Project on Global Business Management

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                                        GLOBAL BUSINESS

                                       Mr. IMRAN ALI


                                    ABDULLAH MOHSIN 033

                                        BILAL AHMED 015

                             MEHMOOD AHMED TAHIR 031


                          EXECUTIVE SUMMARY

We were assigned to work on a project for global business management in which we had
to chose a certain industry in Pakistan and its performance in some specific field so we
had a look on Pakistan’s pharmaceutical industry in their trade with other countries.
During this process we came to know that in the pharmaceutical industry Pakistan has
always been lagging behind. Most of our pharmaceutical products come from India and
china. Although it is more convenient from these countries but still there is room for trade
with other countries. And Korea is one of the emerging countries in this field. To import
from a new market will be a new experience and opportunity for us to explore. Although
some of the small scale businesses are already importing fro these countries but they are
in small numbers. We collected this whole information through internet and prepared this
report to present it to our honorable Teacher.


                     TABLE OF CONTENT

  1. Introduction…..………………………………………………05
  2. Pharmaceutical Industry in Pakistan........……………………07
  3. Analysis and Disscussion……………......……………….…..07
  4. Pharmaceutical Companies in Pakistan……………………...08
  5. Direct Investment……..……………………………………..10
  6. Exporter…………….……....………………………………..10
  7. SWOT Analysis……..…...…………………………………..11
  8. Conclusion.………..………..………………………………..12
  9. Referances…..….……………………………………………13
  10.Tables & Figures…………………………………………….14


All human societies have medical beliefs that provide explanations for birth, death, and
disease. Throughout history, illness has been attributed to witchcraft, demons, adverse
astral influence, or the will of the gods. These ideas still retain some power, with faith
healing and shrines still used in some places, although the rise of scientific medicine over
the past millennium has altered or replaced many of the old beliefs.some of the stages
thorough which the process of curing illness has passed are as:

       Herbalism
       Indian medicine
       Egyptian medicine
       Babylonian medicine
       Persian medicine
       Chinese medicine
       Hebrew medicine
       Greco-Roman medicine
       Islamic medicine
       European Renaissance and Enlightenment medicine
       Modern medicine
       Medical inventions
       7000 BC—1000 AD
       1000—present

In this course the scientific medicines were introduced in the late 1800 and early 1900.
The modern techniques made some useful contribution to the field of medicine and now
almost every disease in the world can be cured with the help of these medicines. Asian
and African countries have always been faced by the shortage of medical facilities and if
there are any facilities it is far from the range of common man. That’s why we have to
import a lot of the necessary and important medicines from abroad or they are produced
by foreign firms in Pakistan we do not have any national company or resource from
where we can fulfill these necessities. Injections and vaccinations are one kind of
medicines which is used for quick relief. In recent years Asia specifically pacific Asia
and Korea, Japan has been the hub of export and import of all sorts of medical goods and
surgical commodities. Multiple reasons come into play for this recent change in the
international market. Cheaper labor rates, sound understanding of engineering excellence,
massive support systems to cater to the ongoing demands of the healthcare industry have
all attributed to the overall success of the healthcare industry especially for the Asian
countries. Korea is certainly no exception to the rule. Korea has become one of the
leading exporters of an array of medical goods that are now known for their exceptional
quality and engineering excellence. Korea is also a very sound economical play ground
for international investors and companies that want to use the skills sets of Korea to
improve and compete in different and new avenues. In countries like Pakistan where
there is extreme shortage of medical supply and even if there is availability of medicine
than their rates is reaching the shores of sky. Due to the shortage of investment in this

sector and improper conditions its better to import it from foreign countries. Korea as the
largest and cheapest producer of medicines and pharmaceutical products will be a better
market and will help us to fulfill our medical needs cheaper than other resources.
Pakistani market will be an opportunity for Korean products especially in pharmaceutical
industry. Pharmaceutical industry in South Korea is one of the emerging hotspots in
Asian region. Currently valued at US $ 8 billion, the domestic pharma sector has been
registering a double digit growth over the years. With the introduction of product patent
system in 1987, multinational companies have taken a firm foothold and continued to
expand      their    presence     in   Korea's    domestic      pharmaceutical     market.
Korea's efforts to provide medicines at affordable costs have led the industry to
innovation. The country developed pharmaceutical bulks via the development of its own
synthesis methods, making it possible to ensure the substitution of pharmaceutical raw
materials, nearly three and a half decades ago.

                 Trade Performance: Imports of Pakistan (2006, in USD thousands)

                            Import         Growth   Number of Number of Net trade
                            value          of       imported  supplying
Industry                                   imports  products  countries
                                           in value
                                           (% p.a.)
All industries              29,825,754 33               2881            159              -12,892,881

machinery;     nuclear 3,343,977           24           425             78               -3,231,029
reactors, etc
Miscellaneous          373,929             14           52              51               -362,410
chemical products
Pharmaceutical         244,408             14           23              46               -157,722

             Trade Performance: Exports of Korea (2002-2006, in USD thousands)

Product group                     Value           Value          Value          Value         Value
                                   2002            2003           2004           2005          2006
                                US$ '000        US$ '000       US$ '000       US$ '000      US$ '000

Medicinal             and     204,683       213,948           212,928        263,873      273,197
Medicaments(including         119,277       142,784           171,336        198,285      234,772
veterinary medicaments)
Miscellaneous chemical        564,069       658,411           767,584        913,996      1,139,891
Essential oils, perfume       2,811         3,548             4,597          4,544        4,239
and flavour materials


The Pharmaceutical Industry in Pakistan commenced its business operations a few years
after the country came into existence. With the passage of time most of the multinational
companies began manufacturing activities to cope with the requirement of quality drugs
and medicines for the rapidly increasing population in both wings of the country.

Presently the number of registered or licensed manufacturers in the country is close to
300 units out of which are 32 majority control multinationals and there are many joint
ventures with foreign collaboration. According to the IMS (International Market Survey)
the total pharmaceutical market in Pakistan in 1996 was valued at US$900 million which
grew at the rate of 20 per cent in 1996. The total world market for pharmaceuticals is
estimated to be about US$248 billion in 1994 out of which North America had a share of
33.5 per cent followed by Europe at 27 per cent and Japan 21.5 per cent. Pakistan's share
was about 0.3 per cent. The per capita consumption of pharmaceuticals is about US$4 in

Pakistan has a very vibrant and forward looking Pharma Industry. At the time of
independence in 1947, there was hardly any pharma industry in the country. Today
Pakistan has about 400 pharmaceutical manufacturing units including those operated by
25 multinationals present in the country. The Pakistan Pharmaceutical Industry meets
around 70% of the country's demand of Finished Medicine. The domestic pharma market,
in term of share market is almost evenly divided between the Nationals and the

The National pharma industry has shown a progressive growth over the years,
particularly over the last one decade. The industry has invested substantially to upgrade
itself in the last few years and today the majority industry is following Good
Manufacturing Practices (GMP), in accordance with the domestic as well as international
Guidance. Currently the industry has the capacity to manufacture a variety of product
ranging from simple pills to sophisticated Biotech, Oncology and Value Added Generic

Although Pakistan 's pharmaceutical and healthcare sectors are expanding and evolving
rapidly, about half the population has no access to modern medicines. Clearly this
presents an opportunity, but much more work needs to be done by the government and
industry's stakeholders. The value of pharmaceuticals sold in 2007 exceeded US$1.4bn,
which equates to per capita consumption of less than US$ 10 per year and value of
medicines sold is expected to exceed US$2.3 B by 2012.

Pakistan is a developing pharmaceutical market, with a large population and economic
progress evident, but per capita drug spending was rather low at around US$9.30 in 2007.
Private spending accounts for 65% of total healthcare expenditure sourced through out-of

pocket payments, international aid and religious or charitable institutions. Pharmaceutical
spending accounts for less than 1% of the country's GDP, comparable to levels in some
neighboring countries but above that in some of the South Asian countries. The forecast
period is likely to witness the marginal strengthening of the generics sector, albeit more
in terms of volumes than values. The share of generics is also likely to increase further as
major drugs come off-patent in the near term, to the likely benefit of the generics-
dominated local industry.

The Pakistan pharma industry is relatively young in the international markets with an
export turnover of over US$ 100 Million as of 2007. Pakistan Pharma Industry boasts of
quality producers and many units are approved by regulatory authorities all over the
world. Like domestic market the sales in international market have gone almost double
during last five years. The pharma industry is focusing to an Export Vision of USD 500
Million by 2013. In the meantime, exports are also likely to be boosted by new regional
and global opportunities.

The Pakistan Pharmaceutical Industry is a success story, providing high quality essential
drugs at affordable prices to Millions. Technologically, strong and self reliant National
Pharmaceutical Industry is not only playing a key role in promoting and sustaining
development in the vital field of medicine within the country, but is also well set to take
on the international markets.

There are many firms working in Pakistan in pharmaceutical industry. Some of them are
worlds leading firms such as GlaxoSmithKline, Getz, , Bristol-Myers Squibb, Searle etc.
in addition to these firms a lot of importer also import from US. Europe, china, Korea,
and India some the leading firms working in Pakistan and information related to them are
given as:

 GlaxoSmithKline
Headquartered in the UK and with operations based in the US, GSK is one of the industry
leaders, with an estimated seven per cent of the world's pharmaceutical market. But being
a leader brings responsibility. Every hour GSK spend more than £300,000 (US$562,000)
to find new medicines. GSK produce medicines that treat six major disease areas –
asthma, virus control, infections, mental health, diabetes and digestive conditions. In
addition, GSK are a leader in the important area of vaccines and are developing new
treatments for cancer.


Every second...GSK distribute more than 35 doses of vaccine

Every minute...more than 1,100 prescriptions are written for GSK products

Every hour...GSK spend more than £300,000 (US$562,000) to find new medicines

Every day...more than 200 million people around the world use a GSK brand toothbrush
or toothpaste

Every year...GSK factories produce 9 billion Tums tablets, 6 billion Panadol tablets and
600 million tubes of toothpaste

 Bristol-Myers Squibb

During 2007, the Bristol-Myers Squibb Patient Assistance Foundation and company-
sponsored programs under the Lifelines of Care initiative assisted more than 290,000
indigent patients in the U.S. in filling prescriptions with pharmaceuticals valued at more
than $236 million at wholesale prices.

Number of Employees: 42,000

Global Sales: $19.3 billion

Businesses: Pharmaceutical products.

 Searle Pakistan limited
Searle Pakistan Limited (SPL) was incorporated in Pakistan as a Private Limited
Company on October 5, 1965 as a subsidiary of G.D. Searle & Co., U.S.A.In 1966,
Searle Pakistan (Private) Limited acquired a small manufacturing facility in S.I.T.E. and
production of Aldactone, Lomotil, Diodoquin, Ovulen, Neomycin Sulphate, Probanthine
and Hydryllin, etc. started there. Over the years the operation expanded and during 1984
construction of a new factory started. During mid 1986 manufacturing operations of high
quality pharmaceutical products commenced at this newly built factory at Plot # F-319,
S.I.T.E. Area, Karachi, measuring 5.24 acres. The company employs 586 permanent staff
members including a dedicated sales force of 302 persons who call on doctors,
pharmacists, retail outlets and wholesalers to promote the company’s products. The sales
force is assisted by a team of 30 marketing support personnel.

Our main focus will be on the import of medicines and injections from Korea initially we
will focus on three types of injections then seeing the opportunity in the market we will
expand our area of business to other business too. Initially we can not take such big risk
and as budget constraints are also there so we have to really take care of that. We have
contacted two Korean companies who manufacture pharmaceutical products who are
contacted through our friends who have previously contact with these firms and have
good corporate relations who will also take care of the orders and delivery and any paper
work that is necessary for the contract. Membership with LCCI will be attained for which
the necessary requirements are fulfilled. Furthermore Letter of credit will also be attained
from National Bank of Pakistan.


Pakistan’s ranking according to the United Nations Commission for Trade and
Development (UNCTAD 2004) foreign direct investment potential index is 128th.
Political instability, lack of consistency of policies and poor law and order situation like
other sectors has significantly reduced investment in pharmaceutical sector. Despite
several trade liberalization measures like decontrolling the prices of several categories of
drugs, opening up the sector for competition etc yet there is no significant increase in
direct investment in this sector in recent years. Table 1(page 14), Figure 1 (page 15)
indicates the investment increase in pharmaceutical sector in last 6 years.

Out of 350 local pharmaceutical manufacturers only 35 are EPB registered exporter . The
total export volume of Pakistan for the fiscal year 2003-2004 was $12.1 billion. The share
of pharmaceutical exports in this total export volume is only $50.46 million (4.16%).
Table 2 (page 16) and Figure 2 (page 17) describes the pharmaceutical export volume of
Pakistan during the fiscal year 1997-2004. Recent trend in pharmaceutical exports is
positive. In recent 4 years the net increase is 24.17% which is significant. Keeping in
view of this pace and improvement in quality of products, export promotion bureau
government of Pakistan and PPEA must focus on the new markets especially the
potential market of LDC’s. France is a dominant player in the later markets. Following
Trade barriers have to be kept in mind during this export enhance drive. Each country’s
government strictly monitors pharmaceutical products. Testing, quality checks,
authorization are required before selling pharmaceuticals in these countries. All countries
are engaged in some kind of bilateral treaty with other countries. Relatively developed
African countries like, South Africa, Tunisia, Morocco, etc take the advantage of selling
their medicines in these countries. Due to Free Trade Agreement with EU (in most cases
effective from later this decade). European countries will be able to sell their products
without facing any tariff in some countries. Following are the suggestions to counter
these barriers. Looking at the disease profile in these countries, Pakistani companies may
give stress on selling specific medicines in specific market. For example selling tetanus
vaccine in Gabon, South Africa, Tanzania, etc. Medicines for Anemia might have a
market in Tanzania, Morocco, Algeria, Cameroon, etc. In Tanzania child malnutrition is
highest followed by Ivory Coast Cameroon etc. These countries may need medicines for
child health care. Countries like Zimbabwe, South Africa, Tanzania, Ivory Coast have
highest incidence of TB and thus have a market for TB medicines (FICCI 2004) Earlier
this year a group of local drug makers put forward a plan, entitled PharmaVision 2010, to
the export promotion bureau, which sought to increase domestic pharmaceutical exports
to $1bn by 2010.




   Cost effective technology
   Strong and well-developed manufacturing base
   Clinical research and trials
   Knowledge based, low- cost manpower in science & technology
   Proficiency in path-breaking research
   High-quality formulations and drugs
   High standards of purity
   Future growth driver
   Excellent clinical trial centers
   Chemical and process development competencies


   Low share in world pharmaceutical market
   Lack of strategic planning
   Fragmented capacities
   Low R&D investments
   Absence of association between institutes and industry
   Low healthcare expenditure
   Production of duplicate drugs


   Incredible export potential
   Increasing health consciousness
   New innovative therapeutic products
   Globalization
   Drug delivery system management
   Production of generic drugs
   Contract manufacturing
   Clinical trials & research
   Drug molecules


   Small number of discoveries
   Competition from MNCs
   Transformation of process patent to product patent (TRIPS)
   Outdated Sales and marketing methods
   Non-tariff barriers imposed by developed countries


The above project was really an opportunity for us to learn about the trade procedure.
Pakistan’s import has always been greater and most of which involves the import of oil.
In the pharmaceutical industry Pakistan has always been lagging behind. Most of our
pharmaceutical products come from India and china. Although it is more convenient
from these countries but still there is room for trade with other countries. And Korea is
one of the emerging countries in this field. To import from a new market will be a new
experience and opportunity for us to explore. Although some of the small scale
businesses are already importing fro these countries but they are in small numbers.
Initially it will be not good to take high risk but we are sure the increasing success of
this business will help us to explore more area of this field and broadened our area of
our business. In Pakistan the lack of technology and labor is a big issue and for this
industry both those things are required. So it is beneficial for us to import these items if
we don not have competitive advantage in this field. This will also increase the quality
of the products and lower the costs as in Korea both the technology and labor is
available at low cost.









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Description: Project on Global Business Management and the topic is Pharmaceutical Industry in Pakistan, Presented to Mr. Imran Ali