Chapter V : Case Studies of Selected Biotechnology

Companies
5.0 Introduction 145

5.1 Indian Biotech Business 146

5.2 Biotech Companies in India- Analytical 157

Overview

5.3 Case Studies- Indian Biotech Companies 172

53ABIOCON LIMITED. 175

5.3.2 SERUM INSTITUTE OF INDIA LTD. 181

5.3.3 WOCKHARDTLIMITED. 190

5.3.4 MAHARASHTRA HYBRID SEED 194

COMPANYLTD.

5.4 Conclusion 203

 Chapter V
Case Studies of Selected Biotechnology Companies

5.0 Introduction

The global overview in terms of historical growth, extent of

spread and socio economic effects of biotech business was taken in

chapter II. There it was seen that the United States of America is the

leader and next in line are Canada and UK in Europe. India is in the Asia

Pacific region where the biotech business is emerging and the

contribution of Asia Pacific region to biotech revenue and employment at

global level suggested that the biotech business in this region is in infant

stage. In the beginning of the overview, in chapter II, scientific basics of

biotechnology, definition of biotechnology and biotechnology business,

special features of biotechnology, main applications of biotechnology,

sectorial categorization or classification etc. was also discussed. Against

this backdrop, the Indian biotech scenario, and case studies of few

biotechnology companies are presented in detail in this chapter.

In the context of present study the Indian policy front for

biotechnology, with apex institutions formed by government and their

funding pattern is discussed. These government initiatives are discussed

with a focus on HR parameters and after that the performance parameters

of industries in India are discussed using the case study approach. This

information for the period 2000- 2003 is discussed with relevant

numerical data, analysis using percentile graphs, comparison of year

145
wise employment number, turnover and composition of employees as per

educational qualifications is also discussed. This provides a good

background in terms of Indian scenario of biotechnology business at

macro level. So as to go from macro level understanding to micro level

understanding, case studies of four industries in this sector representing

Bio Pharma, Bio Pharma + Industrial, Agricultural biotech are presented

with relevant information and analysis for the purpose of elucidating

inferences about Human Resource Management issues. As acceptable in

the inductive method the inferences which have drawn using these case

studies become applicable to biotechnology businesses, more particularly

in India.

5.1 Indian Biotech Business^

In the global biotech market, Indian share in 2003 was just about

2% however; the future seems very bright for the country. Biotechnology

is a fast emerging sector in India. The consumption of biotech products

in India was $ 1789 million during 1999, which is expected to grow to

the tune of $4270 million by the end of year 2010.

5.1.1 Indian initiatives for biotechnology business^ -

Industry and academic institution's collaboration activity and

foreign collaborations by Indian companies has received a major boost

after 2000. These alliances involve contract research and manufacturing,

co-marketing, technology transfer and joint Research & Development

(R&D) agreements.

146
 India is emerging as a partner of choice for several American

and European companies because they are facing resource constraints.

One of the ways for them for increasing productivity is to develop

collaboration with companies with resources at a lower cost. Indian

technical manpower is high quality and is available at relatively low cost.

Several Indian companies have managed to cross IPR hurdles to work

with international partners through confidentiality and non-disclosure

agreements. The effective implementation of the WTO mandated product

patent regime on the anvil will facilitate change in perception. In the

wake of the new IPR regime, partnering is equally an imperative for

Indian companies because they are pursuing a resource-intensive,

product-driven model for sustainable growth. Indian biotech companies

had initially copied the information technology sector's service based

model to earn early revenues. India's major biopharmaceutical

companies are now accelerating efforts to get bioequivalent versions of

patented, well-characterized recombinant proteins onto the market before

2005. The small biotech companies are focusing on innovative research,

and are picking niches where there is little competition. Bioinformatics

companies are other players who are benefiting from an intellectual

property driven model.

According to Ernst and Young (market reports 2002- 2005), the

market for generic biotech products will increase over the next few years,

as many products will be coming off patent. India is emerging as major

147
player in the development of a global market for bio-generics. India has

positioned to take advantage of moves by Governments in the U.S. and

Europe to create a regulatory framework for approving generic versions

of successful protein drugs. Several new sources of capital and

government policy changes will also benefit the Indian industry. These

include allowing insurance companies to invest in biotech venture funds

and the Indian government's decision to raise the cap for foreign

investment. This will make it easier for foreign venture capitalists to

invest in Indian biotech companies. Biotech has been relatively new

ground for the Indian venture capital community, though there have been

some initiatives like the APIDC fund launched last year. Andhra

Pradesh Industrial Development Corporation Limited was established on

16th December 1960, by the Government of Andhra Pradesh for planned

development of medium and large-scale industries in the state. Today, it

has an authorized capital of Rs. 110 Crores and paid up capital of Rs.

96.23 Crores. APIDC offers a wide range of financial and consulting

services. Services include but are not limited to Project promotion -

Generation and Implementation of New Project Ideas, Guidance and

Comprehensive Escort Service to the Entrepreneurs, Participation in

Equity Capital, Providing Term Loans, Providing Bill Discounting

Facility, Providing Guarantees, Merchant Banking, Venture capital Fund

for IT, BT Industry. This is a very good example of state government

initiative and therefore has been quoted. There is also an announcement

148
by the Department of Biotechnology and the Technology Development

Board to launch funds.

Biotechnology is knowledge and skill based industry and India's

rich human capital is believed to be the strongest asset for this. India is

having a large English speaking skill base,

• 3 million graduates,

• 700,000 postgraduates and

• 1500 PhDs qualified in biosciences and engineering.

• 10% of researchers and 15% of scientists in

Pharma/Biotech R & D in USA are of Indian origin.

This human capital situation is represented graphically (fig. 5.1)

for the purpose of analysis in this and further chapters.

Fig. 5.1 Human Capital Percentage Distribution- Educational

Human Capital Percentage Distribution

Ph.D.
PostGrduates 1%
18% ^"^"^^^

Graduates
81%

149
 The above discussion indicates that Biotech industry in India at

present is at a threshold of tremendous growth. As can be seen from the

human capital situation pie chart, the number of candidates having

Ph.D.'s qualified in biosciences and related engineering for research and

manufacturing has to significantly increase. Some of the important

features presenting evolution of Indian biotech industries are highlighted

below.

5.1.2 Milestones- the first decade

• 1978 - Country's first biotech company BIOCON- for industrial

enzymes

• 1981 - Center for Cellular & Molecular biology (CCMB) - for

DNA and rDNA based research.

• 1984 - Institute for Microbial technology, (IMTECH) -for R&D

in microbial bio-processing.

• 1986 - Department of Biotechnology (DBT), set up by

Government of India -for promoting biotechnology at academic

and industry levels.

• 1987 - National Institute of Immunology (Nil) for immunology

research.

• 1989 - Bangalore Genei starts operations to produce restriction

enzymes & other tools for DNA based R & D .

150
 5.1.3 Milestones - the second decade

• 1991 - National Center for Biological Sciences (NCBS) - to

pursue R & D molecular biology.

• 1994 - Syngene International, Country's first CRC (Contract

Research Company) Promoted by Biocon to offer R&D

services in drug discovery based on modem biology

• 1997 - Center for Biochemical Technology (CBT) to focus on

Bioinformatics and Genomics.

• 1997 - Shantha Biotech launches India's first recombinant

product, Hep B vaccine.

• 1998 - Monsanto research established an R & D center at IISc for

plant genomics.

• 1998 - DBT approves Mahyco-Monsanto to conduct Bt cotton

trials.

5.1.4 Milestones- the third decade

• 2000 - Four states, Andhra Pradesh, Karnataka, Maharashtra

and Tamil Nadu announce biotech initiatives.

• 2000 - Country's first bioinformatics company Strand Genomics

formed by four IISc professors.

• 2000 - GENOMED, country's first JV between Institute (CBT) &

Industry (Nicholas Piramal) to pursue pharmaco-genomics.

151
 • 2001 - NCBS scientists sets up Avesthagen a plant genomics

company.

• 2001 - GEAC approves Wockhardt's E PO.

• 2001 - NIH approves NCBS and Reliance Life Sciences as 2 out

of 10 labs world wide, for stem cell lines

• 2001- Drug Authority implements GCP(Good Clinical Practices)

guidelines for clinical trials.

• 2001 - Millennium biotech policy, the first state level biotech

policy, announced by Government of Kamataka.

• 2002 - Institute of Bioinformatics & Applied Biotechnology a

jointly funded initiative between Government of Kamataka &

ICICI commences academic program.

• 2002 - GEAC approves Shantha biotech's interferon Alpha 2b.

• 2002 - GEAC approves Bt cotton commercial planting.

5.1.5 The biotechnology policy in India

The business sector in India has been developed through planned

effort using the implementation of policies through several five years

plans. For the growth of any new industry, new infrastructure, plant and

machinery, equipment and instruments, facilities for research and

development, regulatory norms and facilities for development of the

human resources for that business is absolutely important. It has been

152
achieved through government initiatives in India and biotech is no

exception to that.

The Indian Government started making investments in creation of

infrastructure for biotechnology since 1985 by setting up a dedicated

Central Department for Biotechnology.

The Department of Biotechnology (DBT) is the nodal agency for

formulation of policy, promotion of R & D, international cooperation and

manufacturing activities. In mid eighties, DBT focused on generating

trained manpower & infrastructure development. The current focus is on

genomics, proteomics, transgenic, stem cell research and product

development. Having invested US $ 500 million towards R & D in

National Laboratories and Centers of Excellence since its inception

in 1986, several products in agriculture, industrial and health areas are

already in the market.

The Indian government on its part has been increasing the outlays

for biotechnology over the past decade. The budgetary allocations have

gone up by a tremendous amount from just 404 million Rs in 1987-88 to

1138 million in 1997-98 and to almost double the amount i.e. Rs. 2356

million in 2002-03. The central government is also planning to introduce

additional venture capital funds in line with its Technology Development

Funds (TDF) to promote small and medium biotech enterprises.

In addition to DBT, several other agencies in India also fund

biotech research, although the others are not dedicated to funding only

153
biotech research. Budgetary allocations for all these have gone up in the

last decade. For example CSIR has provided 9120 millions Rs. in 2000-

01 as compared to 2351 million Rs. in 1990-91. and UGC has increased

it from about 3495 million rupees to 14070 million rupees in the same

duration.

Table 5.1 Budgetary Allocations of Major Funding Agencies In India (Rs. Million)

1990-91 2000-01

Department of Scientific and Industrial Research 131.3 583.8

(DSIR)

Department of Science and Technology (DST) 2588.9 7798

Department of Biotechnology (DBT) 655 1361

Indian Council of Agricultural Research (ICAR) 3236 13990

Indian Council of Medical Research (ICMR) 396 1470

Council of Scientific and Industrial Research 2351 9120

(CSIR)

University Grants Commission (UGC) 3495 14070

Source ;Ministry of finance. Govt, of India.

These figures show that the government of India is committed to

biotechnology as vital sector for India's future. All allocations have a

rising trend.

The pie chart (fig. 5.2) of the funding distribution reflects the

strategic direction provided by the government through each of the

funding agencies. It is observed from the pie chart that for biotech

education, (UGC-29%) agricultural biotech research (ICAR-29%)

Scientific and industrial research (CSIR-19%) and so on have been

allocated.

154
 Fig. 5.2 Percentage of Each funding Agency for Biotech

This also shows the needs and priorities as taken up by the

government initiatives. From the global and Indian biotech industry

review it is clear that the bio-Pharma is leading sector and government

wants to boost up agricultural sector which has a very small presence in

the industry at present times (2005).

A regulatory framework is in place in India, to approve GM crops

(Genetically Modified crops) and rDNA (recombinant DNA) products

for human health. A government policy allows stem cell research in the

country while having in place ethical guidelines. The Government is also

inclined to adopt product patent regime. Indian Patents (second

amendment) Bill was recently cleared by the Parliament. The key

amendments in Patents Bill include 20-year patent term, emergency

provisions and commencement of R & D immediately after filling of

patents. Bill was in line with making country's patent law compatible

155
with the provisions of WTO (World Trade Organization) and TRIPS

(Trade-Related Aspects of Intellectual Property RightS)'*. While key

aspects and relevant provisions of TRIPS, Paris Convention^ and Doha

declarations^ have been taken on board, available flexibilities are made

use of to the maximum extent to safeguard national security and protect

varied interests of the nation including public health.

More on Strategic Focus by the government can be read from the

document -National Biotechnology Development Strategy Draft

published by the Department of Biotechnology, Ministry of Science &

Technology Government Of India and available for download at the

website^ http://dbtindia.nic.in/biotechstrategy/Biotech%20strategy.doc

The readers are requested to refer to Comments on this policy by

g

an NGO- Foundation for Biotechnology Awareness and Education for

highlights of critical analysis of the National Strategy for Biotechnology.

The highlights relevant to Human Resources are discussed and analyzed

in Chapter VI Human Resource Planning and Development Processes-

An Critical Analysis based on factors.

In addition to the Central Government initiatives, several

states have taken out their state specific biotech policies to boost the

biotechnology sector in their respective states. The documents of these

policies are also available on the respective government's websites for

downloading purpose.

156
 It can be said that "Biotechnology now has the potential to replace

information technology as the engine of economic development for

India."

After this analysis of Indian biotech on policy front it is necessary

to have a look at the information and data about this industry so as to

understand its growth pattern, strategic focus etc. so as to infer the

requirements for human resource management issues for studying human

resource planning and development within the context of present study.

5.2 Biotech Companies in India- Analytical Overview

The sources for this information presented in this section are

BCIL, biospectrum and other government departments, information data

collected through questionnaire survey, personal, telephonic and email

discussions etc. Same have been used for the purpose of analysis by the

researcher for the purpose of present study.

The time frame for which the data has been collected for

analysis is from 2001 to 2003 and in the end the manpower data is

presented for the sake of preparing analytical background for

understanding of the Human Resource issues related to planning and

Development.

The sales revenue in Rs. Crores for all the sectors such as Bio

Pharma, Bio Industrial, Bio-Services, Bio Agri, Bioinformatics and bio

suppliers is tabulated in the table 5.2 for the year 2002-2003

157
 Table 5.2 Biotech Industry 2002-2003 (India)

(including the Bio suppliers)

Sales Percentage Domestic
Segment Exports*
Revenues* share Sales*
1275 55 663 612
Bio Pharma
Bio Industrial 235 10 122 113
Bio Services 135 6 115 20
Bio Agri 110 5 6 105
Bioinfromatics 75 3 64 11
Bio suppliers 475 21 60 415
Industry Size (total) 2305 100 1030 1276
*Rs. Crores

Comparison of sales revenue- sector wise is depicted in figure

5.4 for the purpose of analysis.

Fig. 5.3 Comparison of Sales Revenue-Sector wise (2002-03)

Sales Revenue Comparison -Sector wise

n Sales Revenues* 1275 235

D Exports* 663 122
a Domestic Sales* 612 113

The comparison made using fig 5.3 is very clear making the

difference visible for different sectors. It also clearly brings out that Bio

Pharma is leading and shows position of other sectors. The comparison

of percentages brings makes the comparison visible.

158
 The percentage of sales revenue sector wise is calculated and the

percentages are represented using a pie chart in the figure 5.4

Fig. 5.4 Percentage Sales Revenue-For each Sector

Sales Revenue- Sectorwise

Q Bio suppliers
21%

I Bioinfromatics
3%
C3 Bio Agri 5% I Bio Pliarma
55%
• Bio Services
6%

a Bio Industrial
10%

From the pie chart analysis it is clear that Bio Pharma is a

leading sector in India also. In the global overview of biotech business

it was seen that Bio Pharma is the leading sector (exhibit-1) and we can

take that as a typical sector for detail study of operational aspects,

leading to understanding of HR issues in the context of present study.

Exhibit 1: BioPharma is leading in India

Bio Pharma is the leading sector in India. It can be presented as
a typical sector for description of the operational aspects,
organizational aspects like tasks knowledge & skill
requirements as an example leading to HRP and D issues.

5.2.1 Regional Scenario

After the nationwide picture the regional level is projected to see

the picture for analysis and drawing inferences. Table 5.3 and graphical

159
representation will throw light on the regional contribution and

contribution percentage of leading players countrywide.

Table 5.3 Regional scenario

The Industry constitution in 2002-03 including Bio Suppliers

Business % Regions Revenue %Share

Business (Rs. Crores) Share (Rs. Crores)
Class
Top 20 1366 59 South 899 39
Top 50 395 17 West 738 32
Others 544 24 North 668 29
Total
2305 100 Total 2305 100
Industry

For the purpose of analysis two pie charts are drawn. They

represent percentage share in revenue of business class i.e. top 20, top 50

and others in the total by fig. 5.5 and region wise percentage share in

revenue by fig. 5.6

Fig 5.5 Business Class and Percentage Share in Revenue

Business Class and Percentage Share

Others
24%

Top 20
59%

160
 Fig 5.6 Region wise Percentage Share in Revenue

%Share Region wise

Inference from fig. 5.5 is clear that Top 20 have contribution

which is about 60%, when one considers Top 50 the percentage

dramatically goes down to 17 % and therefore the conclusion is that the

top 20 companies are the best performers. We can refer back to the

discussion in Chapter I for selection of the sample and corroborate that

this inference reinforces the selection of the sample on the basis of

performance, and the sample becomes more representative.

Fig. 5.6 indicates that there is a good regional balance as the

percentage share is almost equal.

Table 5.4 shows the investment and patents pattern. It is clearly

seen that the increase in investment in 2001-02 is 236% in 02-03 it is 26

% and the conclusion is that the investment trend in biotech is very good

and substantially increasing. The patent scenario for India is also

encouraging. This reflects the expectation of growth and subsequent

161
creation of jobs, which increased the demand of workforce. Demand of

workforce is one of the parameters of HR planning.

Table 5.4 Investments and Patents

Investment track Patents

Growth
YEAR Investment Patents Filed Granted
%
NA NA Indian 175 43
FY2003-04
FY2002-03 635 26 PCT** 70 20
FY2001-02 504 236 Inter- 265 177
national
FY 2000-01 150 NA Total 510 240

This tabulated information needs certain explanations which are

given below in the form of notes.

Notes
*Rs. In Crore
**PCT (1970): The Patent Cooperation Treaty (PCT) permits an
inventor to file what is called a PCT patent application. The PCT
streamlines patent applications across several countries at once,
and extends the grace period awarded under the Paris Convention
to 20 or even 30 months. About 128 countries adhere to the PCT.
More information available on the web site of Unites States
Patents and Trademark office,
(http://www.uspto.gov/web/offices/pac/dapp/pctstate.html)
The revenues considered for the analysis are biotech products
sales and service figures
In the case of suppliers, revenues are the sales of equipment to
pure biotech companies and also life science sector. There is very
thin line of differentiation between biotech/life science equipment.
The Agri segment analysis has included only the GM seeds. So
the hybrid seeds business is not a part of the agribusiness sales
values. The hybrid seeds market was close to Rs. 180 crore.

162
 Adding that the total Bio-agro market would be Rs. 290 crore.
• For all the ranking purposes, only biotech business has been taken
into consideration. Wherever TURNOVER is mentioned it means,
sales turnover from biotech.
• Women form a significant part of the workforce in research-
intensive companies. They account for nearly 30 % of the
employees in this sector. However, biotech companies, which are
basically sales and marketing driven, are exceptions to the general
trend of biotech companies having more women employees.
Many of these companies are keen to induct women even in
marketing, sales and technical functions, which require extensive
traveling.
• In the regional table, the sales figures considered are the revenue

generation of companies based out of the respective regions and

not the sales(including suppliers) done in that region. As East has

very little base, it has been included the same into North.

5.2.3 Human Resource scenario in Indian Biotech

Against the backdrop of analysis and inferences discussed above,

the manpower employed in biotech in India is tabulated in table 5.5

Table 5.5 Manpower & Investment Growth - Yearwise

Manpower Investment
YEAR People Growth % Growth %
FY 2002-03 6400 68 26
FY 2001-02 3800 52 236
FY 2000-01 2500 — —

From the table 5.5 for investment and manpower it is clearly seen

that there is a visible positive co-relation between the investment and the

number of people employed in biotech business in India. The growth in

163
number and percentage increase makes the point very clear.

Fig. 5.7 Manpower and Investment Trend (2001-02 & 02-03)

Manpower and Investment Trend

YEAR FY 2002-03 FY 2001-02

I Manpower 0 68 52
• Investment 26 236
_i

From the point of view of Human Resource Planning both the

conclusions are important and useful and it can be said that growth in

investment is an indicator of generation of more employment and

demand for human resources increases in positive proportion of the

employment opportunities generated.

This speaks only about the number of employment, i.e. the

number of people employed. For the purpose of planning and

development the qualification of the employees, are also important. The

distribution of the HR employed by qualifications, for the time period

under consideration has been tabulated in following table no. 5.6.

Table 5.6 is graphically represented for the purpose of analysis by

fig. 5.8.

164
 Table 5-6 Manpower Distribution by Qualifica tions
FY 2000-01 FY 2001-02 FY 2002-03
By Qualification
Graduates and post 1425 2165 3545
graduates
B. Tech / MBA 705 1025 1695
M. Tech /M.Phil 150 265 560
Ph.D. 70 130 285
Others 150 215 315
Total 2500 3800 6400

Fig. 5.8 Year wise Manpower Composition by Qualifications

Year wise Manpower Composition by Qualifications

1000

0
Graduates B. Tech / MBA M.
-1000 and post /M.Phil
graduates
•2000

— FY2000-01 FY2001-02 • FY 2002-03

Analysis of the composition of the work force and yearwise

change in that, if any, is also of interest for human resource planning on

demand side. It can be very clearly seen that for all the three years

the demand for all types of workforce/manpower is on the rise.

In the category Graduates and post graduates the number of

employment is maximum for all the three years. Next category is that of

B.Tech./M.B.A. Then it is M. Tech/ M. Phil, Ph.D. and least is others.

Following three charts represent pie charts for successive three

165
years and make it possible to analyze the variables in question. These

graphs were drawn after calculation of the percentiles for each year for

all the categories for the sake of comparison and analysis.

Fig. 5.9 Manpower Distributions % by Qualifications 2000-01

Manpower Distribution % FY 2000-01

others
6% 'i
Ph. D. t
3%
M. Tech /M.Phil
7% — _ _ . - i ^ - - , — ^ — —

I Graduates and
B. Tech / MBA\ 'MB^^^^tKm '^^'^ graduates

Fig. 5.10 Manpower Distributions % by Qualifications 2001-02

Manpower Distribution % FY 2001-02

others
6% ';
Ph. D.
3% \ \
M. Tech /M.Phil

^ ^ ^ ^ ^ ^ ^ ^ ~ l Graduates and
B. Tech / MBAl . ; : ; ; '.MKK^^^BM post graduates
28% \'.'/.'.\'/.^^^^^^K 57%

166
 Fig. 5.11 Manpower Distributions % by Qualifications 2002-03

Manpower Distribution % FY 2002-03

others
5%
Ph.D.
5%
M. Tech /M.Phil
9%

Graduates and
postgraduates
B. Tech/MBA 55%
26%

It can be very clearly inferred from pie charts for all the three

years that the biotech workforce composition has following features

though more features will come to light of the day during discussion of

Knowledge and Skill requirement, for the purpose of composition the

broad basis of qualification is valid and enough.

Ex-2 Biotech Workforce Composition

1.Maximum number of employees is that of Graduates and

Post Graduates ( about 57 %)

2.Second percentile ranking is that of B. Tech /MBA (27%)

3.Third category in rank is M.Tech./M.phil 6 to 9%

4.Next in the line is others 4-6 Vo

5. Least % is Ph. D. 3- 5%

167
 5.2.4 Biotech Work Force Composition

The results from above three pie charts viz. fig. 5.11, fig.5.12 and

fig.5.13 are summarized as: Maximum number of employees is that of

Graduates and Post Graduates ( about 57 %), Second percentile ranking

is that of B. Tech /MBA (27%), Third category in rank is

M.Tech./M.phil 6 to 9%, Next in the line is others 4-6 %, and Least % is

Ph. D. 3- 5%

These conclusions give us the inference that biotechnology

workforce is mainly knowledge based workforce as the maximum

number of them have to be graduates and postgraduates. This is

concurrent with the statements in the global overview of the biotech and

in the beginning of Indian Scenario, that biotechnology is knowledge

based.

It is also noticed that the demand for people with

qualifications at higher side, for example Ph.D. and B. Tec./MBA is

increasing.

After this, brief description of sector wise activities viz. Bio

Pharma, Agri Biotech, Industrial, and Services would help better

understanding of the biotech business scenario from management point

of view.

5.2.5 Bio Pharma - Medical biotech

The Indian pharmaceutical market is growing exponentially. Its

value in 1997 was US $ 3 billion and is expected to rise to US $ 9 billion

168
by the year 2005. According to Mckinse study , Indian Pharma industry

is poised to grow to an innovation led US $ 25 billion industiy by 2010

with a market capitalization of almost US $ 150 billion from the current

US $ 5 billion generic based drug industry. Vaccine market in 2001 was

US $ 100 million and growing at 20% per year. Diagnostic market was

US $ 200 mn in 2001. Bio therapeutics and diagnostics of which

recombinant Hep B dominate medical biotech segment vaccine is the

major product. Others include GCSF, EPO and interferon Alpha 2b.

Human insulin was launched in 2003 along with Streptokinase, other

vaccines and diagnostics.

The Indian government has granted marketing licenses for

about 25 no. of recombinant protein therapeutics. Some of the

recombinant products already approved by the Genetic Engineering

Approval Committee (GEAC) are

Insulin

Interferon Alpha

Interferon gamma

Interleukin-2

Gm-CSF

G-CSF

Hepatitis B vaccine

Eiythropoietin

Streptokinase

169
 • EGF

• Chymostrypsin

Traditionally India has been a very strong player in conventional

generics due to established track record of process engineering skills and

capability to set up comparable manufacturing units at a fraction of the

capital cost utilized overseas.

Companies such as Shantha biotech, which started just one

product, are now effectively using this experience to launch other

products like plasminogen activators, interferons, sophisticated vaccines

etc. Following the suit of globalization many multinationals like

Monsanto, Pfizer, Uniliver, DuPont, Bayer, have set up their businesses

in India. Eli Lilly- Ranbaxy 50:50 joint venture in India has been

marketing a range of biotech products such as Humalog and Huminsulin

for diabetes. Hoechst Roussel Vet has developed a cow abortion IBH

vaccine in India. Chiron -Boehringer is setting up a vaccine venture in

India.

5.2.6 Agri Biotech

India being the second largest food producer after China, offers a

huge market for biotechnology products especially Agri biotech

products. This, combined with excellent scientific infrastructure in

agriculture, rich bio-diversity and skilled and low cost human power,

make India a great force. Transgenics of rice brassica, moonbean,

pigeonpea, cotton, tomato and some vegetables like cabbage, cauliflower

170
etc. will complete field assessment and some of them would be ready for

large scale production by 2005. More protein rich wheat with higher

lysine content will be introduced in the farmer's field by 2003-2005.

Nutraceuticals market stands out to INR 25000-30000 mn (US $ 532-

638) presently as per Ernst and Young report. Genetically engineered

seed market was worth an estimated $ 250 million from total seed market

worth US $ 500 million in 2001. Marine resource development and aqua

culture also hold a great potential with India having more than 8000

kilometers of coastline including Andaman and Nicobar and

Lakshwadeep.

There is a presence of global companies in this sector too. US

based Hicks Muse's proposal to take up 75% equity in India Seed

Holding through its Mauritius subsidiary was cleared by the government.

The company will bring forth foreign investment worth 35 million for

production and marketing hybrid and improved variety of seeds. The

Indian partner in this venture is Mahindra Hybrid Seeds, besides this

Bayer functions in India through acquiring New Delhi based Pro Agro

group companies.

5.2.7 Industrial Biotech

This segment is expected to show significant growth

commensurate with the growth of the Biotech sector. Products include

enzymes, bio-instrumentation and bio process equipment.

171
 5.2.8 Services

An increasing number of large pharmaceutical companies are

finding it difficult to conduct the entire drug discovery process in house.

India on the other hand provides cheaper infrastructure. For example a

biotech based therapeutic product costs $ 250 million and 10 to 15 years

to reach the market. In India the cost of drug discovery research can be

reduced substantially due to local norms and payment in rupees. This has

given rise to contract research organizations specializing in drug

discovery research services. Contract research services are largely

focused on molecular biology, bioinformatics, genomics and stem cell

research. Clinical research and trials are expected to grow exponentially

over the next 5 years. Scores of large IT companies have already

established bioinformatics units and Bangalore is bristling with

bioinformatics startups. There are opportunities in India for data-mining,

gene annotation, and the development of software interfaces. These

require enormous computing power for which India has established its

supremacy'^.

5.3 Case Studies- Indian Biotech Companies

For developing understanding of the human resource issues in the

Indian scenario, case studies of few companies are also undertaken, as

discussed in the Chapter I in the section on methodology. This has

helped the researcher in developing micro level understanding of the

dynamics and processes in the company. The focus of case studies is on

172
developing understanding of resources, processes, products of the

company which will help understand the issues of knowledge and skill

sets along with other HR related issues. In the light of this information of

knowledge and skill sets necessary to carry out the tasks by the

workforce, the factors involved in planning and development of human

resources for example, demand and supply pattern, recruitment methods

and mode, training and development issues can be understood better. The

case study material will be used along with questionnaire and interview

survey for critical analysis of HRP and D in a separate chapters VI and

VII.

For the purpose of case study, care is taken to include companies

with active presence in Bio Pharma, Agricultural, Industrial sectors and

discussion about the appropriateness of the sample has already been done

in Chapter I and in the present chapter. The companies selected for

micro level study of the topic under consideration were presented in table

1.1 and the four companies selected for case studies are presented as

extract of that table, for ready reference

No Name of the company Sector Rank Code Revenue*

1 Biocon 1,3 01 01 502.00
2 Serum Institute of India 1 02 02 491.00
7 Wockhardt 1 07 07 84.00
16 Mahyco Monsanto 2 16 16 54.00
l=Bio Pharma/Health Care, 2= Agriculture, 3=Industrial *Rs Crores

The information obtained through the questionnaire survey for

these selected 20 companies has been enriched for the purpose of

reinforcing, validating the observations by way of writing case studies of

173
few companies out of the total selection. This made it possible for

researcher to look at the conclusions and the role players in a more

rational way. The case studies for selected companies as described

above are presented in the next sections.

174
 5.3.1 BIOCON LIMITED.

Company History

Biocon Ltd. Is India's first biotechnology company and was

established in the year 1978. The Company has built strong and

experienced technology platforms based on fermentation processes.

Biocon used its technology base to expand from industrial enzymes to

bio-pharmaceutical products.

Business Model: Biocon has established the essential building

blocks to become an integrated bio-pharmaceutical company as

shown below.

Fig: 5.12 BIOCON, a FULLY INTEGRATED Bio-Pharma Company

Syngene- Drug Discovery

• Research & Development

• Molecular Biology
• Synthetic Chemistry

i
Clinigene • Development
• Clinical Research
• Clinical Developments
• Clinical Trials

i
Biocon-Commercialization
• Microbial Technologies
• Pharmaceutical
Manufacturing
• Sales & Marketing

175
 Syngene (drug discovery) and Clinigene (clinical development)

with these two sister concerns Biocon is positioned to become a global

player within the bio-pharmaceuticals space and has a fully integrated

business model.

Major achievements by Biocon Ltd.

India's first biotechnology company, established in 1978 achieved

a global leadership in specialty enzymes in 1979. Within ten years, in

1989 developed a proprietary technique, Solid State Submerged

Mammalian Cell Culture, which is globally unique. Syngene, in 1994

became India's first & largest Contract Research Company. India's

largest and only USFDA qualified producer and exporter of stadns, in

1998. India' first clinical laboratory was established by Biocon in 2000,

which was accredited by College of American Pathologists (CAP).

In the field of recombinant human insulin, Biocon manufactured

clinically validated r-human insulin in India and has a largest plant in

Asia for manufacturing the same at Bangalore. They have developed

arrangements for global distribution of the same and also are developing

oral insulin.

In the year 2003 Biocon established India's first and largest

Antibody Facility and provide a unique platform of proprietary products

in Antibodies and Cancer Vaccines.

176
 Table: 5.7 Biocon India - 16th In Global Top 20- Year 2005

Revenue Net Income Market Cap

Company US$m US $m 2003 US $m as on
2003 29 June 2004
1 Amgen 8400 2260 68800
2 Genentech 3300 563 57500
3 Biogen Idee Inc 2300 875 21300
4 Chiron Corporation 1800 227 8400
5 Applied biosystems 1680 183 4500
6 Genzyme corporation 1580 104 10600
7 Sereno 1500 390 9900
8 Medlmmune 1054 192 5800
9 Novozymes 950 123 2300
10 Gilead Sciences 868 72 1400
11 Biovail Corp 824 27 3000
12 Millennium Pharma 434 484 4200
13 Genecor International 380 16 968
14 Spracor 360 136 4500
15 Affumetrix 301 14 1900
16 BIOCON — • 120 30 1100
17 Netkar 105 47 1200
18 Celera Genemics 88 82 824
19 ImClone Systems Inc 81 113 6500
20 Exelixis Inc 51 96 600
Source: BioSpectrum July 2004

In the year 2005 Biocon was India's no. 1 biotech company with a

global Biotech ranking of 16 as shown in the table 5.7

Human Resource Scenario

FIG. 5.13 HUMAN RESOURCE SCENARIO-BIOCON LTD

Employee Composition BiOCON

Post
Graduates
12%

Graduates
76%

65 Ph.D.s, 84 Post graduates, 536 Graduates, 18 others

177
 Table 5.8 Biocon - Employee Costs for 2003 and 2004 in Rs million

2003 2004 Change

Total Employee costs 382 457 +75
Employee nos. (average) 663 867 +204
Avg Revenue per employee 4.3 6.3 +2
Avg PAT per employee 0.7 1.6 +0.9
Avg cost per employee 0.6 0.5 -0.1
Employee turnover 9% 7% -2%
Analysis: The average revenue per employee has gone up by 2

mn. Rs. Benefit/Cost per employee has gone up from 6.2 to 11.6 which is

almost double. Reduction in employee cost. Reduction is seen in

employee turnover. Increase in Average PAT by 0.9 million.

It suggests a good HRM for retention in terms of strategic

competitive advantage.

Future Challenges In the bio pharmaceuticals arena Biocon

has plans to face the future challenges. Fig. 5.17 shows strategic focus

for future development of the company.

Fig. 5.14 Future plans - Strategic focus

MAbs

Immuno-
suppressants

CRO

Insulin

Research
Services t^*^''

Statins

2004 2006 2008 2010

178
 Important observations and conclusions

The above study is useful for throwing Hght on micro aspects of

Indian biotech scenario, as an example. It gives idea about employee

costs and turnover and the growth drivers indicate the strategic retention

policy of the company. The future plans indicate that company plans to

focus on statins, research services, insulin, immunosuppressant and

monoclonal antibodies. From this the manpower demand in terms of

areas of operation can be estimated. From the tune of operations the

number of employees of given qualifications, experience and

competencies would be easily estimated. It can be said that at Biocon the

HR function is now being handled in a strategic manner at least for

retention. Form the difficulties in training and development area, the

company naturally faces the same problems which are posed by Indian

environment. As the skills and competencies have not been idenfified

systematically the necessary vision for HR planning and Development is

lacking. These problems are discussed more in details in the chapter

where analysis of HR planning and development is discussed.

As written in the chapter III on operational details of Biotech

Company, and from the details presented for BIOCON, it reinforces that

biotechnology is global and this company has its own specialty in the

process within the framework of this progressive technology.

179
 Conclusions

The case study provides the dynamics behind the success of the

company. Integrated business model Drug Discovery - Development -

Commercialization. Analysis of HRM suggests good HRM in terms of

retention strategic competitive advantage in terms of retention, which is

exemplary for companies all over the country. The difficulties faced in

providing training even if the need was there, are same for all the

industries and hence in the absence of systematic information about

knowledge, skill sets and competencies there is lack of vision necessary

for sound process of HR planning and development.

180
 5.3.2 SERUM INSTITUTE OF INDIA LTD.

Company History

Serum Institute of India is basically an organization concentrating

on vaccines and other biologicals, for example pharmaceuticals like

Haematinics, Calcium Supplements, Digestives, Anti-diarrhoeals,

Hormones, etc. They created another facility, which was incorporated in

July 1993 as 'Serum International Ltd.'. Serum International Ltd. also

markets, research based products from Serono, world leaders in fertility

products.

Important mile stones:

The information presented below provides focus of the company

in terms of the development of the products. It is vaccines, and that

Serum is one of the large exporters of vaccines the world over.

1967-"Operations started with manufacture of Tetanus Antitoxin

followed by Fluid Tetanus Toxoid. "

1974-"Triple Antigen (Diphtheria-Tetanus-Pertussis) Vaccine production

commenced."

1972-"Large-scale manufacture of Adsorbed Tetanus Toxoid

undertaken."

1977-"Autonomous scientific wing. Serum Institute of India Research

Foundation established."

1979-"In response to urgent requirement of vaccines for India's EPI,

• ' /

181
giant Blending Vessels indigenously fabricated."

1980-"First-time-in the-world collection of equine serum by

simultaneous and continuous plasmapheresis using IBM Computerised

Cell Separator."

1981-"Manufacturing of life-saving Polyvalent Anti-Snake Venom

Serum effective against four poisonous snakes commonly encountered in

India commenced."

1982-"Introduction of Anti-D Rho Immunoglobulin, lyophilised and

tested on Autoanalyser."

1984-"A 2500- litre Blending Vessel, largest in the world for DTP

vaccine, successfully fabricated and commissioned."

1985-"Hi-tech plant set up for large-scale manufacture of Human

Albumin from human placenta."

1986- Recognition:"The film 'Snakebite' awarded 'Best Professional

Film Award' at ninth International Film Festival in U.S.A. Followed by

two more international awards in 1987 and 1989."

1988-"Product availability expanded to include range of Fertility

Products of World Leaders, Serono of Switzerland."

1989-"Manufacture of M-Vac (Measles Vaccine) using E-Z Strain of

virus on Human Diploid Cells for the first time in India."

1991-"Anti-snake Venom Serum, incorporating venoms from snakes in

Central African Countries introduced."

182
1997-"Commencement of export of Anti-cancer products."

"Use of Modular Laboratory meeting international GMP requirements"

1996-"Use of Automatic printing and Labelling Machine, use of

Automatic Inspection Machine (screening) for liquids in ampoules and

vials."

1994-"Commencement of export of vaccines to UN agencies."

1993-"Manufacture of MMR Vaccine and MR vaccine for the first time

in India." "Launch of Serum International Limited."

1992-"Manufacture of Rubella virus vaccine (monovalent Rubella

vaccine) for the first time in India."

1998-"Export of vaccines crossed over to 100 countries"

1999-"Serum Institute recognised as the largest producer of Measles and

DTP vaccines in the world"

2000-"One out of every two children in the world vaccinated by Serum

Institute's vaccine"

2001-Launch of indigenously manufactured Recombinant Hepatitis-B

vaccine 'GeneVac-B'

2002-Launch of BCG vaccine

Important observations

Serum Institute of India Ltd is the largest exporter of vaccines and

immuno-biologicals from India. Across the globe its products are

exported to 138 countries. It has gained worldwide recognition as a

183
reliable source for quality vaccines, for the global vaccination programs.

Serum Institute has revenues of approximately Rs 491 crore from

the sale of biotechnology products in 2002-03. Out of this, exports were

to the tune of Rs 378 crore, or 77 percent of its products are exported. A

subsidiary company of Serum Institute, Serum International Ltd, is

known to handle the sale of imported products as part of the company's

agency operations. It is estimated that the agency operations accounted

for the remaining Rs 64 crore of the total Rs 555 crore business reported

by both the companies jointly in 2003-04.

The companies have a marketing alliance with Serono of

Switzerland and technical arrangements with a number of American and

European majors.

Human Resources, Practices and Strategic Directions

Serum Institute has policy to secure and retain only the best in

terms of human resources, in terms of equipment and technology, in

terms of materials and consumables.

The number of employees engaged in research has increased

from 138 in 2002-03 to 182 last year. The employees in the

manufacturing division also increased from 1095 to 1210 during the

same period. In all, Serum employs 1,930 people, which had increased

from 1,715 in the previous year.

184
 Major Departments and Activities

Quality Assurance: Validation studies are mandatory for all

equipment, all production processes and for analytical procedures in

Quality Control. There is continuous monitoring of ancillary services

such as water quality by LAL test, air-borne particulate matter by Met-

one / Climate particle counter, live organism detection by air sampler,

disinfectant efficacy, steam quality testing, air conditioning,

refrigeration, sterile room integrity, and environment by settle plates and

using other methods as per current GMP (cGMP- refer appendix III)

requirements. Spot checks are also instituted. Physical, chemical and

biological methods are used to perform validation for the ovens,

autoclave and tunnel. The data on each equipment, in the form of Design

Qualification (DQ), Installation Qualification (IQ), Operational

Qualification (OQ) and Performance Qualification (PQ) is maintained in

the respective departments.

The quality assurance protocol covers raw materials testing, in-

process control and finished product checks. Certain testing procedures

like the dermonecrotic test on Pertussis vaccine are carried out, though

they are not mandatory.

The manpower factor is stringently governed. Each

microbiologist, each pharmacologist and each chemist in the Q.A. team

is hand-picked, according to the director HR. Twenty-two of them are

F.D.A.-approved testing experts and thirty-two are production Experts.

185
Their schedule of training included visits to the leading laboratories of

France, U.K., U.S.A., the Netherlands and Croatia and they frequently

attend WHO workshops.

The Q.A. Cell is engaged in several profession-related activities:

It also has an exhaustive reference library for disseminates information

via audio-visual aids, consults with international experts, gives training

in Production and Quality Control to foreign UNICEF sponsored

candidates. The QA cell also conducts orientation programmes for

officers from Government regulatory agencies.

'Serum Institute of India Research Foundation'

Serum Institute has more focus on its Research and Development

function. Within the span of ten years there was a record of product

development and indigenization of processes. In 1977, a separate autonomous

body, 'Serum Institute of India Research Foundation', was instituted. The

Foundation has a group of highly qualified, intensively trained scientists. They

interact on an ongoing basis with scientists and academicians from other

institutions in India and abroad. Personnel from the Research Foundation

regularly attend international conferences and workshops, and eminent

personalities are periodically invited to India for exchange discussions and

technical and research consultations. The Research Foundation has been

recognized in India and abroad.

Important Observations

Serum Institute of India commenced with a beginning of Tetanus

186
Antitoxin and has now emerged as the world's largest manufacturer of

Measles Vaccine and DTP group of vaccines, (at least one of two

children bom has been administered with Measles vaccine or DTP

vaccine manufactured by Serum Institute)

Serum Institute went on to launch, Polyvalent Anti-Snake

Venom Serum, Measles Vaccine on Human Diploid Cells, Measles,

Mumps and Rubella Virus Vaccine, Polyvalent Anti-Snake Venom

Serum (Central Africa), Mumps Virus Vaccine, Measles and Mumps

Virus Vaccine, Measles and Rubella Virus Vaccine and several other

products that attest to its seriousness of purpose.

Some of the products in the pipeline are Hepatitis B Vaccine,

Hepatitis B-DTP Combination Vaccine, BCG Vaccine, Rabies Vaccine

(Human Diploid Cells) and Rotavirus Vaccine.

Progressively, Serum Institute eliminated India's dependence on

imports for several product lines.

Strategic vision - Beyond 2000

The company is now nation's leading manufacturer of both DTP

and MMR group of vaccines. Serum is classed as world players with

their vaccines being used in 138 countries across the globe.

Serum Institute plans to continue to share its philosophy of care

across many more shores. One major area of concern is the endeavour to

prepare more heat stable vaccines. These would be of great value in

Indian, and in other tropical climates where dependence on the 'cold

187
chain' is a current constraint. The breakthrough could come by using

newer delivery systems in vivo for ensuring the presentation of the

vaccine to the cells of immune system for stabilizing and releasing the

antigen during an extended period of time.

Apart from making a recombinant Hepatitis B vaccine, the work

on quadruple vaccine involving Hepatitis B with DTP is complete. Work

is on to combine this with Haemophilus B vaccine to make an effective

Pentavalent vaccine.

A liquid adsorbed Rabies vaccine has been made in HDC to

give a stable, reaction-free and highly immunogenic vaccine.

On the DNA vaccine front, work is on for developing a DNA Rabies

vaccine. Also,a novel peptide vaccine for measles is being developed.

Research and Development is on for a vaccine against AIDS.

Amongst other products developed under the Research

programme are Haemocoagulase, Pygeum africanum and Percutaneous

BCG vaccine for treatment of bladder cancer.

Serums Diversification plans include advances in a wider range

of vaccinology including Molecular Biology and Recombinant DNA

(rDNA) Technology, Protein Biochemistry and formulation of antigens

containing newer excipients, adjuvants for better performance of the

vaccines and delivery systems, lyophilisation on a vast scale. This will

create wider avenues of growth and demand for qualified human

resource.

188
 Conclusions

Strong Research and Development focus.

Quality in all Processes including Human Resources

Training and Development for maintaining quality and

productions standards of international requirements. Methodology

for that is national and international workshops and programmes

and sharing with institutions.

Careful selection of Manpower is of strategic importance. The

organization is technology dominated and the techno-structure

provides the leadership at this stage of the business cycle. The

development aspect is taken care of by sending people for national

and international programmes and creating a platform for sharing

knowledge with research institutions.

Future plans with strategic focus will create demand for qualified

human resource.

Company at present has been managing HR function strategically

for retention and has reinforced HRD by recruiting experienced

people to handle that function separately.

Lack of systematic information about knowledge, skills and

competencies reflects neglect in HR planning as a long term factor

strategic planning.

189
 5.3.3 WOCKHARDT LIMITED

History of the company

The Indian company, Wockhardt Limited, was founded in 1960,

and today claims its place amongst the country's top research and

technology oriented pharmaceutical companies. Wockhardt has

subsidiaries in the United States, the United Kingdom and Brazil, and

majority-owned companies in South Africa and Mexico. The company

also has marketing offices in Africa, Russia, Central Asia and south east

Asia.

In 2003, the company launched Wosulin, a recombinant insulin

product. In doing so, Wockhardt became the fourth company, and first

Asian manufacturer, to be able to offer the product. Wockhardt has

identified biopharmaceuticals as a major developing market area, is

selling generic biopharmaceuticals in the US and EU. Wockhardt's 53%

of international business is from Europe and US as can be seen from

following figures,

1994 10% of sale from Europe and US

1999 20 % of sale from Europe and US

2005(hl) 64% of sale from Europe and US

• Sales $ 300 mn

• R & D spending @ 8% of annual turnover

• Market Cap $1.3 billion

190
 Geographical revenue split

• Europe 4 1 % USA 11% India 36% Rest 12%

The above shows increasing international focus

US & EU Business constitutes more than 50% of total revenues.

Major activities and achievements, recognitions etc.

Wockhardt has capabilities developed 'from concept to market"

and is one of the Leading Indian Pharmaceutical and Biotechnology

company. It is the only pharmaceutical company in India to be selected

as Business Super Brand by the Superbrands Council- Internationally

reputed organization spread over 45 countries. This a recognition for

offering consumers emotional and tangible benefits.

Workforce scenario

3500 employees are across locations in India and abroad and 500

employees are in US & Europe with features like R & D and

Manufacturing Competitiveness, Biopharmaceuticals and Generics as

product lines, Regulated Markets in India and Rest of the World.

A New Chemical Entity is generated through R and D which is

multidisciplinary in nature covering genetics and biotechnology. For this

activity a team of human resources having multidisciplinary skills is

available. IPRs are also created on successful implementation of projects.

There 350 scientists with 100 Ph.D.s and 150 applications have been

filed for patents. Wockhardt has 3 patents in the area of

biopharmaceuticals.
 MANUFACTURING CAPABILITIES and Products

• Strategically located manufacturing facilities in UK & India

• Approved by major regulatory authorities including US FDA

steriles-Vials, Ampules, Cartridges, lyophilized products,

Cephalosporins, Biotech-: 3 major expression systems: yeast, e-

coli, mammalian cell

Formulations: vaccines and non-vaccines

Oral: Tablets (including effervescent). Capsules, Liquids

Topical: Creams and Ointments

Important observations

Wockhardt is already marketing its products to seven countries.

And has plans to market to 19 countries by 2006. It has 20 registrations

for Pharma products in India and over 40 are in the pipeline. These will

also be registered in European Union and the United States. To meet this

global need it has biomanufacturing facility, biotechnology plant and

pilot scale plants. The six biotech products developed by Wockhardt are

rhu Insulin, r Erythropoeitin, Hepatitis B Vaccine, Interferon alpha 2B,

Glargine, and G-CSF. to summarize one can say that it is a Largest

Indian generic company, 2"'* largest in the hospital business amongst top

10 generic companies, and has US FDA approved comprehensive

manufacturing capabilities. The company expects to continue to

outperform the industry growth rate and key growth drivers are Biotech,

Diabetology and Nephrology. Indian business is expected to grow @

192
12% + This implies that Wockhardt's has good demand created for

qualified human resources in the field of bio Pharma, in all categories viz.

R and D, Manufacturing and related functions and Marketing, not only in

India, but across the globe

193
 5.3.4 MAHARASHTRA HYBRID SEED COMPANY LTD.

Company History:

Mahyco was founded in 1964, by Dr. Badrinarayan R. Barwale

who is a Winner of the World Food Prize-1998. It is a private company

in India which produces and markets hybrid Sorghum, Pearl Millet,

Sunflower and Wheat and first company in the world to successfully

commercialize hybrid Cotton based on CMS /CMS. In 2002 it became

the first Indian company to be allowed to commercially grow and market

Bt cotton- which is India's first Genetically Modified crop.

Major Departments and Activities

It has a Network of more than 100000 farmers in 33 production

centres of India. Mahyco has 8 state-of-art Processing units with in-

house Quality Assurance facilities. It is a Member of ISTA (International

Seed Testing Association) under Article IV (C) of the ISTA certificate.

A strong R & D infrastructure developed near Jalna ( Maharashtra ). This

is an ISO 9001 company with largest multi-locational ISO certification..

Mahyco Research Center is built on a 110 acres with buildings

for Administrative offices, Research Laboratories, Greenhouses etc. near

Jalna (Maharashtra). This description makes it easier for the

understanding of the skill sets required for working at Mahyco and thus

we can say that this infrastructure also tells us about the type of HUMAN

RESOURCE necessary for agricultural biotechnology being practiced at

the company.

194
 DNA Sequencing LAB

Equipped with Perkin Elmer ABI Prism 377, automated DNA

sequencer, up to 96 sequences can be made in one run. Up to 800 base

pairs in a DNA sequence can be resolved in each sequence. Virus

sequences, gene sequence analysis, novel gene sequences, quality control

of new constructs are undertaken.

Molecular Virology LAB

Mahyco has an in house facility for detection, identification and

molecular characterization of plant viruses (Geminiviruses, TOSPO,

ILAR and Poty groups) of economic importance. It has Virus resistance

screening and Identification of prominent genotype for product

development. Diagnosis of plant virus diseases by using Electron

Microscopy and Serological properties can be done here.

Applied Molecular Genetics & Molecular Biology LAB

Here it is possible to study the plant pathogen interactions at the

molecular level and apply the results in developing durable and / or

enhance disease resistance. Microbial genomics programme to identify

novel agronomically useful genes or gene products from micro flora

native to India and apply such identified gene(s) or gene products in

developing new tools and technologies for crop improvement.

Developing molecular markers for enhancing breeding programmes and

to characterize genetically Mahyco's germ plasm is a routine. The lab is

having fermentation and associated facilities to develop indigenous, cost

195
effective fermentation technologies to produce agriculturally important

microbial metabolites.

Bio -Technology LAB

Gene discovery projects for useful agronomic traits such as

drought resistance and insect resistance antibody mediated and gene

silencing strategies for pathogen control, alternative male sterility

system.

Plant Transformations

Transformations and molecular analysis of transgenic plants are

undertaken. Routine Genetic Transformations of many different crops

including Paddy, Sorghum, Tomato, Brinjal, Okra etc.

Plant Disease Clinic

Isolation and Identification of Pathogen from infected samples is

carried out here. Detection and recognition of plant disease is also

undertaken along with Screening for disease resistance in seeds etc.

Green House Facility

6500 sq. meter of climatically controlled Greenhouses built to

specifications of Govt, of India, Biotechnology Department.

Experimental trials and breeding programs with transgenic Cotton,

Sorghum, Rice, Brinjal, Tomato, etc. are undertaken.

Seed Testing Laboratory

This laboratory is capable of analyzing Isozymes, Seed Health,

Germination, Physical, chemical characteristics, qualities such as taste,

196
flavor and acceptability of grains. Experimental trials and breeding

programs with transgenic Cotton, Sorghum, Rice, Brinjal, Tomato, etc.

undertaken. The production, processing and packaging of seeds are done

as per stringent quality assurance norms.

Mahyco's Seed testing lab (QC) has been granted the status of

Member Laboratory of the International Seed Testing Association

(ISTA), Zurich, Switzerland since 1999. Seed testing for genetic quality

is necessary to certify a genetically pure seed. Seeds that do not contain

any other seeds of the same crop or other species is highly desirable.

Among other tests, isozyme analysis is an important tool to determine

genetic purity in seed lots. We employ this technique for rapid

identification of undesirable inbred seeds in Fl seed production program.

We carry out isozyme analysis in seed quality testing. Sorghum, bajra,

maize, sunflower, paddy, tomato, cantaloupe and chilli are some of the

crops that we routinely subject to this test.

Mahyco Life Sciences Research Centre (MLSRC), at

Dawalwadi near Jalna is one of Asia's advanced seed industry R&D

establishments and is equipped with state of art labs for seed health,

molecular biology, cytogenetics, pathology, entomology, molecular

virology and plant transformation. The germplasm preserved is one of

the most extensive and diverse in the land. Best muhi- disciplinary talent,

trained nationally and internationally work in the centre. The company

carries out its research at 6 centers all over the country. In addition, the

197
multi-locational crops performance testing is presently carried at 16

different centers in the country.

Quality Assurance

The production, processing and packaging of seeds are done as

per stringent quality assurance norms. Seed testing lab (QC) has been

granted the status of member lab. of the International Seed Testing

Association (ISTA), Zurich, Switzerland since 1999.

Production Centers

More than 100,0000 grower farmers, 29 production centers, a

million quintals of seed processing capacity at 14 processing plants and

more than 25000 quintals of dehumidified storage for sensitive seed

material are highlights of Mahyco's truly huge infrastructure. The

production and the processing network is supported by a well developed

all India marketing network consisting of more than 5000 sales outlets.

Awards for Excellence

Mahyco has received several awards for the pioneering role in

developing the private seed Industry in India.

1989 - 'National award for Research & Development' Presented

by the ministry of science and technology.

1990 - International Seeds and Science Technology (ISST), and

the Federation of Indian Chambers of Commerce and Industry awards for

notable contribution to the seeds industry in India.

198
 1996 - Company Chairman B. R. Barwale, was named an

honorary Life Member of the Federation of International Seedsman (FIS)

for his pivotal role in the development of the private seed industry in

India and for his dedicated service to national and Inter national seed

trade organizations.

1998 - The World Food Prize for outstanding achievements in

the enhancement of the world's food supply was awarded to B. R.

Barwale by the World Food Prize Foundation, U.S. A

2001 - Chairman Shri B. R.Barwaleji was honoured with

"Padma Bhushan" on the occasion of the Republic Day Celebration on

26th January, 2001. This award is in recognition of his distinguished

services of high order in the field of Trade and Economic Activity.

• First National Award for Bio-tech Product

Commercialization in May 2003.

• National Award for Research and Development - 1989

• International Seeds and Science Technology (ISST)

Award-1990

FICCI award for notable contribution to Indian Seed Industry -

1990

199
 Future challenges for Mahyco

Strategic focus

Food for every one: Indian agriculture faces tremendous

challenges of producing enough food for its growing population. This

must be accompanied on same or declining land mass. There is a

continuing need to increase food production in the developing countries.

And this increase has to come from increased yields from major crops

grown on existing cultivable lands. Many approaches will have to be

deployed simultaneously to double India's food production by 2025 and

Mahyco is a leader in R and D for these field operations in the private

sector.

Pest and Insect Control: Insects not only cause direct loss to

the agricultural produce, but also indirectly due to their role as vectors of

various plant pathogens. In addition to direct losses caused by insects,

there are additional costs in the form of pesticides applied for pest

control, currently valued at US $10 billion annually. In crops such as

pearl millet, sorghum, pigeon pea, chicken pea and groundnut grown

under subsistence farming conditions in the developing countries, the

losses due to various biotic and abiotic factors have been estimated to be

over U S $ 2 billion annually. Massive application of pesticides results in

adverse effects on the beneficial organisms leaves pesticide residues in

the food causing environmental pollution. In addition, the target pests

evolve and become resistant to the pesticide, requiring higher volume of

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spray for control. As a result, the chemical control of pests is under

increasing pressure. There is a greater need to develop alternative or

additional technologies, which would minimize pesticide use, and

provide adequate crop protection for sustainable food, feed and fiber

production in the future.

Besides the insect pests, diseases caused by Viruses, bacteria,

fungi and other micro organisms are emerging and pose greater threats to

Indian farming community. A number of conventional and

biotechnological methods that are now available make it possible to

transfer, track, isolate and study specific genes for specific traits.

With the advent of genetic transformation techniques, it is now

possible to insert genes in plant that provide a unique trait. Technologies

are now borderless, genes from bacteria can be transferred to plants or

genes from unrelated plant species can also be transferred. For example,

gene from bacterium such as Bacillus thuringiensis (Bt) has been

identified and through plant transformation introduced in crops for pest

control on a commercial scale.

Important Observations

(i)Mahyco has invested considerably in its R&D during 1998 to

2003.

(ii) Genetically engineered cotton containing the 'Cry 1 Ac' gene

from the bacterium Bt has been brought in the country. The Bt cotton

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hybrids which contain the 'Cry 1 Ac' gene, makes it resistant to the cotton

bollworm pest that inflicts heavy damage to the crop all over India. As

this is a genetically enhanced product, regulatory approval is required

from Govt, of India. The clearance was given by the Genetic Engineering

Approval Committee (GEAC) under the Indian Ministry of Environment

and Forests (MOEF).

(iii) Plans to develop genetically modified Rice, Wheat,

Sorghum, Brinjal, Tomato etc. Mining microbes and plants for

agronomically useful genes from indigenous sources native to our

country to be introduced in crop plants.

(iv) Heavy investment in the R and D, but the commercialization

of products has to undergo long waiting period and this makes the

activity prone to economic losses.

This case study clearly brings out the aspects of agricultural

biotechnology skill sets required by this industry which has international

association for Bt cotton with a giant company Monsanto. The skill sets

can be understood from the R& D profile of the company and is seen that

they are as have been listed in the questionnaire. The strategic focus tells

about the HRP and D aspects of this growing company.

The strategic focus which has been described in more details, as it

describes some of the operational details of agricultural biotechnology.

Though the focus of present study is on bio Pharma as an example, the

??55..

202 V -
description of operational details is in order. It can be seen that the

biotechnology techniques used are same, and as mentioned in chapter II

the description related to raw material and consequent changes using

these techniques differs in the results and intermediate descriptions are

similar.

5.4 Conclusion

Indian scenario has been presented in the context of global biotech

and it is seen that Several American and European companies are facing

resource constraints. For increasing productivity one way for them is to

develop collaboration with companies with those resources at a lower

cost. With its abundant high quality-low cost manpower, India is

emerging as a partner of choice.

India's major biopharmaceutical companies are now accelerating

efforts to get bioequivalent versions of patented, well-characterized

recombinant proteins onto the market before 2005. The small biotech

companies are focusing on innovative research, and are picking niches

where there is little competition. Bioinformatics companies are other

players who are benefiting from an intellectual property driven model.

The four case studies presented are representative, for knowing

the biotech companies in terms of products, operations, market position

and HR scenario, for example Biocon, showing HR parameters as an

illustration of results good HR practices for retention. There is general

absence of systematic information about knowledge skill sets and

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competencies required in biotech business. This portrait of Indian

scenario has provided sufficient backdrop for understanding description

in chapter III Biotech Businesses- Operations and Organization, HR

management in biotech companies in India, and Chapter VI Human

Resource Planning and Development in biotech companies.

ENDNOTES

^ http;//www.biotech-india.com/biotechJndustry.htm

2 http://www.ey.com/global/download.nsf/lnclia/BioTechRprt2004

/$file/BiotechRpt2004.pdf

3 http://www.apidc.org/

* http://www.wto.org/english/tratop_e/trips_e/t_agmO_e.htm

5 http://www.wipo.org/treaties/en/ip/paris/

6 http://www.worldtradelaw.net/doha/dohatexts.htm

^ http://dbtindia.nic.in/biotechstrategy/Biotech%20strategy.doc

8 http://www.fbae.org/channels/views/comments_on_biotech_policy.htm

9 http://www.smibusiness.com/marketsegmentationimp.html

10 http://www.hinduonnet.com/fline/fl2201/stories/20050114G029095G0.htm

Frontline, Volume 22 - Issue 01, Jan. 01-14, 2005, India's National

Magazine from the publishers of THE HINDU

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