregarded.

The bird flu has not yet been eradicated and its incidence continues to be reported from the south-east Asian region. What needs to be remembered is that the flu outbreak of 1918, albeit of a different virus strain, had killed nearly 50 million people. Equally essential to bear in mind is the alarming decline in the population of vultures, which are nature’s scavengers, owing to the indiscriminate use of diclofenac, an anti-inflammatory drug, for the treatment of animals. Its residual toxicity in animal carcasses is killing the vultures who feed on them.

It is, therefore, imperative to revisit the strategies devised to cope with the bird flu menace and to look for safer drugs. An anti-influenza vaccine developed at the Bhopal-based high security laboratory of the Indian Council of Agricultural Research is believed to be a less harmful alternative to tamiflu. If that is indeed the case, enough stocks of this vaccine, as also adequate production capacity, need to be built up. Simultaneously, research needs to be initiated to evolve suitable biological and chemical treatments for sewer water to minimise its residual toxicity before the discharge is put out into natural water bodies.

Savings a/c will earn daily interest

Savings bank account can earn you more interest now. The Reserve Bank of India (RBI) has issued a directive in its policy document that will change the way interest is paid on the minimum amount present in a savings bank account each day.At present, the interest (3.5 per cent per annum) is calculated on the minimum balance held in the account from the 10th of each month to the last day of that month. So, if a bank customer has Rs 1 lakh in his savings account one day and then Rs 100 another day, the minimum balance taken for calculation of interest in the period would be Rs 100.

But, from April 1, 2010, the interest paid on the savings account will be on the daily minimum balance. In other words, even the Rs 1 lakh balance in the savings account will earn the customer interest, even if it’s withdrawn later on. As per the new directive issued by RBI, only commercial banks will need to follow this new method of interest payment on savings accounts. Commercial banks include all banks other than co-operative ones.

This means that the money will start earning higher interest even as it remains liquid and safe.

Financial far sight

The ongoing financial crisis in the mature markets abroad has led to much introspection in the domain of policy-making and academia. Products must be made more transparent, with risk mitigation and prudential measures much better aligned. The quality and effectiveness of financial supervision must improve. It follows that the gaps and weaknesses in the prudential norms do need to be properly addressed, with proactive oversight and follow through. The crisis has much to do with the heavy issuance of credit-linked, mostly mortgage-backed, securities in the US, and subsequent large-scale default on the underlying assets, mainly housing.

The fact is that the push for increased sub-prime mortgages earlier this decade followed by securitisation of the receivables greatly compounded the problem.Of the trillions of dollars worth of asset-backed securities issued globally, roughly 60% had AAA credit-rating, the safest possible, according to Fitch Ratings. This is way, way too high. In sharp contrast, less than 1% of corporate bond issues are triple-A rated.

The structured products are particularly default prone in an economic downturn with substantial, correlated risks. It’s clear that the structured products were glaringly faulty. As we. in India moving for more reforms in the financial sector, which includes creating scope for new products, we need much more for skilled human resources and credible supervision . We do need to draw the right lessons from the crisis abroad and implement. Its the far sight that matters!!!!!!!!

5 Indian firms among world's 25 'unsung' innovative cos

As many as five Indian companies like Indian Hotels, footwear firm Bata India have been named in the list of world's 25 'unsung' innovative companies by the BusinessWeek magazine.According to a list compiled by the BusinessWeek 'The world's 25 unsung innovative companies' includes firms which have failed to get a position on the the list of world's most innovative companies but are likely to become household names like Apple, Google in the next 10-20 years.The other three Indian firms on the list are-- Bajaj Holdings & Investment,Godrej Industries and Yes Bank.

Apple, Google, Toyota, and Microsoft--the corporations at the top of this year's Most Innovative Companies ranking are household names the world over. But they wouldn't have all been winners 10 or 20 years ago. The same may be true 10 or 20 years from now," the magazine said.About Indian Hotels, which runs the luxury hotel chain of Taj Hotels & Resorts, the magazine said, "its slick and modern accommodations and attentive service, which it attributes to a merit system that links employee pay to customer satisfaction ratings.

About the footwear retailer Bata India the magazine said, "whether it be canvas sneakers, high heels, or rubber flip-flops, the products are known for their durability and Indian flair.Bajaj Holdings & Investment formerly known as Bajaj Auto, operates through two arms-- financial and investment services, while the other manufactures two-wheeled vehicles. Another Indian firm Godrej Industries which makes and sells bulk chemicals and edible oils has also been named among the unsung list.
About Godrej, the magazine stated that," the company is developing customer-relationship software that will enable buyers to track orders and transactions and receive updates through personalised Web pages.Further, about Yes Bank it stated that bank had carved out a niche in the India by using technology to keep costs low while providing "value added services" to its customers.

Apart from the five Indian entities, Bangladesh's Grameen Bank founded by Nobel Peace Prize winner Muhammad Yunus has also reserved a seat on the list. Interestingly, 97 per cent of Grameen Bank's client are women.

Other companies on the list include Alibaba.com, women's apparel maker Bravissimo, vaccum cleaner firm Dyson Direct, publishing house Future, technology consultancy Grupo Inforges, video entertainment firm Hulu and design consultants Ideo.

Lilly seals a R&D deal with Zydus

Lilly and Zydus established a collaboration to discover and develop potential drug candidates against a novel target, with the research primarily focused on cardiovascular diseases.

Zydus’ role within this covers drug discovery, lead identification and optimisation and conducting preclinical studies and clinical trials up to Phase II human proof-of-concept. In return Lilly will provide expertise and feedback regarding toxicology, ADME (adsorption, distribution, metabolism and excretion), chemistry, biology, clinical and regulatory aspects when deemed necessary to increase the probability of success. Lilly will also supply the chemical starting points.

The deal includes the option for Lilly to license any of the resulting molecules at different stages of development, with Zydus receiving up to $300m (€226m) in milestone payments. Zydus would also receive royalties from any product that reaches commercialisation.

another wave of M & A in Pharma

So far three deals that topping $150 billion in value have been announced in the global pharma industry this year. Merck & Co. acquired Schering Plough for $41 billion and Roche announced $47 billion plans to buy an additional 44 per cent in Genentech, and earlier in January, Pfizer had announced the $68 billion purchase of Wyeth. Aimed at cutting costs and bolstering research pipelines, the mergers are reminiscent of the last round of dealmaking in the late 1990s. And at that time it had roiled some Indian subsidiaries.

In 1998, Germany’s Hoechst Marion Roussel merged with France’s Rhone Poulenc to form Aventis. In 2000, US’s Abbott acquired Knoll from Germany’s BASF. In the restructuring that followed, one Indian arm of each “combined” firm was sold. The Indian arms had little in common with their parent firm with decades-old products that had long fallen off the parent’s radar. It was clearly difficult to extrapolate synergies seen from a global merger. The Indian pharma market also figured low in Big Pharma’s priorities at that time but India has recently emerged as an important market. Every MNC knows they need an India piece. Some, such as Merck, that exited in the 1980s are back with a new focus. This time around, there may be no such sell-offs.

BW

World economy to shrink below zero: IMF chief

The world economy is likely to shrink to "below zero" this year, in what many are now referring to as the "Great Recession". "The IMF expects global growth to slow below zero this year, the worst performance in most of our lifetimes," IMF Managing Director Dominique Strauss-Kahn told African political and financial leaders in the Tanzanian capital.

"Continued de-leveraging by world financial institutions, combined with a collapse in consumer and business confidence is depressing domestic demand across the globe, while world trade is falling at an alarming rate and commodity prices have tumbled" Strauss-Kahn added.

As advanced countries focus on problems in their own economies, Strauss-Kahn called on the international community not to forget Africa, where regional growth is expected to slow sharply to 3 percent this year, half the rate of the past five years.

Strauss-Kahn warned the projection for 3 percent "may be too optimistic".

"Even though the crisis has been slow in reaching Africa's shores, we all know it is coming and its impact will be severe," he said. "We must ensure that the voices of the poor are heard. We must ensure that Africa is not left out," he added.

He said the crisis threatens to unravel Africa's economic and social success over the last decade and that millions of people will be thrown back into poverty.

"This is not only about protecting economic growth and household incomes - it is also about containing the threat of civil unrest, perhaps even war. It is about people and their futures," he added.

He said the combined impact of economic and financials shocks on Africa's growth will be severe. Financial flows are becoming more scarce, trade financing even scarcer and more expensive and foreign investment in Africa's stock and bond markets has fallen, he added.

"As growth around the world has almost come to a halt, demand for Africa's products is plunging. Tourism revenue is likely to decline as consumers around the world are tightening their belts," Strauss-Kahn said.

Reuters

Is Piramal healthcare on sale!!!!!!!!!!

Piramal healthcare, india’s fifth largest pharmaceutical company by revenues (Rs 2,873 crore in FY 2007-08), may sell its branded generics business, Healthcare Solutions, to focus on contract research and manufacturing services (CRAMS). This is contrary to the perception that promoter Ajay Piramal is selling the entire company.
Its being remoured that Piramal appointed Zurich-headquartered Credit Suisse to look for prospective buyers. UK drug giant GlaxoSmithKline (GSK), France’s Sanofi-Aventis and Germany’s Merck KGaA are believed to have shown interest.

Recent media reports suggested that Piramal was in talks for the sale of the entire company. However, Piramal denied this in a 7 February communiqué: “Certain sections of the media have been speculating about a potential sale of the company.

Healthcare Solutions that recorded revenues of Rs 1,291 crore in fiscal 2008, or about 40 per cent of the company’s total revenues, includes a portfolio of products in therapeutic segments ranging from respiratory and anti-infectives to diabetes, marketed only in India.

According to a recent McKinsey study, the Indian market is likely to triple to $20 billion by 2015. While Sanofi-Aventis and Merck have a relatively small presence in India, GSK is one the largest companies in the domestic market after Ranbaxy Laboratories and Cipla. However, GSK’s sales have witnessed poor growth over the last year, at just 2 per cent to Rs 1,752 crore in 2008.

Piramal started investing in Crams, a market estimated at about $800 million in India and growing at 40 per cent every year, almost a decade ago and has made several acquisitions abroad, including Pfizer’s Morpeth plant in the UK in 2006 and Avecia’s custom manufacturing business in 2005, to expand its customer base. The group still needs to transfer more business to India to improve the overall margins of that business.” The process may take longer than expected.

BW

Pfizer bid for Wyeth set to spur consolidation in drug industry

Pfizer Inc's bid to buy rival Wyeth for more than $60 billion is expected to increase the level of competition for capturing the generic drugs market, especially in economies like India. However, before the deal can go through here, it would need an independent valuation of the companies to determine how much shares the investor of each company would hold in a new entity.

New York-based Pfizer, the world's biggest drugmaker, and Wyeth, of Madison, New Jersey, have been negotiating for months, media reports say. The combined company would have annual sales of more than $70 billion, a 45% increase for Pfizer. The deal makes sense in an industry attempting to consolidate to take on the impact of a thinner pipeline of new products and increasing generic competition.

In India, Wyeth is active in antibiotics, steroids, vitamins, vaccines and drugs for the central nervous system and cardiovascular system. For the year ended March 31, 2008, Wyeth Ltd, the Indian arm of the MNC, had sales of Rs 332 crore with a profit after tax of Rs 81 crore. Pfizer India, had a net profit of Rs 340 crore on an income of Rs 1019.76 crore for FY 07. The company will announce its FY08 results this February.

Pfizer has launched five patented products in India after 2005 Vfend, Viagra, Lyrica, Caduet and Macugen. Two of Pfizer India's brands, Corex (cough formulation) and Becosules (multivitamin), continue to rank as the No1 and 2 brands amongst all pharmaceutical drugs produced in India.

Although a buyout of Wyeth will enable Pfizer to enter new segments like antibiotics and women's health in India, some analysts feel the deal will have a minimal impact since Wyeth is selling just a few patented drugs here.

Most MNCs have been reluctant to launch patented products in the Indian market because of slack patent norms in the country.

If one big company makes a move, one can absolutely imagine that triggering off a series of moves..The industry has historically, habitually demonstrated its inability to sit on its hands when someone moves. The question is whether somebody big is going to finally pull the trigger."

Pfizer  must replace more than $12 billion in revenue the company may lose within three years when its Lipitor cholesterol pill, the best-selling medicine in history, faces generic competition. With Wyeth in its fold, Pfizer's earnings may fall as little as 10%, unlike the 23% expected drop when Lipitor loses patent protection in 2011.

IE

A national security index

India  has survived many crises and tackled many challenges over the past 59 years: wars, famines and food shortages, near-bankruptcy on the external account, and the like. Some endemic problems remain, like grinding poverty and poor human development indicators. Another continuing worry, which shows the likelihood of being there for some time to come, is the broad issue of internal security, linked increasingly to the even broader issue of national security (because, for instance, Pakistan has to be part of any internal security calculus). Over the past year, India has suffered many setbacks on this score: there have been the terrorist attacks in a series of cities, culminating with the outrage in Mumbai two months ago. The Maoist challenge has also grown over time, and spread. Uncontrolled illegal immigration from Bangladesh into the border states of West Bengal and Assam certainly poses a security challenge as well as a communal threat. There was also the sudden uprising in the Kashmir valley in the summer, not to mention the question of how good the security detail really is at strategic points like airports. But, of course, the issue goes well beyond these conventional stereotypes.

Global warming is a national security issue—what happens if the sea level rises, or if the melting of Himalayan glaciers dries up some of the country's most important rivers? Energy security is another issue which was driven home this past year, when oil prices at one stage reached $147 per barrel and threatened to derail the economy. Control of strategic industries would be a factor, as would the country's technological capabilities in key areas. When the elements that go into a national security calculus are so varied and complex, how does the country even begin to know whether national security is improving or getting worse? The first step in any managerial challenge is to measure the problem, because only then can anyone track how it is being tackled. This points to the need to construct an annual index with a range of sub-indices, in a manner that carries credibility.

Admittedly, such indices are qualitative and hence a matter of opinion—as is the case with the international rankings that have sprouted on everything from competitiveness to corruption. But measuring the problem is a way of focusing the mind, and that is the first requirement if the country is to get to grips with the issue. For instance, the country is uninformed on the nature of its preparedness, and the quality of equipment, training and manpower in the security forces—until an episode like the one at Mumbai lays the whole thing bare to a shocked public. While some issues will remain secret, as they should, that should not prevent annual reviews. The publication of an annual index incorporating all known elements would lead to discussions, newspaper articles and a general raising of consciousness levels, which would then (hopefully) lead to the required action.

BS

A national security index

India  has survived many crises and tackled many challenges over the past 59 years: wars, famines and food shortages, near-bankruptcy on the external account, and the like. Some endemic problems remain, like grinding poverty and poor human development indicators. Another continuing worry, which shows the likelihood of being there for some time to come, is the broad issue of internal security, linked increasingly to the even broader issue of national security (because, for instance, Pakistan has to be part of any internal security calculus). Over the past year, India has suffered many setbacks on this score: there have been the terrorist attacks in a series of cities, culminating with the outrage in Mumbai two months ago. The Maoist challenge has also grown over time, and spread. Uncontrolled illegal immigration from Bangladesh into the border states of West Bengal and Assam certainly poses a security challenge as well as a communal threat. There was also the sudden uprising in the Kashmir valley in the summer, not to mention the question of how good the security detail really is at strategic points like airports. But, of course, the issue goes well beyond these conventional stereotypes.

Global warming is a national security issue—what happens if the sea level rises, or if the melting of Himalayan glaciers dries up some of the country's most important rivers? Energy security is another issue which was driven home this past year, when oil prices at one stage reached $147 per barrel and threatened to derail the economy. Control of strategic industries would be a factor, as would the country's technological capabilities in key areas. When the elements that go into a national security calculus are so varied and complex, how does the country even begin to know whether national security is improving or getting worse? The first step in any managerial challenge is to measure the problem, because only then can anyone track how it is being tackled. This points to the need to construct an annual index with a range of sub-indices, in a manner that carries credibility.

Admittedly, such indices are qualitative and hence a matter of opinion—as is the case with the international rankings that have sprouted on everything from competitiveness to corruption. But measuring the problem is a way of focusing the mind, and that is the first requirement if the country is to get to grips with the issue. For instance, the country is uninformed on the nature of its preparedness, and the quality of equipment, training and manpower in the security forces—until an episode like the one at Mumbai lays the whole thing bare to a shocked public. While some issues will remain secret, as they should, that should not prevent annual reviews. The publication of an annual index incorporating all known elements would lead to discussions, newspaper articles and a general raising of consciousness levels, which would then (hopefully) lead to the required action.

BS

The road ahead- No where to go???

With the economic slowdown in full throttle, defaults on commercial vehicle loans are on the rise. This will not only hit the fourth quarter results of non-banking finance companies (NBFCs) but also affect their ratings.

To avoid further defaults, NBFCs have tightened their purses — some are even demanding down payment of 35 per cent.

With no sign of the recession ending, and with defaults rising, NBFCs are stuck between a rock and a hard place. But some firms are banking on the rural economy. “There was a bumper crop in tier-III cities and was large enough to carry cargo on state highways,” believes some firms.

Hovione buys Pfizer's Pharma site

Portuguese contract manufacturer Hovione has emerged as the buyer for Pfizer’s production plant in Cork, Ireland, which was put on the block last year. The site manufactures intermediates for atorvastatin.The deal includes a contract for Hovione to carry out manufacturing for Pfizer when it takes over the site. Hovione said it would retain 70-80 of the 230-odd workers at the facility.


Hovione Cork, as it will be known, will manufacture a range of Hovione’s portfolio and over the next 24 months the company will transfer products from its Loures, Portugal site. It will also validate processes for new compounds in expectation of drug approval.


It offers a third pillar to Hovione’s manufacturing network, adding 427 sq. m. to the company’s facilities in Loures and China, with around 400 sq. m. apiece. The plant can handle a large number of specialised chemistries such as hydrogenation and low temperature chemistry, and also boasts a new, €70m spray-dried formulations unit.
The deal is scheduled to be completed by early April 2009.


pharma-outsource.com

Hexion's $6.5B takeover of Huntsman terminated

Chemicals maker Huntsman Corp. has ended its $6.5 billion agreement to be taken over by Hexion Specialty Chemicals Inc. and agreed to a $1 billion legal settlement with Hexion's private equity owner, Apollo Global Management.

Apollo-owned Hexion agreed to buy Salt Lake City-based Huntsman in July 2007 for $6.5 billion but then tried to back out, citing Huntsman's deteriorating finances. The $1 billion settlement includes a $325 million breakup fee to be paid as provided in the merger agreement -- which Hexion expects will be funded by Credit Suisse and Deutsche Bank -- and $425 million cash payments made by certain affiliates of Apollo.

Huntsman also will receive another $250 million in exchange for 10-year convertible notes which can be repaid in cash when they mature or in common stock. Huntsman said it expects to receive at least $500 million before the end of the year, with the rest paid by March 31.

India's Industrial Output Dips For the First Time In 15 Years

Indian industry saw its output shrink for the first time in 15 years with a 0.4 per cent year-on-year decline in October, as the impact of the global economic downturn deepened in the country.
From a dazzling 12.2 per cent growth in October last year, industry recorded a negative growth of 0.4 per cent in October this year, partly due to a dip of over 12 per cent in India's exports.

The fall was bigger than expected and lets hope that the December 7 stimulus package would arrest any further decline though looks unlikely. Industrial output had last fallen in April 1993.

Manufacturing, comprising around 80 per cent of the Index of Industrial Production, (IIP) clocked a negative 1.2 per cent growth in the month from a whopping 13.8 per cent a year ago.
In fact, output in two of the four sectors that make up the index -- intermediate goods and consumer goods -- contracted to 3.7 per cent and 2.3 per cent, respectively, from a growth of 13.9 per cent and 13.7 per cent, respectively. Within consumer durable goods, both segments -- consumer durables and consumer non-durables -- shrank by three per cent and two per cent, respectively.

Of the total 17 industries, captured in the IIP figure, as many as 10 recorded a negative growth and could have a similar bearing on economic growth, given the fact that industry accounts for 29.4 per cent of GDP. Besides manufacturing, mining growth fell by 2.8 per cent, from 5.1 per cent in October, 2007. Electricity, however, proved to be a consolation with growth rate rising to 4.4 per cent from 4.2 per cent.

Of the industry segments, leather and fur products shrunk the maximum by 18.1 per cent, followed by food and wood, furniture and fixtures by 14.4 per cent and cotton textiles by 9.6 per cent. Seven industry which registered a growth, included beverages, tobacco, paper and paper products, printing and publishing, rubber and plastics and basic metals.

For the first seven months of this fiscal, industrial growth rate more than halved to 4.1 per cent from 9.9 per cent in the corresponding period a year ago.

The slowdown follows the impact of global financial crisis which has pushed economies of developed countries like the US, the UK, Euro zones nations and Japan into recession.

In fact, Asian Development Bank has already scaled down India's growth projection to 7 per cent for 2008 from the earlier estimate of 7.4 per cent. For 2009, the economy is likely to grow at 6.5 per cent, ADB said.

Facing the truth by Irfan Husain ( from The Dawn, news paper of pakistan)

Even in my remote bit of paradise, news of distant disasters filters through: above the steady sound of waves breaking on the sandy beach in Sri Lanka, I was informed by several news channels about the sickening attacks on Mumbai. My Internet connection is erratic and slow, but nevertheless, I have been bombarded with emails, asking me for my take on this latest atrocity.

Over the last few years, I have travelled to several countries across four continents. Everywhere I go, I am asked why Pakistan is now the focal point of Islamic extremism and terrorism, and why successive governments have allowed this cancer to fester and grow. As a Pakistani, it is obviously embarrassing to be put on the spot, but I can see why people everywhere are concerned. In virtually every Islamic terrorist plot, whether it is successful or not, there is a Pakistani angle. Often, foreign terrorists have trained at camps in the tribal areas; others have been brainwashed in madressahs; and many more have been radicalised by the poisonous teachings of so-called religious leaders.

Madeline Albright, the ex-US secretary of state, has called Pakistan ‘an international migraine’, saying it was a cause for global concern as it had nuclear weapons, terrorism, religious extremists, corruption, extreme poverty, and was located in a very important part of the world. While none of this makes pleasant reading for a Pakistani, Ms Albright’s summation is hard to refute. Often, the truth is painful, but most Pakistanis refuse to see it. Instead of confronting reality, we are in a permanent state of denial. This ostrich-like posture has made things even worse.

Most Pakistanis, when presented with the fact that our country is now the breeding ground for the most violent ideologies, and the most vicious gangs of thugs who kill in the name of religion, go back in history to explain and justify their presence in our country. They refer to the Afghan war, and the creation of an army of holy warriors to fight the Soviets in Afghanistan. Then they go on to complain that the Americans quit the region soon after the Soviets did, leaving us saddled with the problem of jihadi fighters from all over the Muslim world camped on our soil.

What we conveniently forget is that for most of the last two decades, the army and the ISI used these very jihadis to further their agenda in Kashmir and Afghanistan. This long official link has given various terror groups legitimacy and a domestic base that has now come to haunt us. Another aspect to this problem is the support these extremists enjoy among conservative Pakistani and Arab donors. Claiming they are fighting for Islamic causes, they attract significant amounts from Muslim businessmen here and abroad. And almost certainly, they also benefited from official Saudi largesse until 9/11.

Now that government policy is to distance itself from these jihadis, we find that many retired army officers have continued to train them in camps being run in many parts of Pakistan. A few weeks ago, Sheikh Rashid Ahmed, a prominent (and very loud) minister under both Nawaz Sharif and Musharraf, openly boasted on TV of running a camp for Kashmiri fighters on his own land just outside Rawalpindi a few years ago. If such camps can be set up a few miles from army headquarters, what’s to stop them from operating in remote areas?

Many foreign and local journalists have exposed aspects of the terror network that has long flourished in Pakistan. Names, dates and addresses have been published and broadcast. But each allegation has been met with a brazen denial from every level of officialdom. Just as we denied the existence of our nuclear weapons programme for years, so too do we refuse to accept the presence of extremist terrorists.

For years, it suited the army and the ISI to secretly harbour and support these groups in Pakistan, Kashmir and Afghanistan. While officially denying that they had anything to do with these jihadis, money and arms from secret sources would reach them regularly. Despite our spooks maintaining plausible deniability, enough information about this covert support for jihadis has emerged for the fig-leaf to slip. And even if the intelligence community has now cut its links with these terrorists, the genie is out of the bottle.

Each time an atrocity like Mumbai occurs, and Pakistan is accused of being involved, the defensive mantra chanted by the chorus of official spokesmen is: “Show us the proof.” The reality is that in terrorist operations planned in secret, there is not much of a paper trail left behind. Nine times out of ten, the perpetrators do not survive to give evidence before a court. But in this case, one terrorist did survive, and Ajmal Amir Kamal’s story points to Lashkar-e-Tayyaba. The sophistication of the attack is testimony to careful planning and rigorous training.
This was no hit-and-run operation, but was intended to cause the maximum loss of life.

Pakistan’s foreign minister said that Pakistan, too, is a victim of terrorism. While this is certainly true, the rest of the world wants to know whey we aren’t doing more to root out the training camps, and lock up those involved. Given the vast un-audited amounts from the exchequer sundry intelligence agencies lay claim to, their failure to be more effective against internal terrorism is either a sign of incompetence, or of criminal collusion. Benazir Bhutto’s murder, after an earlier attempt and many warnings, is a reminder of how poorly we are served by our intelligence agencies.
And while the diplomatic fallout from the Mumbai attack spreads and threatens to escalate into an armed confrontation, the biggest winners are those who carried out the butchery of so many innocent people. It is to their advantage to prevent India and Pakistan from coordinating their fight against terrorism. Tension between the two neighbours suits them, while peace and cooperation threatens their very existence.

The world is naturally concerned about the danger posed by these terror groups to other countries. However, the biggest threat they pose is to Pakistan itself. Until Pakistanis grasp this brutal reality and muster up the resolve necessary to crush them, these killers will tear the country apart.

( I wish all the responsible citizens of pakstan understand this, they should come out openly to stop the designs of ISI and Army which is affecting not only others but their own life, If not then pakistan is not a failed state but for the young citizens it might be non existent Pakistan ( a self destruction)



the link of the article:

http://dawn.net/wps/wcm/connect/Dawn%20Content%20Library/dawn/the-paper/columnists/facing+the+truth

How many more?????????- Terror in India

A terrorist attack every month through 2008. The scale gets bigger, and bolder. The response from the security agencies so far..??????. The country needs to see much more being done. A demand of an anti-terror law was pushed to a corner under the pretext that laws have been misused. A home minister who has been in a state of denial all these years has now found his government announcing yesterday the creation of a federal investigation agency.

LeT, whose cadres are known to be funded and trained by the Pakistan army's ISI are found to be involved once again , it means that India should not harbour any illusions about Pakistan's intentions. The induction of a civilian government in Pakistan has changed nothing. India must act with this knowledge, and put the maximum international pressure to make Pakistan pay the price for its misadventures.

Will Indian politician will rise to this occasion or its business usual. ( I hope all of them are not carrying the several sets of prepared speech in their pocket and waiting for the next round of such tragic terror to happen. If it happens then they are ready to deliver the instantaneous speech to address the nation with their crocodile tears. ( Politicians should be the best Actors. AB, SRK et al, Are you all wondering why it is not happening so far?????)

So far its clear, winning of the trust vote by Mr. Singh in the parliaments seems to be mandate for militants/ terrorists winning the trust & confidence of striking any where with in India with out any obstacle and fear. ( If you follow the stats)

Energy CTL Technology - Tough Choice

Companies are sparring for the maiden coal to liquids (CTL) project, which is expected to produce 80,000 barrels of oil a day . As the government is zeroing in on a private player who would offer the best technology, the Tatas have written to the government about “technology risks” associated with the technology adopted by Mukesh Ambani’s Reliance Industries (RIL).

RIL has technological partnership with US-based Headwaters Energy services, while Tatas have a tie up with Sasol, the South African company that pioneered the CTL concept way back in 1955.

While Headwaters uses its proprietary direct coal liquefaction process, Sasol adopts the indirect coal liquefaction method using the ‘Fischer-Tropsch’ process. In the former approach, the coal is dissolved in a solvent at high temperature and pressure, the latter gasifies the coal and then condenses it to form petroleum products. Nothing is clear though about which is the best and proven method.

CTL technology is still not proven on a large scale, but there is vigorous R&D going on globally in this area. India is considering using Headwaters’ technology, but Sasol seems to have an edge after Tatas mentioned in their letter that China has recently pulled out of a deal with Headwaters.

BW

Euro economy to barely grow in 2009

The European Commission said the region's economy probably entered a recession this year and will stagnate in 2009.Economic growth in the euro area will slump to 0.1 percent next year, the worst performance since 1993, It also estimated that gross domestic product will shrink for three consecutive quarters this year and cut its forecast for full-year 2008 growth to 1.2 percent from 1.3 percent previously. Manufacturing contracted at a record pace in October and faster than initially estimated.

In addition to flooding markets with cash, central banks across the world have also begun slashing interest rates to limit the economic impact of the financial crisis. The European Central Bank is set to cut its benchmark rate this week for the second time in less than a month after the U.S. Federal Reserve lowered its rate to match the lowest level in a half-century. Policy makers in Japan, India and Norway have also cut borrowing costs.

The Irish, Spanish and U.K. economies will all contract next year, while Germany, Europe's largest economy, France and Italy will stagnate. For 2010, the EU sees the overall euro-area economy expanding by 0.9 percent.

Tough time awaits for Indian INC - debt burden

Indian companies have to redeem around $44.57 billion of overseas debt between now and December 2009 in an economic environment where money has become scarce and costly. This debt funded for their domestic expansion and overseas acquisitions.


This is a pretty big issue, as the cost of borrowing could remain high for some time to come.To be sure, some of the companies, such as Hindustan Zinc, say they have repaid their loans ahead of schedule.Most companies, however, usually pay their debts only when they are due or, if the foreign currency is appreciating, replace foreign debt with local borrowings. This means Indian firms will find it difficult to roll over their old debt and raise new debt. This will affect their expansion plans as bankers do not expect the scenario to change anytime soon. Apart from the cost of borrowings, Indian firms also need to take forward cover for their overseas loans to hedge the currency fluctuation risk when they pay back their loans by buying dollars from the market. The local currency has lost at least 20% against the greenback this year.


When the Libor rose sharply—reflecting the rise in credit risk in London—the rates at which the Indian firms had borrowed went up. Beyond the rise in debt servicing, Indian firms and banks also saw the cost of rolling over their maturity debt rise sharply as the money market in London dried up. As the costs of rolling over debt rose sharply, Indian firms borrowing in London found themselves structurally short of dollars. They responded by borrowing in the Indian short-term money market, converting the funds into dollars, using the proceeds to meet external debt obligations.

Indian Pharma - Clouds on ...

Indian Pharmaceutical industry has been one of the high performing sectors of the Indian economy for the last some years mainly on account of its export oriented growth. Top companies like Ranbaxy, Dr. Reddy's, Cipla, Lupin, Sun Pharma, etc. have been exporting more than 50 per cent of their production to the developed countries for years with attractive margins despite competition from other generic players. Several medium and small scale pharma companies had also jumped to the export bandwagon later. A study of 75 listed Indian pharmaceutical companies during 2006-07 reported a 44.5 per cent growth in net profits and a 23.5 per cent growth in sales during 2006-07. Such excellent performance was possible for this industry because of the export oriented growth by way of acquisitions and marketing alliances in the overseas markets.

However, the generic competition in the US and European markets appeared to be growing tough for Indian exporters since last two years with a sudden drop in margins. In 2007-2008, the generic competition in the world markets has actually started hitting the Indian companies with a sharp fall in their profitability. The worst blow came when the US FDA took action against Ranbaxy, the largest Indian pharmaceutical company, for not maintaining quality norms in its two approved manufacturing facilities in India. The US FDA has imposed a ban on the import of 31 drugs of Ranbaxy in mid September. After the US action, regulatory authorities in Canada, UK and New Zealand are also contemplating stringent regulatory auditing of Ranbaxy's products.

The US action against Ranbaxy and the current financial crisis faced by the US economy are now seriously threatening the export led growth of the Indian pharmaceutical industry. India's exports of pharmaceutical products to the US account for almost 50 per cent of its total exports. With the US government putting pressure on FDA over imports of pharmaceuticals from India and China, inspections by the US FDA are going to be quite rigorous in the approved facilities of Indian companies in the months to come. There are nearly 100 US FDA approved manufacturing facilities of different companies in India at present. In the global pharmaceutical market, US FDA is held in high esteem and most countries depend largely on information from US FDA and European Medicine Evaluation Agency (EMEA) before registering or banning any medicinal products.

All the Gulf countries have US experts in their health ministries to advise them on drug imports. Now, the changed perception of India in the wake of Ranbaxy episode can tighten the regulatory watch on all Indian pharmaceutical products by the advanced countries. Large companies will take abundant caution in their manufacturing standards and practices now onwards even at extra costs. But, a good number of medium and small scale exporters are bound to falter and may lose business in coming days of extreme caution in importing Indian pharmaceuticals. Indian industry has to, therefore, rework its growth strategies in the wake of these new realities in the market place.

Pharmabiz

Uncle Sam's effect's

Even as the US economy grapples with a financial crisis, the developing Asian economies continue to be watched with growing apprehension. Last week, the Asian Development Bank (ADB) downscaled the growth expectations of many Asian economies — including India’s — in its half-yearly report, Asian Development Outlook 2008.

ADB attributes this to the worsening conditions in major industrial economies. “The myth of uncoupling has been exploded,” the report says. Among the other factors are the slowdown in Asia due to inflation; high borrowing costs; dampening investment and low consumer spending.

India’s gross domestic product (GDP) growth estimate for the current financial year (FY08-09) has been downgraded from 8 per cent to 7.4 per cent, and, for the next financial year (FY09-10), from 8.5 per cent to 7 per cent. ADB bluntly states that “Very large fiscal imbalance created by the current level of subsidisation of oil, fertiliser and food, as well as other off-budget items, sets a daunting task for economic management.”

Last month, a Citigroup research note had also revised its own estimates of India’s GDP from 7.7 per cent to 7.5 per cent for FY08-09 and from 7.9 per cent to 7.4 per cent for FY09-10.

Local economists, however, are not as pessimistic. “An 8 per cent GDP growth is possible thanks to growth in consumption (which will get a boost from the Sixth Pay Commission recommendations) as well as services and capital goods,

The debate continues.

Ranbaxy expresses disappointment over US FDA action

In response to the US Food and Drug Administration (US FDA)'s warning letters and import alert for drugs issued to Ranbaxy Laboratories Ltd regarding drug products produced in two Ranbaxy plants at Dewas and Paonta Sahib in India, the company said that it is very disappointed by the action taken by the US FDA.


In a press release, it said, "Ranbaxy is very disappointed in the action FDA has taken. The company has responded to each concern FDA has raised during the past two years and had thought that progress was being made. We are, however, pleased that FDA's testing and review led the agency to conclude that there is no reason to question the safety or effectiveness of Ranbaxy's drugs. The company has just received the warning letters that FDA has issued and has not had the opportunity to review those concerns that FDA has determined are unresolved. Once it has had an opportunity to review the issues, the company looks forward to continuing to cooperate with FDA to resolve the remaining issues."


According to the FDA announcement, the warning letters and import alert do not apply to Ranbaxy's other facilities including its three manufacturing facilities in the US, Ohm's Laboratories facilities in New Brunswick, North Brunswick, New Jersey, and Gloversville, New York, from which Ranbaxy delivers some 59 drug products to the US healthcare system, including: Simvastatin, Acyclovir, Minocycline, Clindamycin, Lorazepam, Loratadine-D, Cetirizine, Acetaminophen Extended release tablets, Lisinopril and Zolpidem.

Pharmabiz