Indian operations are strategically very important for Uhlmann
Klaus Braig, Director Sales, Uhlmann Pac-Systeme Germany and Sumeet Arora, Managing Director, Uhlmann India speak to Viveka Roychowdhury on the German company’s strategy to make up for lost time in India
What are the trends in pharmaceutical packaging for 2019 and beyond?
Arora: Uhlmann is amongst the most respected names in pharmaceutical packaging technology. We have been catering largely to the customised and high automation packaging requirements. Our clientele would typically include large local and MNC pharma companies who have their own proprietary drugs and require fast, reliable and tailor-made packaging solutions. With over 10,000 installations worldwide during the last 70 years, we have been a close partner to the pharma industry globally.
In the recent times, we observe a definite shift in the trend in pharma industry – both in territories as well as the technologies. Geographically, the focus of the global pharma industry for manufacturing is shifting to the Eastern part of the world: India, China, Philippines, Indonesia, Bangladesh, etc. these are the new pharma manufacturing hubs. This is largely owing to the fact that we offer much attractive operational costs as compared to the Western world. Additionally, there is ample trained manpower available. In the last few years, India has emerged as a significant contract manufacturing hub. In technologies, digitalisation has revolutionised the pharma industry with widespread understanding and usage of Electronic Batch Recording systems, Scada software, Industry 4.0, Track & Track, Artificial Intelligence solutions in the packaging industry. Uhlmann, as I informed, has been the first choice for clients pursuing higher level of automation in customised packaging solutions. Which is why we found very few buyers in India some years ago and hence it took a while for us to enter this part of the world. However, in recent years, more and more high automation and customised solutions are being sought by the Indian pharma industry and hence Uhlmann started its journey in India and opened its Pune office in 2016.
And as India is a contract manufacturing destination, companies need to change from one product to another in a very short time. And here comes the big plus of Uhlmann’s experience and design knowledge. All of our equipment is made for quick and tool-less (no Allen keys, no spanners) change over, ergonomic design, etc. Beside that, Uhlmann India can provide the parts as this is now localised.
What is India’s share of Uhlmann’s global revenues?
Braig: As Sumeet explained, we had a very late entry into the India market as the pharma companies did not see the additional benefit of having more reliable and more advanced technology than needed. This seems to change now also due change in the legislation but also in the mindset of the people.
We also can see a dramatic change in the business models of our ‘classical’ customers. Eight out of 10 new drugs are now so called biotech or biosimilar products which are mainly produced in sterile or lyophilised form. Hence, the classical oral dose will be produced and packed elsewhere. The absolute number/volume is still increasing but the actual sales price is decreasing, the so called cost per good sold is becoming much more important. This results that the usually known ‘low cost countries’ who produce more and more of this volume are beginning to realise this impact and look more into higher grade of automation as well into more efficient equipment.
We are confident there is place for us in the market because the pharma industry here in India are producing more for the MNC or even selling directly into the regulated markets. They realise that if they invest in modern technologies, they have a better yield and better output performance.
The regulators too have more confidence when they come for inspections. In a nutshell, Indian Operations are strategically very important for us. Along with the high level of automation software solutions become more important. Ten years back, Uhlmann was one of the first one offering a full Track & Trace solution from the smallest sellable unit with full aggregation down to the pallet and seamless interfacing with higher ranking platforms such as ERP or MES systems. Based on that we derived more and more software products in order to increase the safety in the pharma industry but also to increase efficiency. Uhlmann can offer the customer complete turnkey solutions for packaging and track and trace throughout the entire product chain.
India has always been a very price conscious market but pharma companies are now aspiring to use bigger equipment brands like Uhlmann. How do you make your value proposition to prospective pharma customers in India, given that Uhlmann India’s machines will be more expensive than locally made equipment?
Braig: We have this discussion very often and more so in India. While on one side the capex cost of the equipment is more, more customers are looking at the total cost of ownership. Which is not just the cost of the equipment, but also the running cost, cost of consumables, up-time required, the cost and availability of spare parts, after sales service etc. The total cost of ownership is a big discussion nowadays and our aim is to educate our customers to the need to see the full picture. They don’t just have one production line for one product for one year, but they can run that line for the next 15-20 years. So, who can maintain, supply spare parts, who can keep the machines updated and re validated instead of buying new machines. Very few companies can offer these kinds of services. For example, one of our pharma customers in India has one of our machines which has been running for 43 years, giving the same productivity! That’s the value that we bring.
Arora: A few years back, Uhlmann invested in a facility in the north of China. We spent a couple of years elevating that plant up to Uhlmann standards using engineers, technicians, programmers from Germany. We created a model which has the same class, technology and reliability as Uhlmann but with a distinct price advantage. This is the machine we displayed at PMEC India 2018 . This is how we wish to come closer to the market in this part of the world: bringing the German Technology at Asian Price points. We have already started investing in our Asian subcontinent. The Management Board has approved building of the format parts locally in India to meet the customers’ requirement. The plant has already been conceptualised and manufacturing will start this year.