Nicholas Piramal India Limited
Content
ASSIGNMENT ON SALES AND DISTRIBUTION CHANNEL OF NICHOLAS PIRAMAL PHARMACEUTICAL PVT.LTD
SUBMITTED TO:
SUBMITTED BY:
DR.RESHMA NASREEN
MOHD SHADAB KHAN MOHD JAVED ZAKIR VARUN JAGLAN
NICHOLAS PIRAMAL INDIA LIMITED COMPANY BACKGROUND Nicholas Piramal India Limited (NPIL) came into existence in 1988 when the company Nicholas Laboratories was acquired from Aspro Nicholas by the Mumbai-based Piramal family. In 1991, NPIL commissioned a new manufacturing plant to add to,the existing two plants, which were small and considerably outdated. The new plant was built to comply with US FDA standards to allow NPIL access the huge generics market in the US as well as increase its credibility with potential partners in order to attract post -GATT product licensing agreements. Over the years NPIL has grown to become a market leader in the Indian pharma industry through a series of well-managed acquisitions, mergers and alliances. The first acquisition was that of Roche Products in 1993, with NPIL retaining the right to manufacture and distribute all existing and new Roche products under the Roche brand name. The second acquisition was that of Boehringer Mannheim India, subsidiary of Boehringer Mannheim AG (BM) of Germany, in 1996.This gave NPIL access to all research products of BM Germany, for launch in India in the areas of pharma, diagnostics as well as biotechnology. Some of the major acquisitions made by the company thereafter include Hoechst Marrion Roussel's Research Centre, Rhone Poulenc India Ltd., ICI India Ltd.'s pharma division and Boot¶s OTC brand Lacto Calamine.The company¶s strategic intent has been to position itself as a partner of choice for global drug companies that want to leverage India¶s low manufacturing cost advantage. Its core strength lies in its joint ventures and alliances with some of the key global players in the industry which include F.Hoffmann-La Roche Ltd (Switzerland),Allergan Inc.(USA), Boots Plc (UK), Gilead Sciences (USA) and Cheissi (Italy).
NPIL has formed a joint venture with Boots named Boots Piramal Healthcare Pvt Ltd, for over-the counter (OTC) products. NPIL has 49 per cent stake in this venture, which markets and distributes NPIL¶s OTC brands like Polycrol, Lacto Calamine, Saridon, Strepsils and Clearasil .Another important alliance is with Allergan India, in which NPIL has 49 per cent stake. Its product range is targeted at the ophthalmology market for diseases lik e glaucoma,ocular surface disease/dry eye and introducing new surgical products (particularly small incision cataract surgery),NPIL has a 100 per cent stake in two pathology laboratories - NPIL Diagnostic Laboratories Pvt. Limited (Kolkata, West Bengal) and Dr. Phadke Pathology Laboratory & Infertility Centre Pvt, Limited (Mumbai, Maharashtra).These labs offer a wide range of pathology investigation
tests,
which
include
immunology
tests,
haematology,
microbiology, infertility investigations and histopatholo gy examinations, The company¶s promoters, the Piramal family, hold the majority stake in NPIL (50.4 per cent).The next largest shareholder is the Indian public (with 13.1 per cent stake) followed by foreign institutional investors (with 13.2 per cent stake ). Foreign companies, domestic financial institutions, private corporate bodies and non-resident Indians hold the residual shares.
Products and brands NPIL has business expertise in the areas of bulk drug manufacture for domestic and export markets, speciality labs and chemicals and formulation development. Formulations constitute more than 65 per cent of gross sales. Details of the products are as follows:
Domestic Formulations business:
These include products in various therapeutic categories ± analgesic / antiinflammatory, antibiotics, anti fungal, antihistamines, antiseptics, Cardiovascular, central nervous system, diabetes, dermatology, endocrinology, gastro-enteritis, multivitamins / nutraceuticals, oncology, Pulmonary / respiratory and trauma / emergency.
International Formulations business:
This focuses on anaesthetic and parenteral products used in operating rooms and critical care units. It currently manufactures and exports inhalation anaesthetic (Halothane and Isoflurane) and plasma volume expander (Polygeline). In addition, through a licensing agreement with AstraZeneca,NPIL also manufactures and exports Tetmosol, a monosurfuram soap, which is an anti scabies in selected markets.
Diagnostics Division:
NPIL is the leader in the field of in-vitro diagnostics with its state-of-the art equipment and kits, in the fields of clinical chemistry, immunology diagnosis, haematology diagnosis and rapid diagnostics. It also offers Diagnostic tools in the fields of diabetes care, cardiac care and urinalysis.
Vitamins and fine chemicals:
NPIL is a leading supplier of vitamins and fine chemicals used extensively in human and animal nutrition and health businesses. NPIL owns some of the well-known brands in the pharma business. Its top 10 brands, Phensedyl,Haemaccel, Stemetil, Gardenal, Pentids,Tixylix,Phenergon, Paraxin, Sorbitrate and Gentycin contribute around 29 per cent of its revenues.
SALES AND DISTRIBUTION IN NICHOLAS PIRAMAL INDIA LIMITED Nicholas Piramal India Limited (NPIL) is India's fourth largest pharmaceutical company with significant joint ventures /alliances/partnerships and a sales turnover of $ 313 million (Rs 14.1 billion) in 2005-09. The company's growth was mostly driven by strategy of partnerships, quality acquisitions, brand building and manufacturing India is a geographically diverse country with extreme climates that make distribution a critical function. The long channel of distribution and high incidence of brand substitution makes it mandatory for a company to make all its stock keeping units (SKUs) available at all levels at all times. In India, most brands have generic versions of drugs and retailers can usually obtain higher margins with generics than for branded products. To reduce risks of substitution, innovator companies must make sure their products are made available to the stockists and retail shops. Drug distribution in India has witnessed a paradigm shift. Before 1990, pharmaceutical companies used a different distribution system, in which they established their own depots and Warehouses that now have been replaced by clearing and forwarding agents (CFAs). These organizations are primarily responsible for maintaining storage (stock) of the company¶s products and forwarding SKUs to the stockist on request. Most companies keep 1±3 CFAs in each Indian state. On an average, a company may work with a total of 25±35 CFAs. Unlike a CFA that can handle the stock of one company, a stockist (distributor) can simultaneously handle more than one company (usually, 5±15 depending on the city area), and may go up to even 30±50 different manufacturers.
Channels of drug distribution of Nicholas piramal pharmaceuticals in New Delhi Chennai
Hyderabad
(Manufacturing unit)
(Manufacturing units)
CARRYING AND FORWARDING AGENT (CNF) Healthmax Pharma Mr. Anil Kumar 320, Vardhaman City Center, Near Shakti Nag ar Flyover New Delhi - 110 052 (INDIA) Tel : +(91)-(11)-3645516/3644432/9810209876
DISTRIBUTORS
RONAK ENTREPRISES
VINYAK ENTERPRISES JVS PHARMA
enterprises, pharma distributer 2 floor, narina ring road New Delhi. Ph no- 29523236 29531298
(B JVS pharma polt 54-A
(F-20 kirti nagar
New Delhi-15)
shop number 3 janakpuri New Delhi-64)
Retailer/chemists Retailers
Retailers
The stockist, in turn, after 30±45 days (a typical creditor time limit) pays for the products directly in the name of the pharmaceutical company. The CFAs are paid by the company yearly, once or twice, on a basis of the percentage of total turnover of products. In 2009, the market size of Nicholas piramal pharmaceutical logistics segment (distribution) was valued at around $28 million and the logistics/distribution industry has been growing at an average annual growth rate of 4% since 2002. According to the Indian Retail Druggists and Chemists Association, in 1978, there were roughly 10,000 distributors and 125,000 retail pharmacies in India. Today, the total number of stockists of Nicholas piramal in India is around 450.
PROCESS OF SELLING
Process of selling Obtaining demand
Prospecting
Promoting
Servicing demand Bulk Assortment
Storage
Credit & Service
Availability
Feedback
CRITERIA OF SELECTION FOR C & F AND STOCKIST
E
ential
Criteria
Inve t ent
Area of
Capacity
control
Attitu e
Reputation
Financial tren th
Situational Criteria Stora e pace
Location
Infra tructure
Capa ility
Channel evaluation -concept
Effectivene
Delivery of tock to eet e an y partner
Sti ulation of e an to reach the opti u
level
Sale Force
Influences of Functional areas
Sales
ertise ent
force
anage
ent
hannel anage
ent
Challenges of Distribution in Nicholas primal On the supply chain management (SCM) front, NPIL's major challenge is to integrate its Indian and international businesses. Transportation of goods and inventory management are two areas the company is trying for further improvement. With the implementatio n of SCM, the company has achieved significant changes in the domestic market.
Results
With better utilisation of SCM practices, NPIL significantly achieved the following results. On the material front, NPIL has 28 depots and spends eight lakh to 10 lakh on information communication. Within six months of the SCM applications, the company has been able to reduce materials inventory from 40 percent to 25 percent, which is much lower than the industry's average. On the supply side, NPIL deliberately used source materials from a reasonable number of suppliers to reduce the risk factors and the company shifted to a single window. This decision of the company has allowed a gain in bargaining power and reduced prices by five to ten percent. At the same time, to improve the service quality, the company has also reduced the number of transporters and reduced the delivery time. This move of the company has led to a clear improvement in quality and delivery of products. This example highlights the significance of SCM in pharma industry. Pharma companies worldwide have started using this technique to improve the entire functional process. SCM has helped pharma companies to enhance their efficiency in managing resources and improving relationships.
SUBMITTED TO:
SUBMITTED BY:
DR.RESHMA NASREEN
MOHD SHADAB KHAN MOHD JAVED ZAKIR VARUN JAGLAN
NICHOLAS PIRAMAL INDIA LIMITED COMPANY BACKGROUND Nicholas Piramal India Limited (NPIL) came into existence in 1988 when the company Nicholas Laboratories was acquired from Aspro Nicholas by the Mumbai-based Piramal family. In 1991, NPIL commissioned a new manufacturing plant to add to,the existing two plants, which were small and considerably outdated. The new plant was built to comply with US FDA standards to allow NPIL access the huge generics market in the US as well as increase its credibility with potential partners in order to attract post -GATT product licensing agreements. Over the years NPIL has grown to become a market leader in the Indian pharma industry through a series of well-managed acquisitions, mergers and alliances. The first acquisition was that of Roche Products in 1993, with NPIL retaining the right to manufacture and distribute all existing and new Roche products under the Roche brand name. The second acquisition was that of Boehringer Mannheim India, subsidiary of Boehringer Mannheim AG (BM) of Germany, in 1996.This gave NPIL access to all research products of BM Germany, for launch in India in the areas of pharma, diagnostics as well as biotechnology. Some of the major acquisitions made by the company thereafter include Hoechst Marrion Roussel's Research Centre, Rhone Poulenc India Ltd., ICI India Ltd.'s pharma division and Boot¶s OTC brand Lacto Calamine.The company¶s strategic intent has been to position itself as a partner of choice for global drug companies that want to leverage India¶s low manufacturing cost advantage. Its core strength lies in its joint ventures and alliances with some of the key global players in the industry which include F.Hoffmann-La Roche Ltd (Switzerland),Allergan Inc.(USA), Boots Plc (UK), Gilead Sciences (USA) and Cheissi (Italy).
NPIL has formed a joint venture with Boots named Boots Piramal Healthcare Pvt Ltd, for over-the counter (OTC) products. NPIL has 49 per cent stake in this venture, which markets and distributes NPIL¶s OTC brands like Polycrol, Lacto Calamine, Saridon, Strepsils and Clearasil .Another important alliance is with Allergan India, in which NPIL has 49 per cent stake. Its product range is targeted at the ophthalmology market for diseases lik e glaucoma,ocular surface disease/dry eye and introducing new surgical products (particularly small incision cataract surgery),NPIL has a 100 per cent stake in two pathology laboratories - NPIL Diagnostic Laboratories Pvt. Limited (Kolkata, West Bengal) and Dr. Phadke Pathology Laboratory & Infertility Centre Pvt, Limited (Mumbai, Maharashtra).These labs offer a wide range of pathology investigation
tests,
which
include
immunology
tests,
haematology,
microbiology, infertility investigations and histopatholo gy examinations, The company¶s promoters, the Piramal family, hold the majority stake in NPIL (50.4 per cent).The next largest shareholder is the Indian public (with 13.1 per cent stake) followed by foreign institutional investors (with 13.2 per cent stake ). Foreign companies, domestic financial institutions, private corporate bodies and non-resident Indians hold the residual shares.
Products and brands NPIL has business expertise in the areas of bulk drug manufacture for domestic and export markets, speciality labs and chemicals and formulation development. Formulations constitute more than 65 per cent of gross sales. Details of the products are as follows:
Domestic Formulations business:
These include products in various therapeutic categories ± analgesic / antiinflammatory, antibiotics, anti fungal, antihistamines, antiseptics, Cardiovascular, central nervous system, diabetes, dermatology, endocrinology, gastro-enteritis, multivitamins / nutraceuticals, oncology, Pulmonary / respiratory and trauma / emergency.
International Formulations business:
This focuses on anaesthetic and parenteral products used in operating rooms and critical care units. It currently manufactures and exports inhalation anaesthetic (Halothane and Isoflurane) and plasma volume expander (Polygeline). In addition, through a licensing agreement with AstraZeneca,NPIL also manufactures and exports Tetmosol, a monosurfuram soap, which is an anti scabies in selected markets.
Diagnostics Division:
NPIL is the leader in the field of in-vitro diagnostics with its state-of-the art equipment and kits, in the fields of clinical chemistry, immunology diagnosis, haematology diagnosis and rapid diagnostics. It also offers Diagnostic tools in the fields of diabetes care, cardiac care and urinalysis.
Vitamins and fine chemicals:
NPIL is a leading supplier of vitamins and fine chemicals used extensively in human and animal nutrition and health businesses. NPIL owns some of the well-known brands in the pharma business. Its top 10 brands, Phensedyl,Haemaccel, Stemetil, Gardenal, Pentids,Tixylix,Phenergon, Paraxin, Sorbitrate and Gentycin contribute around 29 per cent of its revenues.
SALES AND DISTRIBUTION IN NICHOLAS PIRAMAL INDIA LIMITED Nicholas Piramal India Limited (NPIL) is India's fourth largest pharmaceutical company with significant joint ventures /alliances/partnerships and a sales turnover of $ 313 million (Rs 14.1 billion) in 2005-09. The company's growth was mostly driven by strategy of partnerships, quality acquisitions, brand building and manufacturing India is a geographically diverse country with extreme climates that make distribution a critical function. The long channel of distribution and high incidence of brand substitution makes it mandatory for a company to make all its stock keeping units (SKUs) available at all levels at all times. In India, most brands have generic versions of drugs and retailers can usually obtain higher margins with generics than for branded products. To reduce risks of substitution, innovator companies must make sure their products are made available to the stockists and retail shops. Drug distribution in India has witnessed a paradigm shift. Before 1990, pharmaceutical companies used a different distribution system, in which they established their own depots and Warehouses that now have been replaced by clearing and forwarding agents (CFAs). These organizations are primarily responsible for maintaining storage (stock) of the company¶s products and forwarding SKUs to the stockist on request. Most companies keep 1±3 CFAs in each Indian state. On an average, a company may work with a total of 25±35 CFAs. Unlike a CFA that can handle the stock of one company, a stockist (distributor) can simultaneously handle more than one company (usually, 5±15 depending on the city area), and may go up to even 30±50 different manufacturers.
Channels of drug distribution of Nicholas piramal pharmaceuticals in New Delhi Chennai
Hyderabad
(Manufacturing unit)
(Manufacturing units)
CARRYING AND FORWARDING AGENT (CNF) Healthmax Pharma Mr. Anil Kumar 320, Vardhaman City Center, Near Shakti Nag ar Flyover New Delhi - 110 052 (INDIA) Tel : +(91)-(11)-3645516/3644432/9810209876
DISTRIBUTORS
RONAK ENTREPRISES
VINYAK ENTERPRISES JVS PHARMA
enterprises, pharma distributer 2 floor, narina ring road New Delhi. Ph no- 29523236 29531298
(B JVS pharma polt 54-A
(F-20 kirti nagar
New Delhi-15)
shop number 3 janakpuri New Delhi-64)
Retailer/chemists Retailers
Retailers
The stockist, in turn, after 30±45 days (a typical creditor time limit) pays for the products directly in the name of the pharmaceutical company. The CFAs are paid by the company yearly, once or twice, on a basis of the percentage of total turnover of products. In 2009, the market size of Nicholas piramal pharmaceutical logistics segment (distribution) was valued at around $28 million and the logistics/distribution industry has been growing at an average annual growth rate of 4% since 2002. According to the Indian Retail Druggists and Chemists Association, in 1978, there were roughly 10,000 distributors and 125,000 retail pharmacies in India. Today, the total number of stockists of Nicholas piramal in India is around 450.
PROCESS OF SELLING
Process of selling Obtaining demand
Prospecting
Promoting
Servicing demand Bulk Assortment
Storage
Credit & Service
Availability
Feedback
CRITERIA OF SELECTION FOR C & F AND STOCKIST
E
ential
Criteria
Inve t ent
Area of
Capacity
control
Attitu e
Reputation
Financial tren th
Situational Criteria Stora e pace
Location
Infra tructure
Capa ility
Channel evaluation -concept
Effectivene
Delivery of tock to eet e an y partner
Sti ulation of e an to reach the opti u
level
Sale Force
Influences of Functional areas
Sales
ertise ent
force
anage
ent
hannel anage
ent
Challenges of Distribution in Nicholas primal On the supply chain management (SCM) front, NPIL's major challenge is to integrate its Indian and international businesses. Transportation of goods and inventory management are two areas the company is trying for further improvement. With the implementatio n of SCM, the company has achieved significant changes in the domestic market.
Results
With better utilisation of SCM practices, NPIL significantly achieved the following results. On the material front, NPIL has 28 depots and spends eight lakh to 10 lakh on information communication. Within six months of the SCM applications, the company has been able to reduce materials inventory from 40 percent to 25 percent, which is much lower than the industry's average. On the supply side, NPIL deliberately used source materials from a reasonable number of suppliers to reduce the risk factors and the company shifted to a single window. This decision of the company has allowed a gain in bargaining power and reduced prices by five to ten percent. At the same time, to improve the service quality, the company has also reduced the number of transporters and reduced the delivery time. This move of the company has led to a clear improvement in quality and delivery of products. This example highlights the significance of SCM in pharma industry. Pharma companies worldwide have started using this technique to improve the entire functional process. SCM has helped pharma companies to enhance their efficiency in managing resources and improving relationships.
