"European countries are less price competitive than India, where products are 33% to 35% cheaper than the world market. India is a suitable choice for manufacturing because of the added value for money. As far as quality is concerned, high quality must be established for this exchange to be functional."
Could you provide a brief introduction to DEFI and highlight its evolution since 2003?
DEFI Healthcare was established in 2003, when I returned to India from Russia, where I had lived for 10 years. DEFI began on a loan license manufacturing for various generic products, and we began marketing in Africa, Latin America, Central America and Russia, developing our own evaluation system for products to guarantee the highest standards of quality, at a time when Indian products did not enjoy the best reputation for quality globally.
Initially, we exported to UNICEF and the Red Cross through our partners in the UK and The Netherlands. From the UK, our products were distributed to different organizations. In the warehouse, we assembled a kit with several items including paracetamol, oral rehydration medicines and medicinal gloves, depending on the need. The products shipped required dossiers containing technical documents and registration information.
DEFI has developed an in-house design studio to create our own mono cartons, labels and files. We procure good quality raw material by sea and we ensure that any product sent under the DEFI brand name is synonymous with quality.
Could you elaborate on the product basket offered by DEFI and how does it meet global demand?
European countries are less price competitive than India, where products are 33% to 35% cheaper than the world market. The United Nations has a liaising office in Western Europe that provides aid to several developing countries and India is a suitable choice for manufacturing because of the added value for money. As far as quality is concerned, high quality must be established for this exchange to be functional.
In terms of specific products, aid kits typically require a variety of medication based on the needs of the country and its people. It is more cost effective to have a warehouse in a free trade zone in India and source the drugs and products locally and from countries such as China. We supply to global tenders and the private market as well.
What are some of the advantages of operating from Gujarat?
Gujarat is a manufacturing hub in India, such as Ahmedabad, Vadodara, Vapi and Ankleshwar. Ahmedabad itself is surrounded by various industrial parks and the Government is working on single window clearances in manufacturing zones, in and around the big hubs. Companies such as Zydus, Torrent and Sun Pharma value their base in Gujarat because the Commissioner of Gujarat is proactive and industry-friendly; moreover, there are nearby ports which are not as congested as in Mumbai, for example. There is ease of access and plenty of infrastructure in terms of trucks, airplanes and vessels that can transport products quickly. The Government of Gujarat is supportive of entrepreneurs and has created free zones within the state. Gujarat also has the highest number of FDA approved facilities.
How can dual pressures on price and quality be reconciled in the context of Indian manufacturing?
In my experience, the quality of the product should override the importance of price. While maintaining affordability, we invest our profits into researching and developing new molecules and drugs. Price control is beneficial to the population but, if companies are not profitable, they cannot conduct R&D and develop new molecules to fight new diseases. In such cases, we would need to license solutions patented by foreign companies. The country needs money to file its own patents to develop new molecules for the market.
Besides DEFI, you are starting a new company called Derren. What has motivated this new project?
We are establishing a new manufacturing company, namely Derren Healthcare, that will incorporate new production systems with the aim of obtaining US FDA approval. This facility will manufacture products for export as well as the domestic market. In terms of our business model, we will be able to contract manufacture for big players and manufacture for DEFI as well. We have a foreign partner for whom we will manufacture high quality small volume parenteral drugs.
The plant is 40,000 square feet and we are incorporating the latest technology that will be sustainable for the next 10 to 15 years. We are incorporating equipment to fit a small exhibit batch as well as large commercial batches, making the facility suitable for foreign and domestic clients to take the exhibit and commercial batches from one location.
What is your message for our readership?
India is a big challenger in the global pharmaceutical market. Foreign companies can find good investing opportunities in India thanks to low manufacturing costs, affordable human capital and rising quality standards. Communication and logistics are no longer a barrier for international business.