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Government should concentrate efforts to install basic chemical plant.

Dr. Tariq Siddiqui, Chief Executive, EPLA Laboratories (Pvt) Ltd. highlights the performance of local Pharmaceutical Industry and suggests measure for improvements.

Economic Review: How do you compare the performance of local pharmaceutical industry with multinational organisations in Pakistan.

Dr. Tariq Siddiqui: At one time the multinational companies were overwhelmingly dominating the market with a share of over 90 per cent. The role of local industry was negligible. Now things have changed altogether. The local pharmaceutical industry has captured market around 35 to 40 per cent and within 2 or 3 years our share is likely to be equal. We are in the expansion phase. Foreign investors today prefer to work with local manufacturers. Our products are comparable with multinational in quality despite all odds. We are proud to say that we are better than many multinationals in various respects. EPLA got the 'Presidential Award for Good Manufacturing Practices' (GMP) on merit.

GMP maintained by some multinational is not as good as exhibited by the big local manufacturer. We have also developed good expertise. We have our own Research and Development Wing which monitors quality and performance internally and externally under different market conditions. We are successfully competing with multinationals. The difference is that we lack finances to have renowned representatives abroad who could hold seminars to introduce and promote our products. Secondly, the turnover of multinational is quite substantial. The additional facility which the multinationals possess is the modern equipment which is being transferred to them by their principals from abroad after being declared as obsolete at their end at exorbitant price. The cost is not being paid by the company here and that is adjusted in transfer price in contrary to that we have to purchase machinery at a higher cost for our needs. Government provides no incentive in this regard. The national pharmaceuticals in order to compete has no priority in getting financial loans.

ER: The pricing policy has been liberalised by the Government. How does it affect your operation?

TS: It is quite an encouraging step. The pharmaceutical industry was at the verge of collapse. We stopped production of some of our products. Some products were close to closure. We were continuously reducing our work force including managers and other officers. We were actually in the contracting phase and were unable to meet losses though we were working quite economically. The multinationals too were undergoing the similar phase. Deregulation of prices is a blessing in disguise for the pharmaceutical industry which has also reduced the bureaucratic controls. Our injection section was closed for renovation. Now we will be able to meet the renovation budget and restart injectables on modern lines. Due to increase in prices we will be able to participate in big tenders as well.

ER: The prices of drugs have become high and beyond the common man's reach. Don't you think it will effect your sales.

TS: In my opinion the government should have decreased taxes and other duties. The prices of input Raw/Packaging materials should have been controlled including taxes before the control of Finished Products Prices. There was a constant pressure due to devaluation which was to be wiped out. The cost of production was on the rise. Some financial measures were necessary to protect industry. But increase in prices is not likely to promote the interest of the company, it may produce negative results in view of poverty in the country and decreased purchasing power.

ER: Do you have any expansion programme.

TS: After price deregulation we have taken up the expansion programmes. The injectable section which was closed earlier is in the reopening process. We are also increasing the capsuling capacity. Plans are underway to invest more on expansion programme this year under Balancing and Modernisation.

ER: Do you export your products. What measures do you suggest to promote it.

TS: Yes, we have recently exported a numbers of products to Sudan. The dilemma is that we do not get any facility or rebate from government. Our competitors are mainly India and China. Indian government gives substantial rebate to the exporters along with other facilities. Exports can be enhanced provided government takes some bold initiatives. Unfortunately our Pharmaceutical industry is still dependent on the imported raw material. We do not manufacture basic chemicals because there is no Plant in our country. Though it needs huge investment even then Government should concentrate its efforts to install a Basic-Chemical plant in the country. A financial rebate of 20 per cent in any form is required for the Pharma Industry to meet International competition.

ER: Do you think that the climate is conducive for foreign investment in Pakistan.

TS: Present conditions are not conducive for foreign investment. There is a political vacuum in the country. Under the prevailing conditions foreign investor cannot plan things because political and economical conditions are rapidly changing along with government controls and policies.

ER: How will you comment on Labour-Management relations in your organisation.

TS: At present we have a sizeable workforce and a bonafide unions. The Management relations are good in the sense that there is no visible confrontation or dispute. The labour laws, however, need amendments particularly in pharmaceutical industry where we are strictly instructed by the Health Ministry to maintain the high standard of productions. This is not possible unless the workers do not cooperate. In case of a sub-standard product or any unwanted thing found in the ampoules or liquids the management should not alone be held responsible.

The production process is a joint venture of the workers and management and is quite inter related. Under the existing labour laws management cannot hold the workers accountable in case of a fault on their part in maintaining the quality. It is suggested in case of such a problem the concerned workers who worked on the batch must also be chargesheeted and held accountable.
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Title Annotation:interview with EPLA Laboratories Pvt. Ltd. CEO Tariq Siddiqui
Publication:Economic Review
Article Type:Interview
Date:Aug 1, 1993
Words:978
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