India's Leading Animal Health Cos: Good Past, Great Future
Large populations, increasing discretionary spending on account of rising incomes and a relatively stable economic and regulatory environment are typical characteristics of an emerging market.
The animal health industry in India is witness to, as well as beneficiary of, these trends. It is attracting a number of local and international companies, who want to invest and gain from the high growth afforded by this industry.
For an industry which started shaping up in the early 1970s as an extension of human healthcare, it is now a matter of pride to have a few standalone animal health companies.
High-growth rate and low-entry barriers are additional factors in attracting a number of entrepreneurs to Indian animal health. At around $500 Million (in 2013), the animal health industry in India may not be large compared to global standards, but it offers good scope for the future.
Lack of authentic, published data – typical characteristic of an emerging market – is in play here, hence this attempt to profile leading animal health companies in India and decipher their key strategies.
For the sake of simplicity, I have categorized the companies into three categories. This list does not include certain local and international firms focused only on feed, enzymes, amino acids/vitamins, feed additives and pet foods.
International animal health companies
This list includes local businesses from the global top 10 – Zoetis, MSD Animal Health, Merial, Elanco, Bayer Animal Health, Boehringer Ingelheim Vetmedica, Novartis Animal Health (since acquired by Elanco), Ceva Santé Animale, Virbac and Vétoquinol.
While Virbac (Agrivet Farm Care Division), Vétoquinol (Wockhardt Animal Health) and recently Merial (Dosch Animal Health) have entered India via local acquisitions, all other players have grown organically or benefitted from their respective international acquisitions and mergers, with the exception of Zoetis (Vetnex, formerly Ranbaxy Animal Health) which has made a local acquisition as well.
Strong competition from local Indian businesses has ensured that almost all international companies operating in India adapt their global strategies, portfolios and processes to suit local market needs.
Large field force, locally-relevant portfolios, local/contractual manufacturing and small pack sizes with India-specific pricing – this sums up the strategies adopted by almost all international animal health companies in India.
To overcome the limitations of limited portfolios – many international firms market a number of locally-developed and manufactured branded generics or 'second brands' as illustrated:
Local animal health companies
Despite intense competition from international businesses as well as other new, local entrants, this group of prominent domestic companies has constantly evolved to stay relevant and remain segment leaders in many areas.
This list of only few leading local animal health companies includes: (not per rank):
Indian Immunologicals, Sarabhai Zydus, Venkys India, Intas Animal Health, Alembic Animal Health, Vetkind, Sequent Scientific and Cadila Animal Health
Leading herbal products companies such Indian Herbs, Natural Remedies, Himalaya Drugs and Ayurvet
Few, largely poultry companies such as Hester Biosciences, Indovax and Globion
Lastly, a few livestock-focused firms such as Brilliants Biopharmaceuticals, Biovet Limited and BV Biologicals
Key strategies adopted by almost all local animal health companies could be summarized as:
Portfolio: Broad and deep product portfolio with 'basket approach' e.g. a single company offering all categories of antibiotics such as Tetracyclines, Beta-Lactums, Fluroquinolones and Cephalosporins etc.
Production – Though human pharma arms of some comapnies have own manufacturing, virtually all local firms now get their portfolios manufactured at third-party locations for speed and cost savings
People – Large field force with many having adopted species-wise sales team or even therapeutic segment-wise sales team approach
Processes – Leading firms have excelled at good, innovative marketing activities to maintain and grow market shares. Effective product lifecycle management is another key success factor
A few of the companies in this list have made local and even global acquisitions and I believe this trend could only strengthen
Provincial/regional animal health companies
Relatively overlooked is the third category of local animal health companies and, on account of their expected future contribution, it is important to have a brief discussion about this list as well.
This list includes firms which operate at the regional and provincial levels in India and are primarily active only in institutional supplies, on a tender basis to provincial or federal Animal Husbandry Departments and Dairy Co-operatives.
Around 15% of the local animal health products market is institutional business since Provincial/Federal Governments and Co-ops offer free/subsidized veterinary care – a number of regional/provincial companies exist to participate in this business.
Largely generic portfolios with low levels of innovation are the characteristics of these companies.
Increasing industrialization in livestock, growing integration in poultry, steady growth in aquaculture and higher spends in companion animals segment, ensure all leading international as well as local Indian companies will continue to invest in India, apart from potential entry of new players.
Past has been Good; Future Looks Great!