Chemical Pharma

Human Resource and Skill Requirements for the
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Human Resource and Skill Requirements of the Chemicals and Pharmaceuticals Sector
Studyonmappingofhumanresourceskillgapsin Indiatill2022
Table of Contents
1. Environment Scanning and Competitiveness of Chemicals & Pharmaceuticals Sector ........ 5 1.1. 1.2. 1.3. 2. Overview ................................................................................................................................. 5 Chemicals ................................................................................................................................ 5 Pharmaceuticals .................................................................................................................... 19
Human Resource and Skill Requirements in the Chemicals and Pharmaceuticals Sector .. 34 2.1. 2.2. 2.3. 2.4. 2.5. 2.6. Current Employment in the Chemicals and Pharmaceuticals Sector .................................... 34 Skill Requirements and Skill Gaps in the Chemicals Segment ............................................. 38 Skill Requirements and Skill Gaps in the Pharmaceuticals Segment ................................... 45 Projected Industry Size and Human Resource Requirements ............................................... 53 Skill Pyramid ........................................................................................................................ 55 Focus Areas for Skill Building.............................................................................................. 56
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List of Figures
Figure 1: Composition of Petrochemical industry .................................................................................. 6 Figure 2: Composition of Chloro Alkali industry ................................................................................... 8 Figure 3: Composition of Inorganic industry .......................................................................................... 9 Figure 4: Share of nutrients of total fertiliser consumption .................................................................. 10 Figure 5: Composition of Dye & Dyestuff industry ............................................................................. 11 Figure 6: IIP for chemicals ................................................................................................................... 12 Figure 7: Value chain of the Chemical Industry ................................................................................... 13 Figure 8: Methanol usage in various sectors ......................................................................................... 14 Figure 9: Share of different states in production of chemicals* ........................................................... 15 Figure 10: Share of different regions in Fertiliser production .............................................................. 15 Figure 11: World pharmaceutical sales ................................................................................................. 19 Figure 12: PFCE on medical care & health services (Rs crore) .......................................................... 20 Figure 13: Pharmaceutical Exports (Rs. crore) ..................................................................................... 21 Figure 14: Share in exports ................................................................................................................... 21 Figure 15: Pharmaceutical imports (Rs. Crore) .................................................................................... 22 Figure 16: Pharmaceutical imports by countries................................................................................... 22 Figure 17: Value Chain of Pharmaceuticals ......................................................................................... 23 Figure 18: Share of various therapeutic segments ................................................................................ 26 Figure 19: Drivers of competitiveness of the Pharmaceutical industry ................................................ 33 Figure 20: State-wise share in employment in the Chemicals Segment .............................................. 35 Figure 21: Profile of people employed in the Chemicals Segment ....................................................... 38 Figure 22: Profile of people employed in the Pharmaceuticals Segment ............................................. 45 Figure 23: Skill Pyramid for the Chemicals and Pharmaceuticals Industry ......................................... 55
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List of Tables
Table 1: Trends in Petrochemical production, capacity, imports & exports (000 MT) ......................... 6 Table 2: Trends in Organic chemical production, capacity, imports & exports (000 Metric Tonnes (MT)) ...................................................................................................................................................... 7 Table 3: Production of major organic chemicals (000 MT) .................................................................. 7 Table 4: Trends in alkali chemical production, capacity, imports & exports (000 MT) ....................... 8 Table 5: Trends in inorganic chemical production, capacity, imports & exports (000 MT) ................. 9 Table 6: Trends in pesticide production, capacity, imports & exports (000 MT) ............................... 10 Table 7: Trends in fertiliser production, capacity, imports & consumption (000 MT) ....................... 11 Table 8: Trends in Dye & Dyestuff production, capacity, imports & exports (000 MT) .................... 12 Table 9: Key Players in the chemical industry* ................................................................................... 16 Table 10: End use sectors ..................................................................................................................... 16 Table 11: Key Players ........................................................................................................................... 28 Table 12: Current employment in Chemical Industries ........................................................................ 34 Table 13: Functional distribution of human resources in the Chemicals Segment ............................... 35 Table 14: Functional distribution of human resources in the Pharmaceuticals Segment ...................... 36 Table 15: Educational qualifications of personnel employed in the Chemicals and Pharmaceuticals Segment ................................................................................................................................................ 37 Table 16: Skill requirements and skill gaps in the Chemicals Segment ............................................... 38 Table 17: Skill requirements and skill gaps in the Pharmaceuticals Segment ...................................... 46 Table 18: Projected Industry Size ......................................................................................................... 53 Table 19: Human Resource Requirement for the Chemicals and Pharmaceuticals Industry (in 000s)53 Table 20: Incremental human resource requirement function-wise (in 000s) for the Chemicals and Petrochemicals sector............................................................................................................................ 54 Table 20: Incremental human resource requirement function-wise (in 000s) for the Pharmaceuticals sector ..................................................................................................................................................... 54 Table 22: Incremental human resource requirement education-wise Chemicals, Petrochemicals, and Pharmaceuticals sector ................................................................................................................... 55 Table 23: Focus areas for skill building in Chemicals and Pharmaceuticals ........................................ 56
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1. Environment Scanning and Competitiveness of Chemicals & Pharmaceuticals Sector

1.1. Overview
India manufactures more than 70,000 chemicals and is the 12th largest producer of chemicals in the world. The size of Indias Chemical industry estimated to be around Rs. 1,60,000 crore ($35 billion)1. The chemicals industry constitutes about 3% of GDP and 17.6% of manufacturing sector. India share of the global market -1.9% of global sales and 1.5% of international trade. The Indian pharmaceutical industry is one of the worlds largest and most developed, ranking fourth in volume terms and thirteenth in value terms. The Indian domestic pharmaceutical market size is estimated at Rs. 43,300 crore in 2008.The country accounts for an estimated 8% of global production and 2% of world markets in pharmaceuticals
1.2. Chemicals
1.2.1. Industry size and Growth
The major sub sectors of chemical industry are: Petrochemicals Organic chemicals Alkali Chemicals Inorganic Chemicals Pesticides Fertilisers Dye and Dyestuff
Petrochemicals Petrochemicals are chemical products made from raw materials of petroleum (hydrocarbon) origin. The distillation of crude oil yields naphtha, gas oil, natural gas (NG), and petroleum gases which are mainly used as feedstock by the petrochemicals industry. The cracking (process whereby complex organic molecules are converted to simpler molecules) of naphtha/NG yields six major petrochemicals. These are olefins such as ethylene, propylene, and butadiene; and aromatics such as benzene, toluene, and xylene. While NG-based crackers invariably produce light olefins (mainly
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ethylene), naphtha-based crackers have a higher share of propylene and aromatics (benzene and xylenes). Indias petrochemicals production facility presently is categorised into five groups as in the figure below. Polymers are the largest segment of the Indian petrochemicals industry, accounting for around 64% of Indias aggregate production of major petrochemicals, followed by synthetic fibres (26%). Figure 1: Composition of Petrochemical industry
Surfactants 7% Elastomers 1% Performance Plastics 1% Synthetic Fibres 28%
Polymers 63% Source: Ministry of Chemicals & Fertilisers, IMaCS Analysis
Table 1: Trends in Petrochemical production, capacity, imports & exports (000 MT)
2002 7,017 6,235 88.9 689 702 6,222
2003 7,110 6,554 92.2 713 972 6,295
2004 7,323 7,006 95.7 818 1,037 6,787
2005 7,798 7,349 94.2 859 1,270 6,938
2006 7,984 7,467 93.5 1,167 1,005 7,629
2007 9,336 8,223 88.1 1,225 1,346 8,102
Capacity Production Capacity Utilisation (%) Imports Exports Consumption
Source: Ministry of Chemicals & Fertilisers, IMaCS Analysis
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Organic Chemicals Organic chemicals are a group of petroleum-derivative chemicals used as intermediates to produce other chemicals, which, in turn, are used to manufacture a wide variety of end-use products, including construction materials, apparel, adhesives, plastics, and tyres. The majority of the organic chemicals are derived from benzene, a petroleum derivative. The key organic chemicals are acetic acid, methanol, formaldehyde, acetaldehyde, chloromethane, phenol, benzene and its derivatives (that include nitrobenzene, aniline, ortho nitro chlorobenzene (ONCB), para nitro chloro-benzene (PNCB). Indias organic chemicals production was estimated at around 1,736 kilo tonnes (kt) during 20072008. Imports accounted for 36% of the total domestic consumption in 2007 up from 29% in 2002. Table 2: Trends in Organic chemical production, capacity, imports & exports (000 Metric Tonnes (MT))
2002 1,281 1,167 91.1 477 17 1,627
2003 1,403 1,353 96.4 399 57 1,695
2004 1,601 1,474 92.1 598 46 2,026
2005 1,669 1,506 90.2 568 63 2,011
2006 1,812 1,545 85.3 663 53 2,155
2007 1,889 1,545 81.5 867 62 2,350
Capacity Production Capacity Utilization (%) Imports Exports Consumption
Table 3: Production of major organic chemicals (000 MT) 2003 Methanol Acetic Acid Formaldehyde Acetaldehyde Chloromethane 362 252 182 126 79 2004 389 308 199 127 90 2005 392 288 196 140 92 2006 387 306 249 159 94 2007 396 288 235 164 92 2008 377 373 274 208 99
Alkali Chemicals The Chloro Alkali industry consists of Soda Ash, Caustic soda and liquid chlorine. Caustic soda, finds use in various applications, such as, finishing operations in textiles, manufacture of soaps and detergents, control of pH (softening) of water for various applications and general cleansing or
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bleaching applications. Glass manufacturing is the largest application for soda ash. Liquid chlorine is used primarily for various bleaching applications, across paper and pulp, textiles and other industries. Figure 2: Composition of Chloro Alkali industry
Caustic Soda 36%
Soda Ash 40%
Liquid Chlorine 24% Source: Ministry of Chemicals & Fertilisers, IMaCS Analysis
The total production of the sector stood at 52,69,000 MT in 2007.The sector had a CAGR of 3.9% between 2002-2007.Imports accounted for 7% of the total domestic consumption. Table 4: Trends in alkali chemical production, capacity, imports & exports (000 MT)
2002 6,057 4,342 71.7 203 107 4,438
2003 6,256 4,792 76.6 220 239 4,773
2004 6,393 5,070 79.3 201 217 5,054
2005 6,422 5,272 82.1 239 359 5,165
2006 6,603 5,475 82.9 711 230 5,956
2007 7,072 5,269 74.5 409 179 5,499
Inorganic chemicals The key organic chemicals are titanium dioxide, carbon black, and calcium carbide. Other inorganic chemicals include aluminium fluoride, potassium chlorate, red phosphorous, and sodium chlorate. The industry caters to a host of end user industries such as paints and dyestuff, tyres, leather, paper, detergent, explosives, rubber chemicals, cigarette, etc.
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Figure 3: Composition of Inorganic industry

Others 4% Titanium Dioxide 11% Calcium carbide 15% Carbon Black 70%
Indias Inorganic chemicals production was estimated at around 6,02,000 MT in 2006-07.India has turned into a net exporter in 2007.Exports of inorganic chemicals have increased from 40,439 tonnes in FY2002 to 1, 01, 000 tonnes in 2007. Carbon black dominates exports with a share of 59%. Table 5: Trends in inorganic chemical production, capacity, imports & exports (000 MT)
2002 487 374 76.8 53 40 387
2003 487 404 83 99 34 469
2004 568 441 77.6 116 64 493
2005 642 508 79.1 99 153 454
2006 742 544 73.3 131 121 554
2007 749 602 80.4 29 101 630
Pesticides With expanding agricultural production supported by good monsoons, improvement in technology and growing awareness among farmers, the consumption of agrochemicals has been on the upswing. The agrochemicals industry is made up of insecticides (74%), herbicides (20%) and fungicides (6%). Cotton, paddy or rice, vegetables and fruits account for over 80% of the pesticide consumption in the country. While cotton is planted on about 4.5-5% of the total cultivable area (on about 9.3-9.6 million hectares or mha), it accounts for about 33% of pesticide consumption in India, followed by rice (23%), vegetables (9%), wheat (8%), and pulses (6%).
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India is one among the most dynamic generic pesticides manufacturing countries with a total market size of Rs 8,900 crore per annum. And yet, Indias own average consumption of pesticides is very low at 480 gm per hectare which results in crops worth about Rs 12,000 crore being destroyed annually by pests. Table 6: Trends in pesticide production, capacity, imports & exports (000 MT)
2002 138 82 59 1 13 70
2003 139 70 50 1 26 45
2004 134 85 63 3 26 62
2005 146 94 64 3 27 70
2006 148 82 55 3 27 58
2007 145 85 58 3 33 55
Fertilisers The Indian chemical fertiliser (hereafter referred to only as fertilisers) industry mainly concerns itself with providing the three primary nutrientsN, P, and Kto the agricultural sector. While nitrogen is expressed in the elemental form (N), phosphorous and potassium are expressed as their oxide forms, viz. phosphate (P2O5) and potash (K2O). Besides, being used as fertilisers themselves, these three nutrients are combined to produce several complex fertilisers. Figure 4: Share of nutrients of total fertiliser consumption
Potassium 12%
Phosphorous 24% Nitrogen 64%
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The fertiliser consumption was 22,57,000 MT in 2008. The fertiliser consumption has been growing at a CAGR of 7.7 % for the period from 2004 to 2008. The share of imports of total consumption of fertilisers was 34% in 2008. Table 7: Trends in fertiliser production, capacity, imports & consumption (000 MT)
2004 17,568 14,183 2,130 16,799
2005 17,688 15,343 2,779 18,398
2006 17,748 15,536 5,300 20,340
2007 18,020 15,965 6,153 21,651
2008 18,143 14,617 7,767 22,570
Total Capacity Production Imports Consumption
Source: Ministry of Chemicals & Fertilisers, Fertiliser Association of India, IMaCS Analysis
Urea is the most widely consumed fertiliser in the country, accounting for around 83% of total N consumption, and 53% of the total fertiliser consumption. The share of urea in total fertiliser consumption averaged 52% during FY2004-08. Other major fertilisers consumed include Diammonium phosphate (21% of total consumption in 2008), and Muriate of potash or MOP (66% of consumption and 8% of total fertiliser consumption).
Dyes and Dyestuffs The consumption of Dyes and Dyestuffs is closely related to the performance of the textile industry. The Dye & Dyestuff industry has grown at a CAGR of 5.7 % from 2002 to 2007. Organic pigment colours account for the largest share of dye industry followed by sulphur dyes and Azo dyes. Figure 5: Composition of Dye & Dyestuff industry
Others 21%
Azo Dyes 11%
Organic Pigment Colours 50%
Sulphur Dyes/Sulphur Black 18% Source: Ministry of Chemicals & Fertilisers, IMaCS Analysis
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Human R Resource and Skill Requirem ments of the C Chemicals and Pharmaceuti d icals Sector
Table 8: Tren in Dye & Dyestuff production, capacity, imp T nds c ports & expo (000 MT orts T)
2002 49 25 51 9
2003 49 26 53.1 11
2004 54 26 48.1 14
2005 54 28 51.9 17
2 2006 52 30 57.7 27
20 007 53 5 33 3 62 2.3 31 3
Capa acity Prod duction Capa acity Utilisat tion (%) Impo orts
Source: M Ministry of Che emicals & Fer rtilisers, IMaC Analysis CS
Trends in Index of Industrial P Production Figure 6: IIP for ch hemicals

400 4 IIP Gr rowth (yoy) 25% 20% 350 3 15% 10% 5% 250 2 0% -5% -10% 150 Jan/05 Mar/05 May/05 M /05 Jul/05 Sep/05 Nov/05 Jan/06 Mar/06 May/06 Jul/06 Sep/06 Nov/06 Jan/07 Mar/07 May/07 Jul/07 Sep/07 Nov/07 Jan/08 Mar/08 May/08 Jul/08 Sep/08 Nov/08 Jan/09 Source: CSO, IMaCS Analysis S -15%
300 3
200 2
The IIP for chemicals and chemi products in India has shown an i ical s s impressive gr rowth over the years. t f production (I IIP) for basi chemicals increased 1 ic 10.6% in 200 07-08, as Overall the index of industrial p ed % 7, % 05-06. The II for basic chemicals increased IP i compare with 9.6% in 2006-07 and 8.3% during 200 2.4% (Y Y-O-Y) durin 2008-09. However, th IIP has de ng he eclined since October 2008 primarily because y of a slow wdown in pro oduction of m major chemicals.
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Figure 9: Share of different states in production of chemicals*

Others 12%
Andhra Pradesh 4% Madhya Pradesh 4% Rajasthan 4% Punjab 4% Tamil Nadu 6%
Gujarat 51%
Uttar Pradesh 8% Maharashtra 7% *Excluding Fertilisers and pharmaceuticals Source: Ministry of Chemicals & Fertilisers, IMaCS Analysis
Figure 10: Share of different regions in Fertiliser production

East 6%
West 47%
North 33%
South 14% Source: Ministry of Chemicals & Fertilisers, IMaCS Analysis
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Table 9: Key Players in the chemical industry* Company Reliance Industries Limited (RIL) Gas Authority of India Limited (GAIL) Haldia Petrochemicals Limited Tata Chemicals Ciba Rallis Hindustan Organic Chemicals (HOCL) Gujarat Narmada Valley Fertilisers Corporation Products Oil & gas exploration, refining, polymers, polyesters. Petrochemicals Petrochemicals Alkali chemicals, fertilisers. Textile dyes, additives, pigments and polymers. Pesticides, Fertilisers Organic Chemicals Fertilisers, Organic chemicals * Indicative and not exhaustive
1.2.4. Demand Drivers

Growth in End use sectors Chemicals are used across various industries as intermediates. The major end user sectors of the chemical products are depicted in the following table. The overall growth in Manufacturing and Agriculture sector of the economy is the key demand driver for the chemical products. Table 10: End use sectors Chemical Petrochemicals Organic chemicals Alkali Chemicals Inorganic Chemicals Pesticides Fertilisers Dye and Dyestuff End Use Sector Plastic products and manmade fibre (MMF) based textiles Construction materials, apparel, adhesives, plastics, and tyres Soaps & Detergents, Textile, Paper & Pulp, Glass Construction, automobiles, white goods, capital goods and heavy industries Agriculture Agriculture Textiles
respective industry reports.
Note: The demand drivers for textiles & apparels, automobiles, construction are covered in detail under the
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Low per capita consumption of chemicals Petrochemicals: The low per capita consumption of polymers in India, presently at around 6 kg per capita per annum, indicates a potential for further strong demand growth in the future. The growth in per capita incomes in the country) would also lead to a rise in polymer consumption. Organic Chemicals: There is a significant scope for growth in the long term with the per capita chemicals consumption being only 5 kg per annum, much lower than the comparable figures in the developed markets.
1.2.5. Policy and Regulatory environment

Corporate Responsibility for Environmental Protection: The Ministry of Environment & Forest (MoEF) has launched the Charter on "Corporate Responsibility for Environmental Protection (CREP)" in March 2003 with the purpose to go beyond the compliance of regulatory norms for prevention & control of pollution through various measures including waste minimization, in-plant process control & adoption of clean technologies. Petrochemical Technology Upgradation Fund (PTUF) and a Plastic Development Council (PDC): The fund will provide subsidised loans for the polymer processors and the textiles industry. The PDC will be part of a drive to develop plastic export parks that will cluster around future petrochemical zones Petroleum, Chemicals, and Petrochemical Investment Regions (PCPIR): PCPIRs primarily aim to increase upstream and downstream investment by creating world-class infrastructure, increasing domestic demand and per capita consumption of polymers and plastics, adding value to the domestic plastics processing industry through modernisation and R&D, and achieving environmentally sustainable growth. Three sites have been selected to become PCPIRsDahej in Gujarat; Haldia in West Bengal; and Vishakhapatnam in Andhra Pradesh. FDI: 100% FDI under the automatic route is allowed for all chemical items except hazardous chemicals where government and FIPB approval and license to manufacture are required.
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1.2.6. Key Success factors

Co-Marketing alliances: In order to increase market penetration and increase their presence in select segments, companies need to enter into product specific marketing arrangements. This would benefit the Indian companies due to synergy between the quality of products and marketing strengths of MNCs who hold registrations for a number of products in different countries. Industry could consider alliances with Middle- East countries, which have an enormous feed stock advantage. Scaling up: Consolidation is required to increase competitiveness especially for scale of manufacturing, logistics, marketing, R&D and raising finances. It is necessary to move towards consolidation to have access to large plants and cheaper raw materials. In the area of specialty chemicals, through consolidation the industry can gain knowledge of specific chemistry and build relationship with key customers. Adopt globally acceptable accreditations: Adopt international best practices and accreditations will help in brand building as well as improve international efficiencies.
1.2.7. Key Risk factors

Crude oil prices: Persistent high crude oil prices remain a source of concern for the industry as it is the key source of raw materials and also affects the prices of substitutes such as natural gas. High crude oil prices are pushing up naphtha prices, which could cause petrochemicals prices to increase, and cause slow demand for downstream petrochemical products. Availability of Natural Gas: India also faces a deficit in the supply of NG, which is an efficient source for the production of light olefins. Given the present supply deficit, for the foreseeable future, the petrochemical sector is expected to remain lower in priority for allocation of NG. Threat of Imports: The petrochemical sector in Asia is undergoing fundamental change due to three key forces. The first is the massive expansion of Asian petrochemicals currently under way. The second is the rapid emergence of China as the largest petrochemical producer in Asia. The third is the sharp rise in production capacity in the Middle-East. Imports as a percentage of total consumption for certain chemicals, especially Organic chemicals, are significantly high (36% in 2007). Continued reduction in import duty tariffs has resulted in proliferation of imports and has affected the pricing power of domestic manufacturers.
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1.3. Pharmaceuticals
1.3.1. Global pharmaceutical Industry
The global pharmaceutical market reached US$712 billion in 2007, up 6.4% from the previous year sales of US$649 billion. The global pharmaceutical market is expected to grow 4.5-5.5% in 2009, a rate similar to forecast growth of 5% in 2008. The global pharmaceutical sales to estimated to surpass US$820 billion in 20092, reflecting sustained double-digit growth in key emerging countries tempered by a slower pace in more established markets. Figure 11: World pharmaceutical sales
800 700 605 600 500 400 300 200 1999 2000 2001 2002 2003 2004 2005 2006 2007 365 392 499 428 560 US$ billion Growth 649 14% 712 12% 10% 8% 6% 4% 2% 0%
331
Source: IMaCS Industry Comment-The Indian Pharmaceuticals Industry, March 2009
This includes the US, where growth is expected to be in the 1-2% range for both 2008 and 2009. In 2008, the US pharmaceutical market, the worlds largest, is forecast to grow 1-2% to US$287-297 billion. Contributing to the slower growth is less-than-expected demand for recently introduced products, as well as the economic climate, which appears to be having an impact on doctor visits and pharmaceutical sales. The top five EU countries (France, Germany, Italy, Spain and the UK) are forecast to grow 3-4% in 2009, reaching sales of US$162-172 billion. In Europe, growth driven by the continued aging of the regions population and rising demand for preventive care will be tempered by the increased impact of health technology assessments, and the decentralization of government healthcare budgets. Japan, the worlds second-largest market, is expected to see higher growth of 4-5% in 2009, reaching US$84-88 billion.
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Human R Resource and Skill Requirem ments of the C Chemicals and Pharmaceuti d icals Sector
By com mparison, the emerging m e markets of C China, Brazi India, South Korea, M il, Mexico, Tur rkey and Russia a forecast to grow at a combined 14-15% in 2009 to US$ are 2 $105-115 bil llion. Along with the pharmac ceutical indu ustrys increased focus on these high-growth markets, these count s h tries are benefitin from grea governm ng ater ment spending on healthcare and broa g ader public a private healthcare and funding which is d driving greate access to, and demand for, innovat medicine er d tive es.
1.3.2. Ind dian Pharma aceutical In ndustry

Domestic industry S Size The dom mestic marke of pharma et aceuticals is estimated to be Rs. 43,3 crore in 2007-08. Th Indian o 300 he pharmac ceutical mark is small, both by We ket estern standa ards and in t terms of per capita consumption. Althoug India is th worlds lea gh he ading produc of generi drugs, its a cer ic annual per capita consum mption of pharmac ceuticals is a among the lo owest in the w world at app proximately R 190 (US$4.50) per person, as Rs. compare with US$8 in the US and US$13 in China in 2006. ed 820 3 n Figure 12: PF F PFCE on med dical care & health servi ices (Rs cror re)
16 60,000 14 40,000 12 20,000 10 00,000 80,000 8 60,000 6 40,000 4 2004 Source: S Source: CSO, IMaCS Analy ysis 2005 200 06 2007 2008 99,143 85,997
CAGR 13.4%
152,296 1 132,014
114,3 377
Exports s India is currently rec cognised as a high-qualit low-cost skilled produ of pharm ty, s ucer maceuticals. It is seen y facturing base for Active Pharmaceut tical Ingredie (APIs) a formulat ents and tions, but not only as a manufa also as an emergi ing hub for biotechno ology, bioinformatics, c contract res search, clini ical data ment nical trials. A present, In is amon the top-20 pharmaceut At ndia ng 0 tical exporter worldrs managem and clin wide an with the largest num nd mber of US FDA inspec cted plants o outside the USA. Vario other ous agencies such as Me s edicines and H Healthcare p products Reg gulatory Agen (MHRA UK, ncy A) The erapeutic
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Goods Administration (TGA), Australia and Health Protection Branch Canada have approved scores of plants in India. Indias exports of drugs and pharmaceuticals have registered strong growth during the last few years. Exports have increased at a 5-year CAGR of 18% to around Rs. 29,100 crore in 2007-2008. Indias pharmaceutical exports are primarily to US, Germany, Russia, UK, and Nigeria.US is the largest export market accounting for 19% of the exports in 2007-08. India exports full basket of pharmaceutical products comprising intermediates, APIs, Finished Dosage Combinations (FDCs), biopharmaceuticals, vaccines, clinical services, etc., to various parts of the world. Figure 13: Pharmaceutical Exports (Rs. crore)
35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 2004 2005 2006 2007 2008 15,213 17,858
CAGR 18%
26,895 22,116
29,140
Source: Report of the Task Force, Ministry of Commerce & Industry, December 12, 2008
Figure 14: Share in exports

Others 2%
Basic Drugs, Fine Chemicals & Intermediates 44%
Formulations 54%
Source: IMaCS Industry Comment-The Indian Pharmaceuticals Industry, March 2009
Formulations account for 54% of the export value followed by bulk drugs & intermediates. Others include Herbal, Ayurvedic and Homeopathic drugs etc.
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Imports The import value of pharmaceuticals was Rs. 6,680 crore in 2007-08. The imports are mainly raw materials, which account for around 70% of the imports. Imports have been growing at a CAGR of 18.4% for the period 2002-03 to 2007-08. The key exporting countries to India are China, Switzerland, US and Germany. China is the largest exporter to India and accounted for 40% of the import value in 2007-08. Figure 15: Pharmaceutical imports (Rs. Crore)
8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 2004 2005 2006 2007 2008 2,958 3,169
CAGR 23%
6,680 5,852
4,551
Source: Report of the Task Force, Ministry of Commerce & Industry, December 12, 2008, IMaCS Analysis
Figure 16: Pharmaceutical imports by countries

Others 20% France 3% Italy 3% Denmark 4% Germany 6% USA 10% Switzerland 13%
China 41%
Source: Report of the Task Force, Ministry of Commerce & Industry, December 12, 2008, IMaCS Analysis
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1.3.3. Value Chain of the Pharmaceuticals Industry

Figure 17: Value Chain of Pharmaceuticals
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1.3.4. Key Segments

The pharmaceutical industry can be divided on the basis of form, therapeutic application and patent protection. On the basis of form, the industry can be divided into bulk drugs and formulations, while on the basis of application; it can be divided into various therapeutic segments. The pharmaceuticals can also be segmented as generics and patent protected drugs. Bulk Drugs and Formulations Bulk drugs are the active pharmaceutical ingredients (APIs) with medicinal properties, which are used to manufacture formulations. APIs cannot be administered directly to the patient, and other substances called excipients are added to stabilise the mixture. This end product, which includes the API and the excipient, is referred to as a formulation. Formulations can take the form of tablets, capsules, syrups, ointments, creams, injectables, etc. Formulations are the pharmaceutical products administered to patients. Approximately 80% of domestic production consists of formulations, and more than 85% of those formulations are sold in the domestic market, whereas at least 60% of bulk drug production is exported. India has the worlds third-largest API manufacturing industry. Currently, Indias drug industry produces more than 400 different APIs and is among the worlds top 5 API producers accounting for approximately 6.5% of the worlds API production. Italys Chemical Pharmaceutical Generic Association projects that Indias share of the world API market will grow to 10.5% by 2010 as patented blockbuster drugs lose their patent protection. The leading APIs were anti-infective, and gastrointestinal, cardiovascular, and respiratory drugs. In terms of volume of sales, the gastrointestinal and cardiac segments saw the highest rates of growth and accounted for the largest number of new drug launches. Therapeutic segments On the basis of application, the key segments in the pharmaceutical industry are as under. However, some of the therapeutic segments are overlapping because of multiple applications. Anti-infectives: antibiotic (penicillin, sulphonamide, amino glycoside, tetracycline, macrolide, cephalosporin, quinolone, etc.), and vaccines. Pain Management: anti-pyretic & analgesic, non steroidal anti- inflammatory drugs (NSAIDs), anti-rheumatics. Cardiovascular (CVS) Drugs: cardiac therapy, anti-hypertensives and anti-hypotensives.
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Central Nervous System (CNS) Drugs: analgesics, anti psychotics, anti-epilepsy, tranquilisers and sedatives, and anti-Parkinsons disease. Gastro-intestinals: antacids, anti-ulcerants, anti-spasmodics, and anti-diarrhoeals. Anti-parasitics: anti-protozoa, anti-malarials, anti-fungals, anti-helmintic, etc., Corticosteroids: topical corticosteroids, systemic corticosteroids. Genito-urinary: gynaecological preparations, sex hormones and stimulants. Dermatological preparations: anti-fungal preparations, anti-acne drugs, other dermatological preparations Respiratory Drugs: cough and cold preparations, anti-asthmatics, anti-histamines, rubs, and anti-tuberculosis. Vitamins: plain vitamins and combinations, anti-oxidants. Mineral Supplements: calcium preparations, potassium preparations, anti-anaemic preparations, Iron combinations, etc. Anti-diabetics: insulin, oral anti-diabetics. Other Drugs: anti-obesity, digestive enzymes, blood plasma, anti-leukaemics, cytostatics and immunosuppressive drugs etc
The growing urbanisation, growing disposable income and lifestyles that are becoming ever more Western, this has resulted in increasingly high prevalence of Western lifestyle diseases. , the increase in the elderly population compounded with increasingly Westernised lifestyles has meant epidemiological trends in emerging market countries are growing closer to those seen in Western markets, prompting a shift in therapeutic focus: sales of anti-infectives that traditionally dominate emerging markets are slowing down and are being taken over by the CNS, cardiovascular, gastrointestinal and metabolic agents. Sales of oncology drugs are still low compared to the major pharmaceutical markets, however, they are growing rapidly. The share of chronic and lifestyle segment is also increasing vis--vis the acute segment. The demand for these drugs is growing at a faster rate, at 18%, than domestic demand for the acute drug segment (12%). India has often been called the worlds diabetes capital and the rates of aliments such as hypertension and high cholesterol are increasing annually. The lifestyle drug segment will fuel the growth of Indias pharmaceutical industry and includes anti-diabetes, anti-ulcer, anti-depressants, cardiovascular, hypertension drugs, Alzheimers disease, osteoarthritis, and cancer.
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Generics & Brand name drugs These are copies of off-patent brand-name drugs that come in the same dosage, safety, strength, and quality and for the same intended use. These drugs are then sold under their chemical names as both over the counter and prescription forms. The generics segment can be further segmented into: Plain vanilla generics: These are commodity generics that are off-patent in the regulated markets. They offer little or no innovative value over the innovators product. Branded generics: Generic drugs for which a drug manufacturing company has attached its brand name and may have invested in its marketing to differentiate it from other generic brands Brand name drugs are innovator drugs patented by pharmaceutical companies to prevent them from being copied or reverse engineered by other companies. Indian pharmaceutical industrys strength lies in generic in both domestic and international market. Indian firms produce nearly 60,000 generic brands in 60 therapeutic categories. More than 90% of the drugs in the domestic market are generics. Indian pharmaceutical exports are also dominated by generics. The expertise that the Indian pharmaceutical sector developed in reverse engineering and production of generics can be directly attributed to the effects of Governmental policy such as the Patents Act, 1970 which played a major role in shaping the industry and bringing it to the present enviable position. The Act of 1970 excluded product patents on pharmaceuticals, allowing the mushrooming of a vigorous generics industry in India which could meet not only domestic demand for drugs at lower prices but could also export cheaper drugs to other Third World countries. Figure 18: Share of various therapeutic segments
Cancer 1% Dermatology Women's Health4% 5% Musculo-skeletal system 6% CNS 8% Respiratory 9% Anti-infectives 23% Cardiovascular 16% Others 2% Alimentary Tract & Metabolism 26%
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Human Resource and Skill Requirements of the Chemicals and Pharmaceuticals Sector Source: IMaCS Industry Comment-The Indian Pharmaceuticals Industry, March 2009
1.3.5. Contract Research and Manufacturing and Other Services

Facing lagging sales of patented drugs by MNCs in their home markets, declining R&D revenues, and rising costs, many MNCs have turned to contract research and manufacturing services (CRAMS), comarketing alliances, outsourcing of research and clinical trials to reduce costs, increase development capacity, and trim the time to market for new drugs. CRAMS can be divided into 3 basic segments: the production of intermediates, active pharmaceutical ingredients for new chemical entities, and the manufacture of generic drugs. India has emerged as one of the worlds leading CRAMS providers for MNC innovator companies and now accounts for between 6 and 7% of the global market. In 2005-06, the Indian CRAMS market was estimated around Rs 2500 crore with contract manufacturing accounting for nearly 84% of the total. The remainder consisted mainly of contract research. Both contract research and contract manufacturing grew by more than 40% in 2005 and 2006. Subcontracting in India has gradually moved up the value-added chain from intermediates and APIs to new drug discovery, clinical trials, marketing, and sales. India has significant valid population to participate in clinical trials and the country also has proven capabilities in medical skills, hospital beds and IT capability. This offers an opportunity to capture the market share in global clinical R&D market such as clinical trials, data management, testing, etc. By building the above key blocks in the drug discovery value chain, India can reach the status of integrated provider in chemistry and biology services. The share of revenues from services such as clinical trials etc. is likely to increase their share of the total revenue of the pharmaceutical companies.
1.3.6. Market Structure

Indias pharmaceutical industry is highly fragmented with more than 20,000 domestic production units. Due to low barriers to entry and low capital requirements, the number of domestic pharmaceutical firms engaged in the formal and informal sectors expanded dramatically from 2,257 in 1970 to more than 20,000 in 2007-08. As many of these companies focus of producing similar generic drugs, with possibly hundreds of companies producing the same drug, the industry is characterised by fierce competition and high volumes, razor-thin profit margins, overcapacity, and declining prices. The vast majority of Indias pharmaceutical firms are small by global standards with annual revenues of less than Rs. 200 million (US$4 million). Approximately 80% of them are engaging in some type of contract manufacturing or outsourcing. The largest 250 companies control nearly 70% of the domestic market with the top 10 controlling approximately 40%.
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The domestic Indian pharmaceutical industry consists of both domestic companies and subsidiaries of MNCs. In the 1970s, the vast majority of foreign pharmaceutical companies abandoned the Indian market during the `process patent era due to inadequate product protection, government price controls, growing domestic competition, and declining prices and profitability. Consequently, the share of Indias market controlled by multinationals dropped to less than 19% by 2007. Table 11: Key Players Company Ranbaxy Labs Principal Products: bulk and generic drugs Anti-infectives, cardiovascular, gastrointestinal, central nervous (diazepam, midazolan), ophthalmic & ointments, urologicals, nutritionals, sex hormones, analgesics, anti-asthma, cough & cold, vaccines. Dr. Reddys Cipla Cardiovascular, gastrointestinal, anti-infectives, pain management Antibiotics, anti-asthmatics, anti-AIDs and TB drugs, anabolic steroids, analgesics-antipyretics, antacids, anti-arthritis, anti-inflammatory, anticancer, antidepressant agents, anti-diabetic, anti-epileptic, anti-fungal, antimalarial. Wockhardt Pfizer India Sun Pharma Anti-infectives, pain management, nutraceuticals Nutritionals, cough syrup, anti-arthritis, anti-infectives, cardiovascular Neuro-psychiatry, cardiovascular, gastrointestinal, diabetic, gynaecological, anti-allergic, antidepressants, cholesterol reducers, antiasthma, Parkinson, ADD, pain. GSK Lupin Cadila Anti-infective, anti-inflammatory, analgesic, gastro-enterological, antiallergic, dermatological. Tuberculosis medication, antibiotics, cardiovascular. Cardiovascular, gastrointestinal, anti-inflammatory and analgesics, antibiotics and anti-infectives, vaccines and immunomodulators, antidiabetics; vitamins. Nicholas Piramal Analgesics-anti-inflammatory, antibiotics, antifungal, antihistamines, antiseptics, cardiovascular, central nervous system, diabetic, dermatologic, endocrinologic, gastro-enterological, vitamins, pulmonary-respiratory, trauma-emergency, gastrointestinal, NSAIDs. Aurobindo Pharmaceuticals Antibiotics, anti-retrovirals, cardiovascular, central nervous system, gastroenterological, anti-allergy.
Source: Company websites, IMaCS Analysis
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1.3.7. Policy and Regulatory Environment in India

Patents (Amendment) Act 2005 The Agreement on Trade-Related Aspects of Intellectual Property Rights (The TRIPS Agreement), concluded during the Uruguay Round negotiations, has led to some changes in the development of pharmaceutical industries. The TRIPS Agreement, which came into effect on January 1, 1995, sets out the minimum standards of protection for all WTO Members. A key legal requirement of the TRIPS Agreement is for all WTO Members to replace process patent protection with product patent protection in all fields including pharmaceuticals. The final set of changes to make Indias patent regime comply with the TRIPS Agreement in all respects were first contained in the Indian Patent Ordinance of 2004, that was replaced by the Indian Patent (Amendments) Act, 2005 (IPA, 2005). Price Control Mechanism National Pharmaceutical Price Control Authority is an organisation of the Government of India which was established, inter alia, to fix or revise the prices of controlled bulk drugs and formulations and to enforce prices and availability of the medicines in the country, under the Drugs (Prices Control) Order, 1995. While fixing the maximum sale price of the bulk drug, a post tax return of 14% on net worth or a return of 22% of capital employed or in respect of a new plant an internal rate of return of 12% based on long term marginal costing is considered depending upon the option exercised by the manufacturer of the bulk drug. In case, the production is from basic stage, additional 4% return is considered on net worth or capital employed. Foreign Direct Investment (FDI) As per the extant policy, FDI up to 74% is permitted through automatic route in the case of bulk drugs, their intermediates and formulations (except those produced by the use of recombinant DNA technology). 100% FDI in case of bulk drugs, their intermediates and formulations is considered by the Government on a case by case basis. The drugs and pharmaceuticals sector has attracted FDI worth US$ 1.43 billion from April 2000 to December 20.3 Other Government initiatives2 The Government has taken various policy initiatives for the pharmaceutical sector
Source: Indian Brand Equity Foundation - IBEF Page 29 of 59
Government has offered tax-breaks to the pharmaceutical sector. Units are eligible for weighted tax deduction at 150 per cent for the R&D expenditure incurred. Steps have been taken to streamline procedures covering development of new drug molecules, clinical research etc. Government has launched two new schemesNew Millennium Indian Technology Leadership Initiative and the Drugs and Pharmaceuticals Research Programmespecially targeted at drugs and pharmaceutical research.
1.3.8. Demand Drivers

Increasing expenditure on health: Spending on health is the main driver of demand of pharmaceuticals. Indias private final consumption expenditure (PFCE) on medical care and health services increased 15.4% during FY2008 to Rs. 1,523 billion. However, in real terms, expenditure increased 7.3% to Rs. 1,116 billion. In current prices, PFCE on medical care and health services increased at a 5-year compound average growth rate (CAGR) of 13.4% during FY2004-08, and at a 10-year CAGR (1998-2008) of 17.7%. The increasing government expenditure on health also contributes to the demand of pharmaceutical products. The sector, by improving indicators such as life expectancy, reduction in disease burden and child mortality, can drive the macroeconomic growth, which will result in greater income, consumption and investment and enhance the quality of life in India. Estimates indicate that every Rs. 1,000 increase in per capita health expenditure results in a 1.3% increase in life expectancy. Growth of managed care organisations: The continuing growth of managed care organisations (MCOs) in the US has been a major factor in the competitive make-up of the healthcare marketplace and the increased sales of Indian companies in the US market. Approximately 180 million people in the US now participate in some version of managed care. The purchasing power of MCOs has been increasing in recent years due to their growing numbers of enrolled patients. At the same time, those organisations have been consolidating into fewer, even larger entities, thereby enhancing their purchasing strength. The growth of MCOs has increased pressure on drug prices. Due to their generally lower cost, generic medicines are often favoured over brand-name drugs Strong Growth in Generic Sales: The top eight global marketsthe U.S., Germany, France, the U.K., Canada, Italy, Spain and Japanaccount for 84% of total generics sales. The US, the worlds largest generics market with 42% of global sales, has experienced a 2.7% sales decline in the twelve months ending September 2008 while volume increased 5.4% during the same period. Generics products now account for 63.7% of the total US pharmaceutical market volume. The US generics
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market is currently valued at US$33 billion, compared with US$34 billion in 2007, reflecting declining prices and fewer blockbusters losing patent protection in 2008. However, generics sales rose 10.2% in Japan, 16.9% in France, 12.5% in Italy and 10.5% in Spain in the twelve months through September 2008. The generics industry has increased its sales at a more rapid rate than the rest of the pharmaceutical market. The extent and rate of generic erosion following patent expiry varies across the 7 major markets, being most intense in the US, where it is estimated at 88% for standard oral solids 2 years after generic entry. This compares with much lower erosion in Southern European countries (for example, 19% in Spain) where generic use is more limited. In the US, 103 drugs are due to go off patent during 200812, with total sales of US$62 billion in 2006. Falling R&D Productivity and Decline in Output of New Drugs: In spite of continuously increasing R&D investment, output of new drugs has declined and most pharmaceutical innovation has been incremental. Because most R&D initiatives are unsuccessful in bringing a new product to market, the total amount of investment per successful drug an indication of the productivity of R&D spending in the pharmaceutical industry is very large. A decline in productivity has been evident since the mid-1990s, as increased R&D investment has coincided with a decline in the number of new chemical entities approved for marketing. As is true in other industries, most pharmaceutical innovation has been incremental, rather than radical. Most such innovation has little or no added therapeutic value over existing treatments. This has lead to shifting of focus to low cost countries for not only APIs and formulations but also for contract research and clinical trials.
1.3.9. Key Success factors

Moving up the value chain: With the introduction of product patents, many Indian companies plan to move up the product value chain and increasing exports to regulated markets, such as the US and Europe. Leveraging their comparative cost advantages, these firms plan to target plain vanilla generics sales to regulated markets in the near-term and to develop more difficult-to-manufacture generics (injectables, etc), lower-risk new drugs, and follow-on biologics in the medium term. Forming alliances with international majors: The products of ten large firms account for much of the global pharmaceutical market. In 2007, the top ten pharmaceutical firms accounted for nearly half the value of global sales. The market for pharmaceutical products is increasingly a global one, with trade and policy practices making market segmentation and corresponding price differentiation by country difficult. Facing lagging sales of patented drugs by MNCs in their home markets, declining R&D revenues, and rising costs, many MNCs have turned to contract research and manufacturing services (CRAMS), co-marketing alliances, outsourcing of research and clinical trials to reduce costs, increase development capacity, and trim the time to market for new drugs. These strategies permit MNCs to focus on their core profit making activities (competencies), such as drug discoveries and
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marketing, rather than on manufacturing. India has emerged as the principal destination for global pharmaceutical companies across the pharmaceutical value chain. Strategic options for alliances include providing contract manufacturing for MNCs, providing clinical outsourcing for MNCs, supplying APIs to MNCs, R&D collaboration, partnering with MNCs for their sales channels, etc. Regulatory compliance & managing intellectual property: The Indian pharmaceutical industry accounts for the second largest number of Abbreviated New Drug Applications (ANDAs), is the worlds leader in Drug Master Files (DMFs) applications with the U.S. Food and Drug Administration, and has the largest number of FDA-approved manufacturing plants (75) outside of the US. Many of Indias leading Indian pharmaceutical companies have also been certified by regulatory authorities in Australia, South Africa, and the EU. The Indian companies have to ensure that there is no slip up in regulatory compliances.
1.3.10. Key Risk Factors

Technology risk: R&D plays a very important role in the pharmaceutical industry. Although the industry engages in many forms of innovation, in general the most significant is the discovery and development of new chemical and biopharmaceutical entities that become new therapies. New drug development takes around 8-10 years from discovery to approval, and is prohibitively expensive, with recent studies estimating the cost at around US$900-1,000 million. Increasing competition in international markets: Emergence of countries such as China can be a major threat to the Indian Pharmaceutical industry. The number of Drug Master Files (DMF) filed by China in the US has grown significantly over the years. Spurious Drugs: The spurious drugs not only are a risk to human life but also erode the brand of the industry as a whole.
1.3.11. Drivers of Competitiveness

Indias competitive advantage lies in its lower production and research costs, its large pool of low cost technical and scientifically trained personnel, and the large number of US Food and Drug Administration (FDA) certified plants. Other important factors include the popularity of outsourcing non-critical business functions to India by MNCs, the reintroduction of product patents for pharmaceuticals, the growing importance of R&D related to drug discovery by Indian drug companies, and the growing demand for generic drugs in developed markets. It is estimated that
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manufacturing costs in India are between 30 to 40% lower than those in the US and Western Europe and labour costs are one-seventh of that in the US. Figure 19: Drivers of competitiveness of the Pharmaceutical industry
Skilled Manpower
Large number of US Food and Drug Administration (FDA) certified plants
Drivers of Competitiveness
Lower production and research costs
Stable regulatory enviornment in the vountry
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2. Human Resource and Skill Requirements in the Chemicals and Pharmaceuticals Sector
2.1. Current Employment in the Chemicals and Pharmaceuticals Sector
2.1.1. Current Employment in Chemicals
Chemical industries are broadly classified under the National Industrial Classification (NIC) codes 241 and 242. The employment under these categories is given below. The number of workers engaged under both the NIC classifications is close to 5.4 lakh, while the total persons engaged is around 7.9 lakh. NIC code 232 refers to manufacture of refined petroleum products Table 12: Current employment in Chemical Industries NIC Code 241: Manufacture of basic chemicals NIC Code 242 : Manufacture of other chemical products NIC Code 232: Manufacture of refined petroleum products Number Workers Total Engaged
Source: Annual Survey of Industry
of
136,568
402,297
41,189
Persons
201,453
596,764
54,546
Thus the overall employment in this sector is about 8.5 lakh persons. Gujarat, Maharashtra and Tamil Nadu account for around 60% of the total employment in the chemical industry.
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Figure 20: State-wise share in employment in the Chemicals Segment

Others 25% Gujarat 22%
Karnataka 4% Uttar Pradesh 5% Andhra Pradesh 8% Tamil Nadu 18% Maharashtra 18%
Source: Annual Survey of Industries
2.1.2. Current Employment in Pharmaceuticals

As regards the Pharmaceuticals segment, direct employment has increased from 6.9 lakh people in 2006 to 8 lakh people in 20084. Goa, Mumbai, Pune and Hyderabad have been the preferred destinations for formulation players in the past. However, Baddi in Himachal Pradesh and Pantnagar and Haridwar in the state of Uttarakhand are the upcoming formulation clusters, attracting formulation manufacturers from across the country due to fiscal incentives offered by the Government. Traditional bulk drug clusters are located primarily in Gujarat, Maharashtra, Andhra Pradesh, Tamil Nadu, Goa, Pondicherry and Karnataka. Visakhapatnam in Andhra Pradesh is the upcoming bulk drug cluster that has generated significant interest in the APIs players. The R&D clusters have followed a similar development pattern. Apart from the National Capital Region (NCR), other R&D clusters have been limited to the established pharmaceutical regions in the country.
2.1.3. Functional Distribution of Human Resources

During our interaction with the industry as part of our Primary Research, we analysed the proportion of workforce at various functional levels across the Chemicals and Pharmaceuticals Sector. The inputs received from the industry, supplemented by analysis by IMaCS, are as presented in the following tables. Table 13: Functional distribution of human resources in the Chemicals Segment
4
IMaCS estimates Page 35 of 59
Function Production (including Maintenance) Procurement Research Sales and Marketing Support functions (HR, Finance, etc.)
Distribution 60-65% 3-5% 2% 20-25% 10%
Source: Primary Research and IMaCS analysis
Table 14: Functional distribution of human resources in the Pharmaceuticals Segment Function Production & Quality Control Research/Lab/Testing Sales, Marketing, Medical assistance Purchase, Logistics, Supply Chain Support functions (HR, Finance, etc.) Distribution 50% 20% 5-10% 5-10% 10-12%
2.1.4. Distribution of Human Resources by Education Levels

As a part of our Primary Research, we also analysed the education-wise composition of personnel employed in the Chemicals and Pharmaceuticals Sector. The inputs received from the industry, supplemented by analysis by IMaCS, are as presented in the following tables.
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Table 15: Educational qualifications of personnel employed in the Chemicals and Pharmaceuticals Segment5 Function Ph. D / MTech / MSc etc. Graduate Engineers Diploma Engineers ITI and other vocational courses Graduates (BA/BSc/BCom/others) 12th standard or below Distribution 5%-8% 15%-25% 10% 15-20% 15-25% 20-25%
The educational distribution of personnel will change based on the level of automation more automated setups will have a lower need for ITIs, BSc (Chemistry), etc. Page 37 of 59
2.2. Skill Requirements and Skill Gaps in the Chemicals Segment

2.2.1. Profile of people employed
The following figures illustrate the profile of people employed in the Chemicals Segment across various categories. Figure 21: Profile of people employed in the Chemicals Segment Engineers / MBAs with 10-12 years industry experience
Managers
Diploma / Graduate engineers / MSc Chemistry with 4-8 years industry experience
Supervisors
Supervisors
ITIs, BSc Chemistry, Minimally educated / 8th / 10th / 12th pass / fail
Operators / Helpers
Operators / Helpers
Operators / Helpers
2.2.2. Skill requirements and skill gaps

The following table presents the skill requirements and gaps across various functions and hierarchical/reporting levels in the Chemicals Segment. Table 16: Skill requirements and skill gaps in the Chemicals Segment Function / Role Production Level Manager Skills required Ability to manage safety and regulatory aspects of the chemical products produced by the company Ability to ensure compliance to chemical regulatory requirements and guidelines Ability to coordinate with other functions such as research, procurement, etc. for existing products and ensure production Skill gaps Inadequate understanding of basic chemical processes that will activities Inadequate exposure to current tools, complement maintenance and repair
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Function / Role
Level
Skills required and quality targets as per the production plan Ability to aid the initial set-up and implementation of design mix for new products Ability to coordinate with third party manufacturers as well as with internal departments Ability to break down the production plan further based on the production target and ensure achievement of the targeted production Ability to identify opportunities for process improvement and ensure the implementation of the same Ability to ensure quality standards Awareness of emerging areas such as water soluble fertilisers Ability to oversee development, review and improvement of standard operating procedures Ability to oversee including all aspects of raw operations, ensuring
Skill gaps technology, processes Inadequate petrochemical knowledge Inadequate knowledge of safety procedures Limited availability due to lack of petrochemical specific courses Inadequate knowledge of terminal and container operations specific and
material ordering, production scheduling, catalyst replacements, etc. Ability to lead multi-disciplinary teams Ability to achieve maintenance and reliability goals and expectations Ability to work with the research team to modify or produce new products Supervisor Ability to adjust batch processing conditions based on process measurements Inadequate understanding chemical processes practical of
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Function / Role
Level
Skills required Ability to render appropriate feedback on the quality of input materials Ability to track and record process information and production data Ability to ensure cleaning of all process equipment at required intervals Ability to perform in-process and final product QA tests of finished product as required Ability to stringently comply with safety measures with respect to operations, equipments, environment, etc. and ensure that the safety measures are stringently followed by workmen Adequate knowledge of chemistry,
Skill gaps Lack of knowledge of pneumatic valves, rotary pumps etc. Lack of orientation of shop-floor culture Lack of specific petrochemical knowledge Training and assisting operators on the job Monitoring Truck turnover rate Poor people management and planning skills
chemical hazards and safety measures Ability to perform routine calibrations of equipment such as process pH meters Ability to monitor effectively operators, with them, communicate
assign specific jobs and ensure that the assigned jobs are carried out Ability to undertake documentation of process activities Awareness of safety procedures and environmental norms Knowledge on Distributed Control Systems (DCS) and Process Level Control (PLC) Operator / Helpers Basic understanding of compliance to safety issues while handling chemicals, especially hazardous chemicals Inadequate knowledge of conversion factors Inadequate ability to
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Function / Role
Level
Skills required Ability to produce a variety of chemicals and chemical intermediates by following standard operating procedures Loading and unloading of bulk chemical trucks, chemicals, catalysts, etc. Ability to use reactors, pumps, stills, centrifuges, dryers, valves, mixers, pumps, control equipment and other manufacturing equipment Ability to read, understand and follow batch sheets Ability to enter production data into computer systems such as SAP Working knowledge of chemical reactors, chemical transfer systems, filtration systems, instrumentation used in chemical processing, etc. Ability to understand and use mathematical percentages, calculations fractions, etc. Ability to undertake grinding or milling operations (if required) for rock-based sources Ability to undertake chemical mixing Knowledge of conversion factors required when adding ingredients Ability to handle instruments Ability to use computer simulation software Ability to extract production and sales data from SAP and analyse it Ability to maintain the equipments and machineries in a continuous process plant
Skill gaps render feedback on the quality Inadequate orientation compliance to safety Inadequate sensitivity to the environment Inadequate understanding of basic chemical processes Inadequate exposure to tools, technology, and processes in chemical plants Inadequate this level Inadequate ability to handle multiple types of instruments Inadequate such as SAP Inadequate knowledge of distributed systems Inadequate understanding of basic chemical processes that will aid in complementing maintenance and repair control ability to work with ERP software computer knowledge required at of inputs safety and received for processing
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Function / Role
Level
Skills required Understanding of various operations such as mixing operations (asbestos, fertilisers), briquetting, retorting, melting and casting, purification operations such as leaching, distillation, milling, layering, mixing of phosphoric acid, sulphuric acid, ammonia in industries such as fertilisers, mixing of chemicals for granulation, cutting, sheeting operations, detachment and heating (asbestos), calcinations, etc. Ability to undertake bagging, packaging, etc. Ability to lift heavy weights Knowledge on basics of distributed control systems
Skill gaps activities
Sales & Marketing
Senior sales representa -tive
Ability
to
determine and
customer with
Inadequate sense inadequate understand implications company
commercial for ability and e.g. to tax thus
requirements
expectations
regards to products being manufactured by the company Detailed technical knowledge of the product(s) Ability to recommend specific chemical products and solutions based on customer needs Ability to coordinate with production personnel and ensure that customer orders are processed per customers specific requirements Ability to generate new and repeat sales by providing product and technical information to clients in a timely manner Ability to monitor competition by
implications on cost to Inadequate selling and negotiation skills
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Function / Role
Level
Skills required gathering information on strategy of competitors w.r.t. pricing, new products, etc. Ability to sell to a variety of clients based on the product(s) manufactured by the company Ability to assist the research team in the introduction of new products Ability to understand commercial implications and the cost-to-company of inefficient sales Ability to manage sales through multiple channels Extension services to farmers in deciding type of fertilisers, crop and other technical support Ability to articulate technical aspects of agriculture
Skill gaps
Account manager / Junior sales representa -tive
Ability to conduct regular sales calls, make presentations about the companys products, correctly assess needs of customers during the sales call and be able to close the deal Ability customers Ability to undertake product trials at the customers end Ability to ensure that the companys products are set well into the customers processes and then handover the process to the customer Ability to resolve customer complaints, to develop & maintain relationships with existing and potential
Inadequate knowledge of chemical processes Inadequate towards detailed knowledge Inadequate ability to execute the end-to-end selling process Inadequate ability to negotiate prices and a tendency to compromise on price or based on customer potential orientation attaining product
customer feedback
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Function / Role
Level by
Skills required investigating problems and
Skill gaps Inadequate convey benefit chemical/fertliser customer/farmer. ability to of to
developing solutions Ability to negotiate prices with existing and potential customers and secure the best price for the company Ability to service existing accounts by tracking demand
functional
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2.3. Skill Requirements and Skill Gaps in the Pharmaceuticals Segment

2.3.1. Profile of people employed
The following figures illustrate the profile of people employed in the Pharmaceuticals Segment across various categories. Figure 22: Profile of people employed in the Pharmaceuticals Segment PhD, MSc, MPharm, Personnel with 8 - 15 years experience
Scientists
MSc, MPharm, Personnel with about 5 years experience
Managers
B Pharm, BSc
Supervisors
Supervisors
ITI/12th Standard
Workmen
Workmen
Workmen
2.3.2. Skill requirements and skill gaps

The following table presents the skill requirements and gaps across various functions and hierarchical/reporting levels in the Pharmaceuticals Segment.
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Table 17: Skill requirements and skill gaps in the Pharmaceuticals Segment Function / Role Production & Quality Control Level Managers Skills required Ability to ensure that the factory for manufacture of drugs is aptly located and follows procedures so as to avoid risk of contamination from external environmental Ability to ensure that the manufacturing environment is maintained at the required levels of temperature, humidity and cleanliness Ability to ensure that the layout and design of the equipment minimises the risk of errors and permits effective cleaning and maintenance Ability to identify avenues for cost reduction and optimum resource utilisation by implementing best practices in production-safety, pollution control and quality Ability to develop a manufacturing process economically adaptable to mass production Ability to ensure continuing upgradation of skills and continuous education for employees Ability to lay emphasis on cost effectiveness of production Adequate orientation towards Intellectual Property Management (IPM) and ensuring compliance to regulatory requirements Ability to undertake continuing Skill gaps Inadequate orientation towards quality management Inadequate understanding of intellectual property management Inadequate understanding of regulatory aspects Inadequate people management and leadership skills
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Function / Role
Level
Skills required improvements in manufacturing processes Ability to ensure efficient manufacturing and timely delivery of finished products Ability to ensure adherence to regulatory and internal process compliance such as WHO-GMP, Schedule-M and SOPs across all levels
Skill gaps
Supervisors
Ability to ensure orderly and logical placement of equipment, materials and movement of personnel so as to avoid the risk of mix-up between different categories of drugs or with raw materials, intermediates and inprocess material, and avoid the possibilities of contamination and cross-contamination Ability to ensure that disposal of waste is in conformity with various requirements, such as, those of the Environment Pollution Control Board, the Bio-Medical Waste Rules, 1996, etc. Ability to ensure proper labelling of raw materials, materials under process and finished products Ability to practice safety measures when working with infectious cultures and poisonous chemicals and ensure that workmen follow instruction with respect to. the same
Inadequate understanding of quality management practices Inadequate practical exposure to high quality lab settings Inadequate communication skills for communicating with operators Inadequate understanding of intellectual property management Inadequate task orientation Inadequate leadership skills
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Function / Role
Level
Skills required Ability to conduct in-process inspection e.g. inspecting ampoules for discoloration and foreign particles, inspecting tablets for hardness, chipping and weight, etc. Ability to liaison with stores to ensure adequate raw material Technical knowledge about products (chemical compounds and their properties) and processes (temperature requirements, etc) Knowledge of good quality practices and the ability to ensure compliance to SOPs and quality standards Ability to assist R&D personnel in process design Ability to undertake batch planning and issuance of batch sheets Ability to undertake mentoring and training of operators
Skill gaps
Workmen
Ability to operate processing equipment and other sophisticated equipment Ability to adhere to health, clothing and sanitation e.g. avoiding direct contact with raw materials, intermediate or finished, and unpacked products Ability to undertake material handling and drive industrial trucks or tractors to move materials around
Inadequate knowledge of chemical compounds and laboratory testing processes Inadequate practical orientation and exposure to machines High degree of handholding required Inadequate self motivation to enhance
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Function / Role
Level the plant
Skills required
Skill gaps and update skills Inadequate ability/knowledge to work in the following: Clean Room Air Handling units Current Goof Manufacturing Practices (cGMP) standards
Ability to load and unload material Ability to package products Ability to operate various machines such as capsule filling, blister packing, ampoule filling, granulation, etc. Ability to comply with Standard Operating Procedures (SOPs) and quality standards Ability to package and transport the drugs Technical machine knowledge Ability to identify problems such as identifying unusual noises and functioning of machines and undertake maintenance and repair of machines to minimise shutdowns Knowledge of the following: Clean Room Air Handling units GMP standards Technician (Lab) Ability to perform routine jobs such as cleaning and arranging bottles, test tubes, and other equipment Ability to maintain laboratory equipment, monitor experiments, analyze data, and record and interpret results Ability to help plan equipment layout and workflow to maintain efficient use of plant facilities Knowledge of the drug approval
Inadequate knowledge of compliance to processes Inadequate technical knowledge of Good Laboratory Practices (GLP) Inadequate knowledge of relevant USFDA rules
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Function / Role
Level process
Skills required
Skill gaps
Ability to create molecules and test them rapidly for desirable properties Detailed knowledge of one or more fields such as biology, biochemistry, microbiology, physiology, bacteriology, virology, pathology, pharmacology, zoology, etc. Ability to undertake ongoing research and the manufacture of new products Ability to undertake basic and advanced research Ability to undertake documentation and analyse data such as sales data, data generated through clinical research, etc. Since the drug discovery process is typically a lengthy process, patience and the ability or capacity to be involved till the end is critical Ability to coordinate with pharmacists, chemists, chemical engineers, packaging engineers, production specialists, etc. Sales, Marketing, Medical assistance Ability to explain companys products to physicians, pharmacists, dentists, health services administrators, etc. Ability to call upon physicians regularly, provide information about product(s) and provide free drug Convincing skills and objection handling Relationship management Basic knowledge of logistics, commercial aspects, legal aspects,
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Function / Role
Level samples
Skills required etc.
Skill gaps
Ability to undertake marketing efforts through not only direct marketing, but also digital media Ability to ensure a prompt and effective product recall system for defective products, if any Ability to adhere to regulatory guidelines and provide accurate information to customers Ability to undertake market research and analysis for pharmaceutical sales and develop effective marketing strategies accordingly Ability to undertake brand building, direct marketing, business development and market research Ability to avoid inaccurate, misleading or unethical promotion of medicines Ability to undertake development of promotional materials, detailing, account & brand management Ability to determine suitable pricing of the product Ability to assist pharmacists in checking for outdated products Adequate product knowledge as well as knowledge of how the product helps cure or mitigate an illness, so as to be able to effectively sell to physicians
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Function / Role
Level
Skills required Ability to maintain good working relationships with customers and ensure repeat sales Ability to handle objections
Skill gaps
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2.4. Projected Industry Size and Human Resource Requirements

2.4.1. Projected Industry Size
The Chemicals Industry has grown in volume terms by a Compounded Annual Growth Rate (CAGR) of 2.4% between 2003 and 2009. During the same period, the Petrochemicals sector has grown at a CAGR of 5%6. The Pharmaceuticals domestic market has the potential to clock US $ 11.4 billion in sales and US $ 22 billion in exports by 2012. The near term growth rates are expected to be about 13% to 14% for domestic sales and about 23% to 25% for exports7. However, keeping in mind the long term growth trend, we expect that the domestic production would grow at the rate of the Private Final Consumption Expenditure on Healthcare (about 14%) and a long term export growth rate of about 15% till 2022. Table 18: Projected Industry Size Industry Chemicals (in '000 MT) Petrochemicals (in '000 MT) Pharmaceuticals (Rs. billion) 2008 7,725 8,675 869 2012 8,523 10,701 1,573 2018 10,881 15,186 3,520 2022 12,685 19,088 5,660
Source: CSO, ASI, Annual Report Department of Chemicals and Petrochemicals 2008-09, Ministry of Chemicals and Fertilisers, IPA, IMaCS analysis
2.4.2. Projected Human Resource Requirement

The projected human resource requirement keeping in mind the above-mentioned growth is illustrated in the following table: Table 19: Human Resource Requirement for the Chemicals and Pharmaceuticals Industry (in 000s) in '000s Chemicals Petrochemicals Pharmaceuticals 2008 798 70 800 2012 841 62 1,170 2018 922 78 1,898 2022 993 91 2,464 Incremental (in 000s) 195 21 950
6 7
Source: Annual Report, Ministry of Chemicals and Ferilisers, 2008-09 Source: IBEF Pharmaceutical Industry Overview Page 53 of 59
in '000s
2008
2012
2018
2022
Total Incremental Human Resource Requirement (in 000s)

Source: IMaCS analysis
Incremental (in 000s) 1,880
The incremental human resource requirement is expected to be about 1.9 million persons by 2022, led by the requirement in the Pharmaceuticals manufacturing sector.
2.4.3. Projected human resource requirement function-wise

The projected human resource requirement, function-wise, is presented in the following tables. Table 20: Incremental human resource requirement function-wise (in 000s) for the Chemicals and Petrochemicals sector Function Incremental human resource requirement (in 000s) 141 6 4 43 22 216
Production Procurement Research Sales and Marketing Support functions (HR, Finance, etc.) Total
Table 21: Incremental human resource requirement function-wise (in 000s) for the Pharmaceuticals sector Function Incremental human resource requirement (in 000s) 832 333 166 166 166 1,664
Production and QC Research/Lab Sales, Marketing, Medical Assistance Purchase Support functions (HR, Finance, etc.) Total
2.4.4. Projected human resource requirement education-wise

The projected human resource requirement across different educational levels is as shown in the following table.
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Table 22: Incremental human resource requirement education-wise Chemicals, Petrochemicals, and Pharmaceuticals sector Educational Qualification Incremental human resource requirement (in 000s) 113 470 226 320 376 376 1,880
Ph.D/M Tech/etc. Graduate Engineers Diploma Engineers ITI/ITC Graduate (BSc.,BCom) 12th standard and below, but requiring skilling Total
2.5. Skill Pyramid

The profile of human resource in the Chemicals and Pharmaceuticals Industry can be viewed in the form of the Skill Pyramid. Figure 23: Skill Pyramid for the Chemicals and Pharmaceuticals Industry
5%-6%
Skill Level 4 (skills which are highly specialised involving research and design) Skill Level 3 (skills which require long drawn preparation as demonstrated by acquisition of degrees, and involve highly technical or commercial operations) Skill Level 2 (skills which require technical training inputs, knowledge of complex operations and machinery, skills of supervision) Skill Level 1 (skills which can be acquired with a short/modular and focussed intervention and thereby enhancing employability of those with minimal education)
44%-45%
25%-30%
20%-25%
It is to be noted that the relative proportion of skills is much different from industries such as Textiles, Food Processing, Gems and Jewellery. It can be said that the requirements of skill here are much higher due to activities involving research, automated processes, lab, and a large sales force too, apart
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from the sector being under regulatory purview and requiring compliance to strict production and safety requirements.
2.6. Focus Areas for Skill Building

The major focus of skill building in the Chemicals and Pharmaceuticals sector should targeted towards operators and sales personnel. The details of possible focus areas for skill building are shown in the following table. Table 23: Focus areas for skill building in Chemicals and Pharmaceuticals Sector Personnel building Chemicals Industrial and Chemical Manufacturing Attendant Usage of protective equipment such as gumboot, helmet, gloves Understanding of basic chemical processes Fire detection and safety compliance and awareness Identification of chemicals General Awareness about length, width, height, area, volume, pressure, flow, temperature, level, pH density, viscosity, current, specific gravity, etc. Understanding SOPs Process Attendant Maintenance work: Dismantling, Cleaning and assembling of gate, globe , ball , stop cock and plug valve Dismantling, cleaning, assembling of pumps Fitting of pipelines and joints Flow meter) Manufacturing Assistant Operation of Ball mill Operation of hammer Mill Operation of Sieve Analysis
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for
skill Indicative coverage areas
measurement Rotameter,
(Venturimeter, dry diaphragm
Orificemeter,
Sector
Personnel building
for
Operation of Plate & Frame Filter Press Operation of Rotary vacuum Filter Operation of Basket Centrifuge Operation Of Mixing Equipment Operation of settler & decantation Knowledge of GMP, SOPs, etc. Lab Attendant Identification and testing Filtration, crystallisation, distillation, etc. Operation and installation of plates, heating mantles, oven, pump, furnace, incubator, fire extinguisher, etc. Equipment Operator Operation of distilling columns Operation of absorption towers Operation of rotary drier, rotary drier, spray drier Operation of mixers, extractors Operation of leaching unit Sales Functional knowledge of product Understanding Advising clients Knowledge of basic of commerce billing, taxation Marketing and communication, especially in vernacular language Pharmaceuticals Operators Knowledge of API and formulations basic Cleanliness and hygiene Operations of equipment Compliance to cGMP, WHO guidelines, USFA guidelines Understanding of SOPs farm patters, diseases (fertilisers and pesticides)
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Sector
Personnel building
for
Understanding of safety, handling of waste, etc. Sales Knowledge of drug and intended use Conveying benefits of schemes and offerings Fundamentals of pricing tax, discounts, etc. Selling skills and communication skills.
Source: MES, DGET, and IMaCS analysis
The above areas, put together, account for over 70% to 80% of the human resource requirement where skill building would be required in the future.
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This report has been prepared by ICRA Management Consulting Services Limited (IMaCS). IMaCS is a multi-line management and development consulting firm headquartered in India. It has an established track record of over 15 years in consulting across various sectors and countries. IMaCS has completed over 950 consulting assignments and has worked in over 30 countries across the globe. Through the process of carrying out several assignments over the last decade and half, IMaCS has accumulated considerable analytical and consulting expertise, backed by the following capabilities: Deep understanding of policy formulation. Extensive and organised database on several sectors. Knowledge of key factors of success in different projects and programmes. Ability to research emerging trends in the economy, as well as in specific sectors. Insight into different programmes and organisational processes. Ability to carry out economic analysis, build quantitative and financial models to project future performance and identify imperatives. Ability to identify the various types of risks and suggest appropriate strategies to mitigate the same.
The Education and Skills practice at IMaCS focusses on identifying skill gaps, mapping future skill requirements, and formulating strategies to address them. Our service offerings encompass diagnosis, design and implementation of education and skill development interventions for government and private sector.
R. Raghuttama Rao Managing Director IMaCS 4th floor, Electric Mansion Appasaheb Marathe Marg, Prabhadevi Mumbai 400 025 Tel: 91 22 3047 0047, Fax: 91 22 3047 0081 Email: raghuttama.rao@imacs.in
M. Sairam Head Process Consulting IMaCS 5th floor, Karumuttu Centre 634, Anna Salai, Nandanam, Chennai 600 035 Tel: 91 44 2434 0043, Fax: 91 44 2434 3663 Email: sairam.m@imacs.in
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National Skill Development Corporation D-4, Clarion Collection, (Qutab Hotel) Shaheed Jeet Singh Marg New Delhi 11 0 016 Tel : 011 46 56 0414 Fax : 011 4656 0417 Email : nsdc@nsdcindia.org
www.nsdcindia.org

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Human Resource and Skill Requirements for the

1. Environment Scanning and Competitiveness of Chemicals & Pharmaceuticals Sector

Investment Commission of India Page 5 of 59

Polymers 63% Source: Ministry of Chemicals & Fertilisers, IMaCS Analysis

2002 7,017 6,235 88.9 689 702 6,222

2003 7,110 6,554 92.2 713 972 6,295

2004 7,323 7,006 95.7 818 1,037 6,787

2005 7,798 7,349 94.2 859 1,270 6,938

2006 7,984 7,467 93.5 1,167 1,005 7,629

2007 9,336 8,223 88.1 1,225 1,346 8,102

Capacity Production Capacity Utilisation (%) Imports Exports Consumption

Source: Ministry of Chemicals & Fertilisers, IMaCS Analysis

2002 1,281 1,167 91.1 477 17 1,627

2003 1,403 1,353 96.4 399 57 1,695

2004 1,601 1,474 92.1 598 46 2,026

2005 1,669 1,506 90.2 568 63 2,011

2006 1,812 1,545 85.3 663 53 2,155

2007 1,889 1,545 81.5 867 62 2,350

Capacity Production Capacity Utilization (%) Imports Exports Consumption

Source: Ministry of Chemicals & Fertilisers, IMaCS Analysis

Source: Ministry of Chemicals & Fertilisers, IMaCS Analysis

Caustic Soda 36%

Soda Ash 40%

2002 6,057 4,342 71.7 203 107 4,438

2003 6,256 4,792 76.6 220 239 4,773

2004 6,393 5,070 79.3 201 217 5,054

2005 6,422 5,272 82.1 239 359 5,165

2006 6,603 5,475 82.9 711 230 5,956

2007 7,072 5,269 74.5 409 179 5,499

Capacity Production Capacity Utilisation (%) Imports Exports Consumption

Source: Ministry of Chemicals & Fertilisers, IMaCS Analysis

Figure 3: Composition of Inorganic industry

Source: Ministry of Chemicals & Fertilisers, IMaCS Analysis

2002 487 374 76.8 53 40 387

2003 487 404 83 99 34 469

2004 568 441 77.6 116 64 493

2005 642 508 79.1 99 153 454

2006 742 544 73.3 131 121 554

2007 749 602 80.4 29 101 630

Capacity Production Capacity Utilisation (%) Imports Exports Consumption

Source: Ministry of Chemicals & Fertilisers, IMaCS Analysis

Capacity Production Capacity Utilisation (%) Imports Exports Consumption

Source: Ministry of Chemicals & Fertilisers, IMaCS Analysis

Phosphorous 24% Nitrogen 64%

Source: Ministry of Chemicals & Fertilisers, IMaCS Analysis

2004 17,568 14,183 2,130 16,799

2005 17,688 15,343 2,779 18,398

2006 17,748 15,536 5,300 20,340

2007 18,020 15,965 6,153 21,651

2008 18,143 14,617 7,767 22,570

Total Capacity Production Imports Consumption

Azo Dyes 11%

Organic Pigment Colours 50%

Source: M Ministry of Che emicals & Fer rtilisers, IMaC Analysis CS

Trends in Index of Industrial P Production Figure 6: IIP for ch hemicals

Figure 9: Share of different states in production of chemicals*

Andhra Pradesh 4% Madhya Pradesh 4% Rajasthan 4% Punjab 4% Tamil Nadu 6%

Figure 10: Share of different regions in Fertiliser production

South 14% Source: Ministry of Chemicals & Fertilisers, IMaCS Analysis

1.2.4. Demand Drivers

1.2.5. Policy and Regulatory environment

1.2.6. Key Success factors

1.2.7. Key Risk factors