Telangana Pharma City An investors’ paradise

Kalvakuntla Taraka Rama Rao (KTR), Minister of Industries and Commerce, IT and Urban Development, Government of Telangana, in an interaction with Prathiba Raju, elucidates on how Telangana’s upcoming Pharma City will be a major boost for the Indian pharma industry

The Telangana government has listed pharmaceuticals as the top two priority sectors in its recently announced industrial policy. What are the reasons behind this?

KT Rama Rao

Telangana has 14 industrial thrust areas. For the city of Hyderabad, we have three important industries, number one being the pharma, second comes the Information Technology (IT) and third is the aerospace division. The reason why I put pharma in number one position is because, in this sector, Hyderabad is the capital of the entire life sciences industry — be it bulk drugs, chemicals or vaccines. The entire gamut of pharma is present in Hyderabad, for example more than one fifth of global vaccines are manufactured here and when it comes to pharmaceuticals, this city is where the core action is taking place. Today, a large number of pharma companies in the country, Dr Reddy’s Laboratories, Aurobindo Pharma, Mylan and Hy-Gro Chemicals Pharmtek, are based out of Hyderabad. We are proud of what the pharma industry has contributed to the city. That is the main reason why the government wants to make sure that we build a world class Pharma City in Telangana.

What is the current status of Telangana Pharma City?

We have already started the land acquisition process. Acquiring land after Land Acquisition Act 2013 has definitely been a difficult task, but fortunately we have completed acquiring 6000 acres and we are in the process of acquiring about 7000 to 8000 acres more. We are confident enough that it will happen on time. Pharma City will be a complete state-of-the-art world class facility. Master planning for this has been done by a Singapore-based company, Surbana Jurong. It is an infrastructure company, which takes up housing programmes in Singapore and provides infrastructure and public services. They have also developed many pharma parks across the world.

What are the unique features of this pharma city and how does it differ from many other existing pharma hubs?

The government is focused to build a Pharma City, which will have zero liquid discharge and state-of-the-art solid waste discharge. So, developing such a huge expanse of a full-fledged Pharma City is an exciting opportunity for us. We are looking forward to it with a great deal of optimism. Our government believes that it will take the Indian pharma industry to the next level. Apart from it, we are also into setting up a medical devices park and two electronic manufacturing clusters (EMC). Our government is focusing upon the medical devices park, electronic clusters and Pharma City, adding to it the Genome Valley. Hence, the whole combination and intersection of pharma, technology and lifesciences is prodigious. Soon, Hyderabad will be the digital healthcare capital of the country.

Your government has been taking unique initiatives to attract investors for the pharma city like road shows in the US. How do you work on this?

Being a new state, we are very upbeat and agile. We call ourselves the start-up state of India, think and act like a start-up. When it comes to promotion of our state, be it pharma or other sectors, we take innovative steps and reach out in a different way towards the bigwigs of the industry. As part of our promotion, our core areas where we are seeking investments would be pharma, healthcare, IT, aerospace and defence. Our strategy is to set up agencies in various parts of the world like two in North America, one each in the Middle East and Europe, the Far East and also possibly in Japan and Korea. The idea of setting up such a country desk is to promote and seek investment. For example, if I need investment in pharma, then my destination would be Europe, Singapore. Studies can be undertaken about the common effluent treatment plants and also seek large scale expertise and get investment opportunities from those countries. Thus, each of our country desk will be given a focus area and a task. This is how it is designed and strategised. We are also looking to tie up with different consultants for the same in North America, it could be McKinsey or EY. This will ensure that Telangana’s presence is felt across the world.

You have been asking for Rs 1500 crore from the central government for the Pharma City. What is the centre’s response on the same?

We sought the help of the Union Government to set up common effluent treatment plants. The government has come forward to help us and offer some support. However, we are not entirely dependent on the central government ‘s help. Our government is exploring options and looking out for Public Private Partnerships (PPP). In fact, we are talking to several large scale agencies which are engaged in such activities and many of them are interested. Our first round of discussions is already complete, so it will be a state and private sector partnership which will enable us in this task.

How much will be invested into the common effluent treatment plants, the main component of the pharma city?

Hyderabad pharma city has a total discharge capacity of 250 MLD. So, our effluent treatment plants should cater to it. However, it will be built in phases and not in one go. These will be built in three or four phases, each MLD will cost about Rs 10-15 crores.

Why are investors attracted towards Telangana?

The very first thing is the vision of our Chief Minister, KC Chandrasekar Rao, who asks us not only to focus on a specific sector, but also its various sub sectors. Carrying forward his vision, Telangana is the first state in the country which has come out with ten sub sectoral policies viz innovation, rural technology policies. These policies give lucid details on what to do, how to approach. In India, unless government backs it up with policies and legislation, things will not move. Therefore, our government is in the forefront of making progressive policies. Secondly, when it comes to ease, scale and quality of doing business, definitely Telangana is creating a new benchmark. Thirdly, Hyderabad is a cosmopolitan city with a large pool of human resources, good weather condition, availability of land, water and power, which naturally makes it an attractive composition. Adding to it, good governance and progressive policies make Hyderabad a perfect combination for investors.

Your comments on the ‘Make in India’ initiative?

As of now’, we import 17 per cent of our requirement, which needs to change. We should not Make in India for India but make it for other countries. The country should transform into an export hub because China is getting more and more expensive especially in labour costs. India is sitting on the cusp of á big opportunity as the workforce in India which is 64 per cent will keep growing and it will be the biggest in the world by 2020. The country can achieve excellence in manufacturing. ‘Make in India’ is a fantastic initiative. But the central government has to take more efforts and pull in different states, which are progressive into this process, or else things cannot deliver as quickly as expected.

When will the ‘Pharma City’ be functional? In next five years, how will it reshape the pharma industry in the country?

In 2018, the first phase will come up and the second phase should be completed by 2020. With its full capacity, it will be employing 1.5 million people directly and indirectly. This world-class facility will be a new benchmark in the country and will ease the process of setting up a pharma unit. Usually, there are challenges like environment clearances, public hearing and hurdles with US FDA clearances. Hence, if someone is looking to set up an enterprise in the pharma city, they shouldn’t need to get an environment clearance, as we have that for the whole facility and no need for a public hearing because the whole pharma city would be owned and run by the state itself. The US FDA will have a office inside the pharma city for easy access. Apart from it there will be a pharma university inside the facility. With human resources, exports, environment clearance and effluent treatments taken care of, the pharma city will be an investors’ paradise.