What have been the revenues of the LSCA (India) division for 2013? By how much have they increased over the past year? How much does the LSCA (India) division contribute to the global pie? By how much has this increased in the last few years?
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P Siva Kumar
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Agilent has been able to show a significantly better performance in 2013. As an organisation, we have grown the business much beyond anticipation and market expectation. The growth has surpassed the average market growth rate for the markets we address. India, as a geographical market unit, contributes approximately three per cent of total Agilent worldwide (LSCA). The growth of business over the years has been quite significant and satisfactory even under tough and turbulent market conditions.
What have been the growth drivers in the past few years? How have they changed?
Over the last few years, Agilent has shown a consistently upward trend as far as the market penetration and growth is concerned. The major drivers for the business growth have been the focus on a solution- centric approach to target customers, coverage and business discipline to overcome the macroeconomic situation. However, I strongly feel that each of the companies have grown by tweaking the way the business is done rather than working on specific growth drivers – especially in analytical industry since the technology has not changed significantly.
Within the LSCA division, which verticals have been growth leaders? What reasons would you attribute to the same?
We have been able to grow the business uniformly across our various product lines and the market segments we operate in. With the acquisition of Varian few years ago, Agilent has the entire portfolio of Spectroscopy under its product portfolio and we have been able to gain significant market share in this segment across markets. In terms of markets, with the government increasing its emphasis on food testing to implement the food law, the opportunities in this segment are quite encouraging. Owing to this, Agilent has been able to register significant gains in this market segment. As far as the challenges are concerned, food testing market is becoming more and more dependent on Government funding and this leads to uncertainty of release of funds and hence delays the procurement. Apart from this, Agilent continues to focus on the pharma, biopharma and material science markets.
Which products registered the highest sales in the pharma sector in 2013? What new products were launched in 2013?
For any analytical instrument company, a major chunk of business volume comes from Liquid Chromatography (LC); in line with this trend, Agilent has been able to perform extremely well in this segment. While there were a few product launches in Spectroscopy in 2013, including the revolutionary ‘Universal Measurement Solution’ but a number of products, relevant to the pharma market, were launched in early 2014. The new product introduction included industry leading 7900 ICP-MS, which find major applications in elemental analysis in pharma and clinical markets. We are expecting few more introductions for pharma applications in the coming months.
The last year has seen the industry beset by regulatory, pricing, IP and other such challenges. How have these impacted business for suppliers such as yours?
2013 has been a year of challenges with the macroeconomic situation in the country, the depreciation of Indian currency and the political scenario adding to the fray. These challenges have put pressure on the overall business objectives of the organisation. However, with consistent focus on customer support and development of market-specific applications we have been able to overcome these difficulties. The depreciating India rupee against the US dollar led to decreased profitability which was partially mitigated through discipline and prudence in expense management.
What are the challenges of operating in the Indian market? Have these eased out over the years? At the same time what new opportunities are being created since pharma is an industry in transition?
India continues to be a challenging market. Some of the factors particularly specific to analytical industry are poor payment behaviour, niche customer base and extremely stringent requirement and product specifications in tenders. All these factors have a significant commercial effect on our business and demand generation. The dynamic changes in funding for government institutions is another major challenge and the product purchase requests from this market segment are showing a downward trend. In order to confront these challenges Agilent has decided to increase its focus on the SME business segments. These have been untapped since most of the companies have been getting substantial chunk of their business from the established large pharma companies. However, with the economy on the downward spiral and stringent measures to improve productivity in these big companies, the procurement has slowed down. This has lead to looking for opportunities beyond and this is yielding positive results.
While as a company you cater to the industry, what percentage of the revenues comes from the academia (research labs, government institutions)? Has this increased over the years?
Agilent has been focusing on academia and research for quite some time now and due to this we have been able to enhance our contribution and market hold in this sector. Greater emphasis is being given to target business requirements that are initiated through tenders. The idea is to be there (with the customer) from the beginning. In contrast to institutions in the western countries, the academic and research institution in India are mostly government funded. Due to this reason, their terms and conditions can be quite demanding and can affect the profitability of the deal.
What drives innovation at Agilent? What unmet needs of the life sciences and pharma industry are yet to be realised/ being worked at the R&D level?
In Agilent, the investment in research and development is purely based on customer needs and demands. A major focus is laid on providing the customer solutions through market specific applications. This is clearly demonstrated through the investment in life sciences research centre in Bangalore. With the technology not changing much in the analytical industry, the need of the hour is to identify more number of molecules and new entities for analysis. This could be supported only by robust applications support and method development. Hence, it is important that the focus is made through solution needed by the customer rather than providing higher specifications of the instruments being sold.
What is the focus on training at Agilent?
Training is a major focus initiative for Agilent and we constantly invest in the development of training infrastructure and skill-building of our employees. We have two major centres of excellence situated in Bangalore and Manesar, Haryana. Our marketing team also makes regular investments in building the user’s knowledge and awareness about our products through workshops, training programs and on-site customer events.
What is going to be the focus for the LSCA division in 2014?
The focus area for 2014 is to expand the business geographically and vertically, enabling Agilent to reach newer geographies and SME segments and get ‘profitable growth’ for the company.