The Indian Animal Health Market

Market Analysis

The animal health market in India is growing at about 15% per annum and was valued at approximately $193 million in 1999. The Indian Animal Market surveys the most important sectors of the Indian livestock and poultry industries, and the economically significant pests and diseases. The major products and their availability are discussed, and the major companies are profiled. In addition, the registration and regulatory environment is discussed in detail.

The Indian Animal Health Market will provide you with:

PUBLISHED: MARCH 2000
REF: SR192E
PAGES: 112
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CONTENTS
LIST OF TABLES
LIST OF FIGURES
EXECUTIVE SUMMARY


ES.1 Objectives
ES.2 Scope and methodology
ES.3 Contents
ES.3.1 Political and economic situation
ES.3.2 Agriculture and the animal health industry
ES.3.2.1 Companies
ES.3.2.2 Dairy and poultry
ES.3.2.3 Cattle and small ruminants
ES.3.2.4 Other


ABBREVIATIONS


CHAPTER 1 NATIONAL PROFILE
1.1 Political environment
1.2 Some economic indicators
1.2.1 India's per capita consumption levels
1.2.2 Gross domestic product and net national product
1.2.3 The role of agriculture in India's gross domestic product
1.2.4 Average land holdings
1.2.5 Future prospects
1.3 Government's approach to animal husbandry
1.4 Geography
1.5 Population


CHAPTER 2 THE STATISTICS


CHAPTER 3 THE LIVESTOCK AND POULTRY INDUSTRIES
3.1 Introduction
3.2 Cattle
3.2.1 Agricultural inter-relationship
3.2.2 Pattern of growth
3.2.3 Reasons for growth expectations
3.2.4 Increasing demand for milk and milk products
3.2.5 Likely future trends
3.2.5.1 Cattle
3.2.5.2 Farms
3.2.5.3 Dairy animals and milk
3.2.6 Export prospects for Indian milk products
3.3 Sheep and goats
3.3.1 Present status
3.3.2 Population distribution
3.3.3 Likely future trends
3.4 Dogs
3.4.1 Present status
3.5 Poultry industry
3.5.1 Present structure
3.5.2 Issues influencing growth
3.5.2.1 Volatile shifts
3.5.2.2 Feed quality
3.5.2.3 Multitude of hatcheries
3.5.3 Population estimates
3.5.4 Likely future trends
3.5.4.1 Hatcheries
3.5.4.2 Layer farms
3.5.4.3 Broiler farms
3.5.4.4 Large units
3.6 Export of animal products


CHAPTER 4 THE INDIAN ANIMAL HEALTH INDUSTRY
4.1 Current status
4.1.1 Market segments
4.1.2 Movement of products
4.1.3 Influences of purchase decisions
4.1.4 Market coverage
4.1.5 Ownership patterns in the animal health sector
4.1.5.1 Multinational corporations (public)
4.1.5.2 Multinational corporations (private)
4.1.5.3 Indian companies
4.2 Economically important diseases
4.2.1 Poultry disease update
4.3 Health schemes
4.4 Growth of products in different therapeutic groups
4.5 Product availability
4.6 Exports
4.7 Research and development
CHAPTER 5 PRODUCT REGISTRATION AND REGULATION
5.1 Introduction
5.2 Controlling bodies for product approval
5.2.1 Central Government
5.2.2 State Government
5.2.2.1 The Food and Drug Administration
5.3 Procedures for registration
5.3.1 Key registration requirements for a new product
5.3.2 Application procedure
5.4 Product protection and patents
5.4.1 Background
5.4.2 Current situation
5.4.2.1 Intellectual property rights
5.4.2.2 Reasons to support trade and legislation
5.4.3 Effects of signing the World Trade Organisation treaty
5.5 Harmonisation
5.6 Price control
5.6.1 Pricing norms for scheduled formulations
5.6.2 The Third Schedule
5.6.3 Drug Policy, 1994
5.7 Implications for the animal health industry


CHAPTER 6 COMPANY INFORMATION
6.1 Market access
6.2 Product introduction
6.2.1 Sourcing of products
6.2.2 Distribution
6.2.3 Market coverage for demand generation
6.2.4 Other important considerations
6.3 Main activities in the market
6.3.1 Market-related activities carried out by companies in each group
6.3.1.1 Multinational corporations
6.3.1.2 Large Indian companies
6.3.1.3 Small Indian companies
6.3.1.4 Government-owned enterprises
6.3.1.5 Local associates of multinational corporations
6.4 Changes influencing the industry
6.5 Key Indian animal health companies
6.5.1 Ambalal Sarabhai
6.5.2 Alembic Chemicals
6.5.3 Bayer India
6.5.4 Fort Dodge/Cyanamid
6.5.5 Glaxo India (Agrivet Farm Care)
6.5.6 Hoechst Roussel Vet
6.5.7 Nicholas Piramal
6.5.8 Novartis India
6.5.9 Pfizer India
6.5.10 Pharmacia & Upjohn
6.5.11 Prima Vet Care
6.5.12 Ranbaxy Laboratories
6.5.13 Rh�ne-Poulenc
6.5.14 Sanofi
6.5.15 Venkateshwara Group
6.5.16 Wockhardt
6.6 Ayurvedic medicine companies
6.6.1 Himalaya Drug
6.6.2 Dabur
6.6.3 Natural Remedies
6.7 Market coverage of the companies profiled


REFERENCES
APPENDIX I ICAR INSTITUTES CONDUCTING RESEARCH
A.1 ICAR institutes engaged in research in animal science and aquaculture
A.2 Project directorates and national research centres
A.3 All India co-ordinated research projects
APPENDIX II
A.1 Drugs and Cosmetics Act, 1940
A.2 Drugs and Cosmetics Rules, 1945


LIST OF TABLES
Table ES.1 Exchange rate of the Indian ruppe to the US dollar and UK pound, 1995-2000

Table 1.1 Comparison of Indian and international per capita nutritional consumption levels
Table 1.2 Comparisons of agriculture and economic life in India and elsewhere
Table 1.3 Average land holdings in India and elsewhere
Table 1.4 Pattern of five-year plan outlay in the public sector, Rs billion
Table 1.5 Target annual growth rate in the ninth plan - the agricultural sector by percentage
Table 1.6 Animal husbandry in India
Table 1.7 Area under cultivation (million Ha)

Table 2.1 Gross domestic product by major economic activities (at current prices)
Table 2.2 Gross domestic product at factor cost (agriculture/total)
Table 2.3 Distribution of land holdings, all India (1990-1991 census)
Table 2.4 Fertiliser consumption in selected countries
Table 2.5 Area, production and yield of food grains in India, 1970-1998
Table 2.6 Area, production and yield of food grains by Indian state, 1997-1998
Table 2.7 Per capita net availability of food grains in India, 1951-1998 (grams per day)
Table 2.8 India's population and the number of agricultural workers, 1951-2005
Table 2.9 Literacy rates in 1991 and economic productivity by state in 1996-1997

Table 3.1 Government plans for overall growth
Table 3.2 Target growth levels projected to be reached by 2011-2012
Table 3.3 Projected milk yields in 1998, 2005 and 2012 (million MT)
Table 3.4 Insurance of dairy animals, 1993-1998
Table 3.5 Trends in milk distribution, projected to 2005
Table 3.6 Projected share of milk and milk products in the organised sector, 2000-2005
Table 3.7 Ownership of sheep and goats, trends projected to 2005
Table 3.8 Population and size of herds of small ruminants (million heads), projected to 2005
Table 3.9 Poultry production costs (index with base of 100)
Table 3.10 Varying prices of poultry products, 1999
Table 3.11 Estimated poultry population, 1997-2000
Table 3.12 Revised estimated poultry population, 1998-2005
Table 3.13 Value of exports of animal products from India, 1993-1999 (Rs million)
Table 3.14 Value of animal product exports, projected to 2005 (Rs million)

Table 4.1 Value of the Indian animal health industry, 1970-2005
Table 4.2 Sales of animal health products by the top 21 companies in India, 1998
Table 4.3 Total market (sales value), 1998-2005
Table 4.4 Total market by product group, 1998
Table 4.5 Total market by product groups, 1999-2005
Table 4.6 Market share by product sector, 1998 and 2005 (projected)
Table 4.7 Important brands in the Indian animal health products market, 1998
Table 4.8 Regional consumption of animal health products, 1998 (percentage share)
Table 4.9 Field sales force and outlet coverage of major companies, 1998-1999
Table 4.10 Bacterial diseases in Gurgaon District, Haryana State
Table 4.11 Major disease outbreaks, 1993-2000
Table 4.12 Incidence rate of infectious bursal disease, 1996-1999
Table 4.13 Incidence rate of hydro pericardium syndrome, 1994-1995 and 1999-2000
Table 4.14 Incidence rate of Ranikhet disease - Newcastle disease, 1995-1996
Table 4.15 Other poultry diseases reported
Table 4.16 Diseases of economic importance
Table 4.17 Percentage growth of product sectors in different species groups, 1999-2005
Table 4.18 Regional presence of companies

Table 5.1 Average wages of unskilled and semi-skilled Indian workers in two sectors
Table 5.2 Effect of branding on pricing

Table 6.1 Key events in the Indian animal health industry, 1998-2000
Table 6.2 Ambalal Sarabhai's important products and product groups, 1998
Table 6.3 Ambalal Sarabhai's regional sales estimates, 1998
Table 6.4 Alembic Chemicals' important products and product groups, 1998
Table 6.5 Alembic Chemicals' regional sales estimates, 1998
Table 6.6 Fort Dodge/Cyanamid's important products and product groups, 1998
Table 6.7 Fort Dodge/Cyanamid's regional sales estimates, 1998
Table 6.8 Glaxo India's important products and product groups, 1998
Table 6.9 Glaxo India's regional sales estimates, 1998
Table 6.10 Hoechst Roussel Vet's important products and product groups, 1998
Table 6.11 Hoechst Roussel Vet's regional sales estimates, 1998
Table 6.12 Nicholas Piramal's important products and product groups, 1998
Table 6.13 Nicholas Piramal's regional sales estimates, 1998
Table 6.14 Novartis India's important products and product groups, 1998
Table 6.15 Novartis India's regional sales estimates, 1998
Table 6.16 Pfizer India's important products and product groups, 1998
Table 6.17 Pfizer India's regional sales estimates, 1998
Table 6.18 Prima Vet Care's important products and product groups, 1998
Table 6.19 Prima Vet Care's regional sales estimates, 1998
Table 6.20 Ranbaxy Laboratories' important products and product groups, 1998
Table 6.21 Ranbaxy Laboratories' regional sales estimates, 1998
Table 6.22 Venkateshwara Group's important products and product groups, 1998
Table 6.23 Venkateshwara Group's regional sales estimates, 1998
Table 6.24 Wockhardt's important products and product groups, 1998
Table 6.25 Wockhardt's regional sales estimates, 1998
Table 6.26 Dabur's important products and product groups, 1998
Table 6.27 Dabur's regional sales estimates, 1998
Table 6.28 Natural Remedies' important products and product groups, 1998
Table 6.29 Natural Remedies' regional sales estimates, 1998
Table 6.30 Market coverage of major companies, 1998 (Rs million)

LIST OF FIGURES
Figure 1.1 Growth of gross national product and net national product (at factor cost)
Figure 1.2 Growth of per capita net national product
Figure 1.3 Agricultural output at current prices
Figure 1.4 Agriculture share of gross domestic product
Figure 1.5 Government outlay on agriculture

Figure 3.1 Estimated export of animal products from India, 1998-1999

Figure 4.1 Market by product sectors, 1998
Figure 4.2 Projected market by product sectors, 2005
Figure 4.3 Total market by product group, 1998
Figure 4.4 Total projected market by product group, 2005
Figure 4.5 Poultry products - distribution channel
Figure 4.6 Veterinary products - distribution channel

Figure 5.1 Pricing illustration

Figure 6.1 Market leaders in the Indian animal health industry, 1998

EXECUTIVE SUMMARY
ES.1 Objectives
The objectives of this report on the Indian animal health market are four-fold:

ES.2 Scope and methodology
This report was written between October 1999 and December 1999. One of the major hurdles was obtaining reliable and consistent information. There was little available data on this subject matter and so primary research provided most of the information in this report. Because of the sparseness of published matter, some of the information gathered contradicted each other and did not often lead to an obvious conclusion. Meeting individually with industry experts, academics involved with the industry through universities, feed manufacturers and so on became an important part of the data-gathering process. The opinions expressed and information provided by them, along with in-house information and published data, have been collated for this report.

ES.3 Contents
Chapters 1 to 5 describe in detail many of the issues that impact on the Indian animal health market. The background political, geographical, economic and national situations in India affect the industry, and the following are some issues that need to be kept in mind.

ES.3.1 Political and economic situation
The national consensus in India seems to favour continuation of a democratic system of governance, despite many of its limitations. However, India is gradually emerging out of the political instability it went through during the second half of the 1990s, and two important articulated views exist. Firstly, regional aspirations of the country are now more sharply voiced.

This is through political orientation and, in the future, political coalitions rather than single parties will increasingly govern the nation. Secondly, aspects of economic development have almost completely been separated from the political ideology of single parties.

Since the early 1990s, the Indian economy has been functioning with reducing levels of state regulations and control. Therefore, the focus towards market-based operations is facilitating better access to Indian markets for many new entrants. For example: important legislation is being passed to ensure growth in many sectors of the economy, India is a signatory to the World Trade Organisation Treaty, and intellectual property rights will be enforced in line with international terms of reference, thereby encouraging foreign investment in India. However, legislation and regulations do exist to control and safeguard industry standards. For example, in India, any activity involving the import, manufacture, distribution and sale of drugs in the country is governed by the regulations of the Drugs And Cosmetics Act, 1940. The main object of the Act is to prevent adulteration of drugs and production of substandard and spurious drugs in order to ensure high standards of medical treatment and enhanced community health. All companies operating in the country need to comply with the required formalities.

Overall economic growth in India has been satisfactory during the last 20 years. The gross domestic product at current prices has grown since 1980/1981 at an annual rate of 15.4% while the per capita net national product during the same period had an annual growth of 13.1%. The per capita net national product is still very low in absolute figures, at Rs 13,193. The nutritional value of foodstuffs available to the population is also much lower than international norms. With such a low base and with a large population, there is vast scope for growth in the human and animal healthcare sectors.

ES.3.2 Agriculture and the animal health industry
Agriculture is still the major component of economic and employment activities (25% of the gross domestic product in 1997-1998). Indian agriculture is an economic synthesis of crop and cattle production. Small and marginal farmers own almost 80% of the total land holdings (amounting to about 32% of area cultivated). About 200 million people in India are engaged in agriculture, either as cultivators or farm labour, and the Government is giving a major thrust to developmental activities and towards enhancing efficiency in this industry. The industry is well dispersed and has good facilities for product formulation. With World Trade Organisation requirements being met, India can become a very efficient supply source for generic products at an economical level. This is an area of opportunity for exports to many other countries.

The animal health industry in India is predominantly made up of cattle and poultry sectors. The market share of dogs, small ruminants and other animals is at present not very significant. The industry has grown from an annual size of Rs 90 million in 1970 to around Rs 8,450 million in 1999. This represents an compound annual growth rate of 17% during this period. The market is projected to reach over Rs 17,000 million by 2005.

ES.3.2.1 Companies
Many changes have been brought about in the procedural requirements by simplification, and the general mood with the bureaucracy at present is to facilitate entry of new companies into the country. Animal health companies with differing structures - multinationals or their subsidiaries, joint venture companies and Indian companies - operate in the country. The top 20 companies account for about 85% of the market. The top six companies - Glaxo Wellcome, Hoechst, Pfizer, Sarabhai, Wokhardt and Venkateswara Group - along with their associates account for over 51% of the market. During 2000, about 200 companies are likely to be supplying animal healthcare products in India.

ES.3.2.2 Dairy and poultry
Opportunities for export of animal products during the coming 10 years appear bright with both the dairy and poultry sectors projecting surplus produce.

Dairying on the basis of a co-operative model, where the farmers are directly involved in the ownership and management of the enterprise, has been a great success in the country. India became the top milk producer in the world in 1998 with an estimated output of 78 million metric tonnes with a per capita availability of 220g per day. Native animal productivity, however, is low. It averages 445kg for cows and 811kg for buffaloes per lactation against a world average of 2,040kg for both cows and buffaloes. Important changes are taking place within the country to enhance productivity.


In the last 30 years the poultry sector has grown significantly to achieve an important status in India. Growth is visible not only in commercial volumes but also in overall progress, including the development of pure line breeds. It is estimated that in 1998 the poultry sector accounted for 44.5% of the market, with the large animals (cattle and other non-poultry animal groups) covering the rest. Based on growth assessment of these animal segments and also that of the different animal health product sectors, the percentage of the market in poultry will increase to 46.8% in the year 2005. However, the poultry sector has yet to reach stability in operations. It is highly volatile, going through unplanned and unstructured growth, with individual companies of any meaningful size being very secretive about their operations. Reliable information is very difficult to come by. Despite all this, poultry operations are well established and show growth rates in excess of 15% annually over sustained periods. The situation may improve marginally over time, but acceptable levels of transparency can not be expected. For animal health industry players, this industry will continue to be an enigma.


The poultry industry in India has periods of 'ups and downs' as production patterns do not match the consumption pattern. Although adequate infrastructure is available for distribution of end products, there is no marketing of these products. As a result, egg and broiler production is sometimes much higher than the consumption - leading to glut in the market and a drop in the selling price of these products, leading to losses to the farmers. This happens because large sections of the Indian population are vegetarian; added to this, India has many festivals during which the consumption of eggs and broilers dramatically reduces.


In terms of international ranking, India is fifth in production of eggs and nineteenth in production of broilers. Despite such growth, annual per capita consumption of eggs and meat in the country is low at approximately 33 eggs and 800g of meat. By international standards these levels are low. To achieve optimum levels, ie 180 eggs and 11kg meat per person annually (as recommended by the Indian Council of Medical Research), India will have to achieve quantum growth quickly.

Acceptance of new products in the poultry sector is very fast in comparison to the cattle sector, which is slow. Accordingly, the life cycle of the product in the poultry segment is short, while in the cattle segment it is long.

ES.3.2.3 Cattle and small ruminants
The cattle population is unlikely to grow in the next 10 years on account of controlled breeding, but the average output per animal will improve significantly.


Small ruminants, such as sheep and goats, and pets do not constitute a large market. Concerted efforts are being made to support the small ruminants sector as a sizeable population depends on it for its livelihood. The percentage growth during the next 10 years will be impressive, but in view of the low base, the quantity may not be very large. Both these are markets to watch for the future.


ES.3.2.4 Other
As a directional guideline, in the coming years the animal health sector will have a greater share of good quality feed additives, growth promoters, biologicals (such as vaccines and hormones) and vitamins. The focus is increasingly shifting to greater farm hygiene, more nutritional foods for the animals/birds and improved focus on preventive healthcare and biosecurity of farm animals (bringing down disease incidence and ensuring safety for human consumption). With this awareness, the curative medicine segment will show lesser growth percentages. Medicinal residues found in animal products like eggs, meat and milk for human consumption are becoming less acceptable.

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