Industrial park for pharma ingredients finally taking shape | The Daily Star
12:00 AM, October 13, 2017 / LAST MODIFIED: 12:00 AM, October 13, 2017

Industrial park for pharma ingredients finally taking shape

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The Active Pharmaceutical Ingredients (API) industrial park is finally taking shape nearly a decade after the scheme was taken up with the view to facilitating a steady supply of raw materials of drugs to reduce import dependency.

Recently, the developer of the park, Bangladesh Small and Cottage Industries Corporation, has asked the 27 pharmaceutical companies -- which include Square, Incepta, Globe, Opsonin, Beximco and Eskayef Bangladesh -- to complete all procedures and take possession of the 41 plots allotted to them in August.

“We will complete all procedures to take possession by this month,” said SM Shafiuzzaman, secretary general of the Bangladesh Association of Pharmaceutical Industries.

The companies will start construction of their plants once taking handover of the plots.

“We hope that some of us will start operation by 2019.”

The initiative to build the API Park by the Dhaka-Chittagong Highway under Gazaria upazila of Munshiganj for Tk 213 crore was taken in January 2008.

Originally supposed to be complete within five years, the construction of the complex was delayed for land acquisition and addition of new components to the project.

As a result, the project cost was revised upwards twice to Tk 332 crore, up 56 percent from original estimate.

It has been revised up again to Tk 364 crore based on recommendation from the planning ministry in June this year, said Abdul Bashet, project director of the industrial park.

But the final cost of the project is expected to rise when it is close to completion, according to the BSCIC.

Of the cost, Tk 80 crore will be needed for the effluent treatment Plant to be set up by BAPI, he said.

The cost has increased for incorporation of the construction of a 2,000-metre pipe to discharge treated water to Meghna River and a road, Bashet said, adding that they have sought an extension for the project's completion by another two years.

The industrial park is now expected to be complete in June 2020.

As of now, land acquisition and development, construction of other roads and power substation have been completed. “Now we have to ensure gas connection.” 

The establishment of the transmission line is delayed as Titas is demanding Tk 5.5 crore to set up connection, whereas Tk 3.5 crore is earmarked for the purpose.  All companies save for one has made advance payment for leasing the plots for 99 years.

The government is offering each acre of land for Tk 2.9 crore and entrepreneurs will have to pay the total in instalments over a ten-year period at 10 percent interest, he added.

The drug makers who have got plots will get 180 days to submit their factory layout plans, which the BSCIC will have to approve in one month.

“Then the construction works will begin,” he said, adding that 22,000 new jobs would be created through establishment of plants at the enclave. “This will reduce API imports,” Bashet added.

Several local firms such as Globe, Beximco, Square and Eskayef Bangladesh manufacture some APIs, and their production will increase gradually.

Yet domestic production is not enough to meet the demands of the pharmaceuticals industry, which manufactures about 8,000 generic drugs.

And more than 90 percent of the Tk 4,700 crore worth of raw materials are imported every year, according to a recent study by LR Global, an asset management firm.

As a result, the industry is vulnerable to external shocks, the report said, adding that local companies would be able to source at least half of their raw materials once the activities of the park start.

The park can open up the international API market to Bangladesh, said the report, which forecasts that Bangladesh's pharmaceutical sector can grow at 15 percent for the next five years riding on the expanded domestic market as well as new export frontiers. Greater affluence among the poorest socio-economic group and a shift in disease profile are expected to drive the growth of healthcare expenditure in Bangladesh, it said, citing the rise of non-communicable diseases and a gradual move from acute to chronic diseases.

Presently, Bangladesh's pharmaceutical industry meets 98 percent of the local demand and exports to 151 countries.

In fiscal 2015-16, total drug sales stood at Tk 15,600 crore, according to the report.

Pharmaceutical export rose 9 percent year-on-year to $89 million in fiscal 2016-17, according to the Export Promotion Bureau.

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