Management

Gujarat's biotech blueprint

Missing the IT train and leading in pharmaceuticals, Gujarat is positioning itself as the next destination for biotechnology. Will it wipe out the already established biotech hubs of the country or follow a different path? Arshiya Khan maps the moves

Consider this--the state of Gujarat meets over 40 percent of the national need for medicines and is growing at an annual rate of 20 percent much higher than the national and global growth, according to various estimates. This is further fuelled by the perpetual efforts of the State Government and the entrepreneurs in biotech who have their wings spread nationally and internationally. But is this lead taken by Gujarat a replica of other states like Hyderabad and Bangalore?

The evolution

Though Gujarat has missed the IT train, it is scaling up to be the next biotech hub. Even though the transition from core pharma to biotech has been slow, it has picked up pace in the last few years due to combined efforts of the State government and entrepreneurs. Adding to this, availability of a strong infrastructure due to rapid growth of the pharma industry has also helped the growth of biotech sector in Gujarat. Akshay Saxena, Mission Director, Gujarat State Biotechnology Mission (GSBTM), reasons that Gujarat already had a very strong base of the pharma sector which is well known. Secondly this part of the industry knowingly as a part of their strategy has adopted biotech in its own way. It is due to this that things started falling in place for the biotech sector.

If we trace the history of biotech growth in the country from 1960-1970, very few companies were there. The sector has grown from 1995 onwards. And this has a certain pattern of growth. It is not state specific, but is more or less dependent on the perspective around in the country vis a vis the scenario at the global level. So, it is a function of net result, feels Saxena.

"Gujarat entrepreneurship is very receptive and always prepared to welcome change and new things" - Dr Bakulesh M Khamar Executive Director Cadila Pharmaceuticals

"It is not about Bangalore or Karnataka going ahead, rather it allowed other states to revisit their strength and laid an example to other states about their strengths and offerings so that other could follow suit" - Akshay Saxena Mission Director Gujarat State Biotechnology Mission (GSBTM)

"Biotech companies require uninterrupted stable power, high quality water, non-polluting surroundings. With GSBTM spearheading this initiative, biotech companies setting up businesses in such parks would be able to exploit this infrastructure" - Rajiv Gandhi CEO and Managing Director Hester Biosciences

Leaving no doubts, the entrepreneurial spirit of Gujaratis, industrialisation and commerce and business grew in Gujarat with support from the Government, but driven by the people. There are companies like Intas Biopharmaceuticals, Concord and Maps India that are doing well on their own. The State government realised that companies and activities in the biotech sector are picking up pace. And if this gets a helping hand from a central agency to address and bring it to limelight it will fasten the wheel.

Likewise was the case of biotech in Karnataka. And we see the results today, adds Saxena. They set the pace and motion and discovered the strength of the State in the sector. This gave them a focus. So has Gujarat missed the train, or is it lagging behind the already established biotech states of Bangalore and Hyderabad.

Clarifies Saxena, "No, Gujarat has not been left behind." He explains the first and foremost company which started traditional biotech and fermentation technology was Alembic which was established in early 1970s. "The biggest diagnostic company of the country--SPAN--is in Gujarat. The biggest vaccine producer and supplier, Chiron, is located in Gujarat, so is a company coming up with recombinant products--Intas--which was not well known, but during the last six to seven years it has produced many products in the market. Think of a company working in enzymes--Concord--it is here since the last six years. Lined up is another example of Maps, which is the first core biotech company producing enzymes and micro-organisms since 1975. It has a comprehensive biotech platform to research, develop and produce biotech solutions," He informs.
Moreover, Gujarat entrepreneurship is very receptive and always prepared to welcome change and new things, believes Dr Bakulesh M Khamar, Executive Director, Cadila Pharmaceuticals. Adds Rajiv Gandhi, CEO and Managing Director, Hester Biosciences, "The government's role is to provide an infrastructure. Biotech companies require uninterrupted stable power, high quality water, non-polluting surroundings. With GSBTM spearheading this initiative, biotech companies setting up businesses in such parks would be able to exploit this infrastructure." Probably with more than 45-50 biotech companies and turnover of around Rs 450-500 crore, Gujarat would rank among top five states of the country. And it is determined to build further from this base.

On Bangalore leading in biotech over Gujarat, Saxena points out, "It is not about Bangalore or Karnataka going ahead, rather it allowed other states to revisit their strength and laid an example to other states about their strengths and offerings so that others could follow suit." This was precisely the case when GSBTM was formed, recalls Saxena. We revisited the status of biotech in Gujarat and then we developed on our strengths and weaknesses, hence, discovering Gujarat biotech.

Again, on a comparative note with the established players, he puts forward the point that companies like Alembic, Maps and various others were not created after Bangalore or Hyderabad, after 2004, but taking stock of the situation revealed, Gujarat has got strength of biotech companies, which may not be of the high standards like that of Maharashtra or Andhra Pradesh. But there are quite a good number (around 40 companies) which have various products and also present nationally and internationally in different sectors. "So I would say that it is not that Gujarat has biotechnologically developed after Bangalore or Karnataka took over. It was already there. The only way these states have helped us is to rediscover and put the facts on the platform and this is the strength."

It is not that Gujarat is not doing what Bangalore has done. But everything is not being copied the same way. Some states have a strong base and expertise which help the other States to follow the same course and in the course of time they are discovering their own exclusiveness. "Who knows, after some time we may find that Karnataka is not having that strong a pharma base, and Gujarat has got it," opines Saxena. So what Karnataka has done is that it has taken a lead in focusing a centre. And it has helped the other states in also revisiting them and seeing whether it is applicable and workable. So quite possibly you might not be able to use the same model, because the ultimate objective is to project India as a biotech destination with essence to various parameters, which are important, he explains.

Mapping the moves

So how do we put Gujarat where Bangalore and Hyderabad are today? Saxena explains, "It's a question of putting focus to a centre. There also has to be some flagship company to lead the way. And most importantly, there has to be branding." Analysing the way Bangalore has developed, he points out that Bangalore has branded biotech, it has branded the State and in the process, it has branded India as a whole. This is something which every state does and this is what people, companies and entrepreneurs focus on when they pick and choose a location or a company. Remarks Saxena, "Nobody will look at Bangalore or Gujarat as an icon; they see these states as one of the participants or contributor on a whole. So we have to create brand India to attract players."

What will also drive the growth of this sector is the convergence of pharma, chemical and agri industry. Healthcare, biopharma, agri-biotech, industrial biotech, contract research, marine and environment biotech are the sectors under focus. While Big Pharma companies such as Zydus Healthcare plans to focus on biotech in a big way, more pharma companies are considering a foray into the sector.

Promise areas

Besides biotech, other areas that hold promise are diagnostics, enzymes and biopharma. Clinical trials also offer a very strong base and opportunity in Gujarat. Following the league is the agricultural sector, which is strong in terms of biofuels, biofertilisers, diagnostics and testing facilities. This is a huge business that has not been touched. A lot of value addition production is possible from the agricultural sector, which is being used else where in the country. "Environmental application also holds a huge promise. In the country, environmental solutions provided to the biotech application have scope. And this is what I think holds a lot of potential," feels Saxena. Another interesting sector is animal husbandry and marine resources, which has got a strong growth, and Gujarat, with the longest coast line and very rich resources in terms of bio prospecting and product development, holds a strong potential.

Besides, players will also come to Gujarat as it is the pharma leader of the country since independence, and the State also has got a large number of trained human resources required for the industry. There is also well developed infrastructure to carry out research in the industry. Adding to that, the atmosphere is congenial for growth of the industry and the government is also positive on this front, highlights Khamar. Gujarat also has a large NRI population across the world, which is an added advantage. To further leverage this, GSBTM is in touch with NRIs. One has to keep in mind the requirement, whether it is coordination, collaboration, infrastructure or just investment. So we have a plan of establishing a very dedicated network of involving this NRI population.

Build on

Nothing comes easy and this applies across different areas. Biotech sector in Gujarat also has its own share of hurdles and challenges. The whole approach has been in developing pharma and other conventional industrial set up and biotech has a very specific requirement in terms of infrastructure, manpower. Therefore, a long distance has to be covered. This would also mean definitive infrastructural development, educational and manpower development, a whole angle of research angle to be created and so on and so forth. Whereas in this regards other states are slightly benefited and they have an inherent strength of having good national level institutes and research centres, which does give a natural environment for research--this is where Gujarat lags behinds as there are not many research institutes in the State. So, developing a national level research centre, education centre and infrastructure is the need of the hour.

If Gujarat has to take a lead, how will it attract the talent away from established biotech hubs? Saxena says that as more and more centres are created, more such talents will be attracted towards the centre. Besides the manpower crunch, the State is now losing investments to other North Indian states because of their offerings to the entrepreneurs. To address this situation one has to analyse the key parameters for industrial development and industrial investments which are different with regards to the urban, social and industrial infrastructure. Gujarat has been providing it since long and that is why it has been in the forefront of industrial development. Gujarat, with its industrial infrastructure, power availability, labour and employment, investor-friendly business environment, would continue to attract industries.

The India advantage of having a vast talent pool all of a sudden seems to be fading away. The new mantra is to mobilise manpower. Saxena recalls, "If you see industry as a whole in isolation it has been able to mobilise manpower from anywhere in order to fuel the growth. But if we see biotech in the long run with new molecules in the pipeline, this has to differ. And therefore the local talent has to rise to the occasion and it has to have the capacity so that it becomes an attracting point for the industry also and it can contribute to the research perspective and research environment at the investee level and also to the industry," says Saxena. Therefore, the main challenge is to convert our educational manpower more towards a definitive skill set which is required by the industry.

How will state manage the manpower crunch? The manpower crunch in not in terms of numbers, but in terms of quality, and since it is a very dynamic world, the education which is here for the conventional science and conventional stream has to be towards this side where the skill sets can be addressed. So it is not that the state has not got the first few to its credit, but the issue is that the industry has got a very specific skill set requirement. Academics cannot be changed over night and no one can be geared for that, so the challenge that the State is facing is that the way these value addition programmes can beimplemented. There are institutes that are providing manpower like the MSC institutes, Saurashtra University, Sardar Patel University, BV Patel Pharmaceutical Education and Research Development Centre. There are about 56 colleges and 10 universities and every year there are about 1,100 to 1,200 MSc students who pass out and 3,000 to 4,000 undergraduate students. So numerically, the manpower is available and the industry is picking up from there.

Move that will make a difference

Will the biotech boom kill the pharma sector? It is difficult to predict this, says Saxena. He feels that pharma will remain an important sector. Saxena thinks that it will evolve more into a biotech oriented pharma sector instead of purely pharma sector.

So when a state has so many offerings in its kitty, will it replace or wipe out the other established players like Bangalore and Hyderabad? "It is too early to say that Gujarat would lead," feels Saxena.

On the other hand industry veterans offer a different opinion. The time is not far when biotech companies from Hyderabad and Bangalore--established biotech hubs--also turn towards Gujarat.

"But this is not what we are aiming for," remarks Saxena. The reason he cites is that every state has its own inherent strength. Probably, Gujarat will be one of the states which will be able to contribute in a significant manner. If biotech is having a 60 percent application in pharma, both in terms of revenue generation and number of companies, then there is a possibility that Gujarat has got a strong potential, as more companies will come on the top. So we see Gujarat not as the leader, but one of the leaders if there are many players in Gujarat, which are yet to come, signs off Saxena.

arshiya.khan@expressindia.com