Vertical integration has been the key to the success of various industrial groups and MNCs across the globe. India’s Pharma industry has a healthy vertical model in place. Keeping this in mind, one can safely assume that the Pharma- Nutra convergence is not just a must, but, in all probability a reality.
The Nutraceutical Task Force and India’s Nutra Inc, have set a 100 BN target to be achieved by 2030.
Many of the top industry leaders are of the firm belief that this target is achievable through pharma-nutra convergence and to some extent, the pandemic has paved the way for such convergence. However, one of the key elements required to make the convergence a seamless one is vertical integration.
” There is need for a high level of integrated production to ensure that nutrition and profits are both sustainable,” Sanjay Mariawala said.
One of the reasons why the integration of Nutra with Pharma is quintessential is because, the convergence builds up a vertically integrated business model of development. Right from sourcing of raw material to product development, delivery, customer feedback and provision of enabling services, would be made possible through this convergence.
Mr. Dhawal said, ” Companies go, where the demand is,” However, bit is only those companies, which have a vertically integrated network, which will run the long race.
One of the finest and first major examples of an integrated business model was that of Ford, the Motor giant. It was this model that prepared them for the task of not just manufacturing cars, but also the world’s largest ever fleet of bombers built, during World War -2.
This vertical integration model, helped them not only scale up but also mass produce war planes on an industrial scale. The model also combines quality control and assurance with scale. Keeping this in mind, it should not come as a surprise if the Pharma giants of India, conquer the Nutra space.
Agro scale up required for raw material consistency: India is without doubt, the most agro- diverse region / country in the world, which gives the farmers of the region to grow a varied number of crops.This natural advantage is without doubt a huge boon to the Nutraceutical industry in the country and if properly tapped into, could well lay the road for India’s 100 BN Dollar Dream.
While this may be true, the micro scale land holdings in India could prove to be a major disadvantage as the farming techniques used as usually, subsistence level techniques, with absolutely no room for mechanised scale up.
One of the main reasons for such small holdings is the Agriculture Land ceiling Act, which us still here to stay for a while.
However, the Act is a deterrent
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