Indian empty capsule industry faces price challenge
The Indian capsule industry is in the grip of a crisis as gelatine manufacturers in the country are facing the dual challenge of raw material and labour shortage. Compounding the capsule makers’ problems is the threatened cost escalation of gelatine prices at 20 percent with one kilogram costing Rs. 600 as against Rs. 500 prior to the COVID-19 lockdown.
Gelatine users like ACG, Healthcaps, Sunil Healthcare, Natural Capsules among others are facing a major crisis and availability of over 30,000 formulations using gelatine capsules might be affected due to shortage of empty capsules, according to industry estimates.
“Over 85 per cent of the content of pharmaceutical capsules consists of gelatine, whose asking price is substantially higher as negotiations are on,” Ajit Singh, chairman, ACG Worldwide, Associated Capsules Group of Companies which is Asia’s largest capsule manufacturer told Pharmabiz.
Capsule manufacturers are looking at alternatives but the manufacturing cost of veg or hydroxypropyl methyl cellulose (HPMC) capsules is very high, added Singh.
India imports almost 50 per cent of its gelatine needs and the rest is manufactured in the country. Due to closure of ports and slow clearances of import shipments, both hard and soft capsule manufacturers in the country are facing a shortage. This will impact supplies to the formulation industry, noted Sunil Mundra, managing director, Natural Capsules.
Gelatine capsule makers are in a fix as the raw material sourcing facilities are shut due to the national lockdown. Further, stoppage of transport has also led to drastic reduction of access to the raw materials, added Mundra.
Ashok K Kapur, managing director, Narmada Gelatine and chairman, Ossein and Gelatine Manufacturers Association (OGMA), said that to produce one tonne of gelatine, 14 to 15 tonnes of raw material is needed. These include HCL, lime, among others. The gelatine industry’s recommendation to the government for import permits from neighbouring countries of Nepal, Sri Lanka and Bangladesh is still pending despite concerted efforts, added Kapur.
Import and domestic production
India imports 400 to 450 tonnes of gelatine per month. Domestic production under normal circumstances is at 16,000 to 16,500 tonnes a year. There are nine companies manufacturing gelatine. These are Nitta, Pioneer, India Gelatine, Sterling, Narmada, Rama Gelatine, Raymond Gelatine, Bhopal Gelatine and CJ Gelatine.
At present, Narmada Gelatine has an 18 to 20 per cent share of the total gelatine market in India.”None of our customers have suffered as their demand has been met for both April and May. However, the gelatin industry in the country is running at only 60 to 70 per cent capacity due to raw material shortage’, said Kapoor.
However, industry observers are hopeful that the gelatine price and the raw material shortage are temporary setbacks and feel that these issues will be sorted out.