Tale of a local Pharma Man

Let’s begin with a snapshot of Jammu &Kashmir pharmaceutical industry.  Experts say J&K is loaded withhuge potential to become a hub for pharmaceutical industries in India. Aresearch report – Pharmaceutical Sector: The untapped potential of J&K –prepared by an agency EY, pegs it as a rapidly growing sector at a faster pace.The agency has quoted policy support, existing ecosystem, abundant intellectualmanpower, large domestic market and access to largest markets as the advantagesJammu & Kashmir has in the pharmaceutical sector.

As far as J&K Industrial Policy 2016 isconcerned, it has identified pharmaceuticals as thrust sector and offersattractive incentives for investors.  It lists existing ecosystem asa hub of leading Indian pharma companies such a Lupin, Sun Pharma and CadilaPharma. The agency has  estimated that Jammu & Kashmir occupies4% of north Indian market and 1% of Indian pharmaceutical market with a marketvalue of Rs. 1300 crore and growing at 8% per annum.

   

But the statement of facts put in theresearch report are not matching the ground realities and Jammu & Kashmiris yet to build on its pharma base. Greater Kashmir Business Editor talkedto a local veteran pharma industrialist, Kumar Wanchoo, who established apharmaceutical manufacturing unit four decades ago, to know the scope of pharmaentrepreneurship in J&K. Having a huge experience of over 40 years in thepharmaceutical trade and manufacturing, he expressed astonishment when he, afew months back, first time came to know that in JK Industrial Policy 2016pharmaceuticals sector is mentioned as a thrust sector! Where is the thrust? Hequestions.

Even as we tried to keep our interaction withKumar Wanchoo around pharma sector in J&K, he dished out more about generalindustrial scenario in J&K and the guidelines which a local entrepreneurshould take into account while pursuing entrepreneurship. He shared his journeyas an industrialist and as an entrepreneur. 

Excerpts of the interaction:

Would you like to share details of your journey as an industrialist in pharmaceutical sector?

I developed a passion for entrepreneurshipin pharmaceutical sector during my college days. I was in pharma distributiontrade when I was a student. I went to Ahmadabad, visited some pharmalaboratories and my passion further cropped up. In the year 1978, State Bank ofIndia in Kashmir started an entrepreneurship training programme. I also appliedand was among among the 25 selected for the programme. IBCON Ahmadabad and SBIjointly conducted the training programme for one month at MLA hostel Srinagar.It was one of the best programmes where we were told about finance, production,marketing and all ins and outs of industry in detail were discussed. A lot ofwritten material was also given to us and this programme gave us real conceptof industry.

20 out of 25 candidates initiated to set upindustrial units in Kashmir as well as in Jammu. I was one among them. I starteda project report on formulation of pharma products – liquid/ tabs/ capsules.This journey was for passion of self-reliance of our state and employmentgeneration and strengthening the economy of the state.

So I started a pharmaceutical manufacturingunit under the name and style Eaton. We started production in 1981. JKSFC andBank of India sanctioned loan to the tune of Rs.7.95 lacs for fixed assets andRs.5.25 for working capital. I started from Kashmir and went to Jammu, Punjab,Haryana and parts of Utter Pradesh.

First couple of years were very tough. Butwe crossed the breakeven in 1988. We could have expanded to other states butunfortunately in 1990 we had to stop for a year resulting in closure of ouroperations outside Kashmir.

We restarted the unit in 1991 andconcentrated on J&K because due to financial constraints we could notrestart operations outside J&K. Till date from 1991 we are operating onlyin J&K and have generated employment.

What are your future plans? 

See, by the grace of God, I have paid allloans and no liabilities are pending against me as on date.

But I have decided to quit. 

Why quit?

Unfortunately now I feel that the policiesof the government have not been encouraging. After putting almost 40 years ofmy precious life in the field, I have come to the conclusion that thegovernment policies have always been bureaucratic and the government neverconsulted entrepreneurs or their associates in framing policies which wouldhave resulted in encouragement to entrepreneurs for setting up industrialunits. For example, excise relief for setting up units in J&K state didn’thelp the local entrepreneurs. Those operating outside J&K have establishedunits in Jammu to avail excise relief while as a local unit should have been encouraged. 

Very recently I came to know that 2016industrial policy envisages pharma is a thrust area which can generateemployment. Till date we don’t see a single pharma unit established. Governmentnever bothered to check why local units are not participating in setting uppharma units in J&K.

According to me, the incentives for settingup pharma units in J&K should have been made area specific. For example,establishing unit in Kupwara and other similar far-off locations should havebeen incentivized. Giving a general incentive to establish unit at the choiceof investor’s location doesn’t serve purpose. It has become a big disadvantageto the local industrialists 

You mean policies are not encouraging for local industries?

Yes. You will be surprised to know that atpresent a unit of 40 years old and a fresh unit is on same page which does notallow the fresh units to progress and be remunerative. 80 percent of ourindustrial units don’t have Rs.1 Cr turnover. While as a fruit-seller on thestreets too has a turnover of Rs. 1 Cr and even more.

The departments connected with industriesnever work in coordination. An environment has been built around industriesplatform that people focus more on grabbing subsidies than running theindustrial unit successfully. There should have been production-incentivizedsubsidies. Subsidies are misused. Corruption is to such an extent that unitholders don’t get their due share.

Flaws in industrial policies have turnedindustrial units as one-man show. No proper training given to unit holders. EDIshould get survey done to map the impact of their schemes in the market. I amsure they will get disappointed.

There should have been marketing supportfrom the government to the industrial unit for at least three years to strike abreakeven. There should have been facilitation from the government whichdirectly is related to health, quality and corruption-free culture. Industrialscenario is confronted with corruption, victimization, and Kashmiri put againstKashmiri. Precisely, policies have always been anti- industries.

Take the case of industrial estates. Wehave huge fixed investment in these industrial estates. How many units we whichproduce a product? There is no attraction for unit holders to generateemployment.

I remember that Dr. Haseeb Drabu, aschairman of J&K Bank, suggested having a data about industrial units inJ&K. But it never took off. He was ready to assist. Local businessorganizations were supposed to prepare a data base to frame a policy in future,but it didn’t happen.

Entrepreneur deserves respect in society aswell as in government, which has been lacking and never recognized.

What are the tips for young ones to become successful entrepreneur or an industrialist?

The person running the industry shouldnecessarily be well versed with production, HR development, sales. Financialmanagement is very important. You cannot use even one rupee of loan fornon-production purpose. Use working capital for raw material and have rawmaterial in abundance

Marketing position is very important. Sothe activity one is taking up should have scope. Precisely, 

First learn management of finance

Survey market

Prepare DPR on real assessment withoutkeeping in mind how much subsidy he is getting and ask the government for 3years sales support.

Never start a unit under financialconstraints.

Ensure loans are spent on the basis ofunits viability

Goal should be fixed.

Manufacture a quality product which can besold anywhere

Be unit focused. Raw material is importantbecause it will product something on a day.

Upgrade the unit as per market requirement.Upgradation is part and parcel of the unit

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