India is emerging as a key hub for pharmaceutical manufacturing. Backed by government policies, the country's pharmaceutical market has registered a compound annual growth rate (CAGR) of 12 percent between 2007 and 2011. Such positive trends are set to continue, unleashing a flood of opportunities for the Indian water and wastewater treatment market for pharmaceutical industries.
New analysis from Frost & Sullivan (http://www.environmental.frost.com), Water and Wastewater Treatment Market for the Pharmaceutical Industry in India
, finds that the market earned revenues of INR 5.08 billion in 2011 and estimates this to reach INR 9.47 billion in 2016, growing at a higher CAGR of 13.3 percent.
"Currently, India’s pharmaceutical industry is the third largest in the world in terms of volume and the fourteenth largest in terms of value," noted Frost & Sullivan Research Analyst. "As both international and domestic demand for pharmaceuticals soars, India’s pharmaceutical industry is poised to expand rapidly, fuelling the need for additional water and wastewater treatment equipment.” Manufacturing of medicines require high-purity water in the production process and the wastewater stream can be heavily laden with toxins, contaminants and organic nutrients which needs to be treated before disposal, requiring water and wastewater treatment equipment.
Government support for India's pharmaceutical sector will be accompanied by stricter governance on water and wastewater usage. For the past ten years, the Government of India (GoI) has adopted various means to strengthen the pharmaceutical market. The GoI has allowed 100 percent FDI (foreign direct investment) in the drugs and pharmaceuticals sector. Various SEZs (special economic zones) have been established all over the country; Gujarat is the forerunner in this regard.
"Central Pollution Control Board (CPCB) and State Pollution Control Board (SPCB) norms are set to become more stringent, with all new industries, such as power and pharmaceuticals, now required to install water recycle/reuse systems," said the Analyst. “In tune with government efforts to promote environmentally-friendly, good manufacturing practices, pharmaceutical industries have already started implementing zero liquid discharge (ZLD) systems.”
On an average Tier I pharma companies in India use around 2 million litres of water daily. Presently very few pharma companies are following globally accepted best practices in India. With large amount of wastewater being generated from pharma companies, government may turn up strict regulations further which will put an additional burden to the pharma companies. Pharma companies should utilize latest water and wastewater treatment technologies to sustain the highly competitive pharma market in the future with global pharma companies showing interest in the business in the Indian region.
The water and wastewater treatment services market is thus moving from solely cost considerations to a broader focus that highlights eco-friendly, energy-efficient, and sustainable practices. On the competitive front, there has been a distinct shift towards the organized sector. As price margins of organized competitors fall due to the lower prices offered by the unorganized sector, companies are favoring mergers and acquisitions or strategic alliances with other companies, including international firms. “This will eventually pressure companies in the unorganized sector to either form partnerships or lose market share,” concluded the Analyst. “Such activities will lead to the market becoming more formalized and organized.”
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