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VENTURES AFRICA – Indian pharmaceutical products exporters in Africa will soon get a relief on the cost of logistics as the country’s Pharma Export Promotion Council of India (Pharmexcil) wraps up plans to build a warehouse facility for its members in Lagos, Nigeria’s largest economic capital.
The scheme, set up with support from the Union Ministry of Commerce, will help Indian pharmaceutical companies with advanced security provisions, power back-up facilities, and internal logistics through approved agencies. It will also provide insurance services, bank remittances and subsidised rental for warehousing.
Access to government-supported subsidised warehousing facilities can reduce the costs by at least 40-50 percent,” Chirag Doshi, chairman of the Gujarat State Board of the Indian Drug Manufacturers Association (IDMA) said.
Speaking on the initiative, V Shah of Saga Laboratories, which exports oral dosage forms to countries in Africa, Latin America and the Commonwealth of Independent States, said “having a warehouse in Nigeria, somewhere near Lagos can be hugely beneficial for companies exporting to nearby countries.”
If the establishment of the Lagos warehouse proves successful, Pharmexcil will set up similar warehouses in other countries in Africa and Latin America,
In 2013, India’s Union Commerce Ministry had revealed plan to help the pharmaceutical exporters by setting up common warehouse facilities in some foreign countries so that small and medium scale drug makers can cut down on their expenses.
The Ministry had collected data from the industry on the possible steps to help the exporter and it was revealed that one of the difficulties faced by the SMEs was huge expenditure on using warehouses abroad.
Manufacturers in India assert that logistics accounts for over 35 percent of the total cost of producing pharmaceutical products.
“By using the warehouse of the Government, SMEs will be able to save up to 75 per cent of their rent expenditures and thereby improve the export performance,” Nipun Jain, SME Panel chief of Pharmexcil, had said when the initiative was first announced last year.
India is the biggest source for pharmaceutical products in Nigeria and these exports have grown over 30 per cent in the recent past following a signed memorandum of understanding on Cooperation in Pharmaceutical Sector in March 2011.