Page 146 - CW E-Magazine (26-3-2024)

Pharmaceuticals Hydrocarbons

MILESTONE ENERGY SECURITY
Eris acquires Biocon Biologics domestic branded Dependency on oil imports rises in Apr-Feb; likely

formulation business to hit fresh full-year high in FY24

Eris Lifesciences has announced This acquisition also provides imme- Growing demand for fuel and other stood at 85.5% in FY22, 84.4% in FY21, hydrocarbon exploration. While there
the acquisition of Biocon Biologics’ diate synergies with Eris’s recent acqui- petroleum products amid stagnant 85% in FY20, and 83.8% in FY19. has been a pick-up in electric mobility
India branded formulation business for sition of Swiss Parenterals business. The domestic crude oil output resulted in adoption and blending of biofuels with
Rs. 1,242-crore. Eris has also signed a Biocon product range can be quickly India’s reliance on imported crude The Government wants to reduce conventional fuels, it is not enough to
10-year supply agreement with Biocon scaled up by leveraging the product port- increasing to nearly 88% in April-Febru- India’s extreme reliance on imported offset petroleum demand growth.
Biologics as a part of this deal. folio of Swiss, which consists of over 240 ary, indicating that oil import depen- crude oil, but sluggish domestic oil out-
unique molecules. “This deal, combined dency for the full fi nancial year 2023-24 put in the face of incessantly growing The calculation of the extent of
Over 430 employees associated with the acquisition of Swiss Paren- (FY24) could breach the all-time-high demand for petroleum products has import reliance is based on the domestic
with the business are expected to tran- terals that we announced last month FY23 levels. been the biggest roadblock. In 2015, the consumption of petroleum products and
sition to Eris, ensuring continuity for will turbocharge our entry into the government had set a target to reduce excludes petroleum product exports as
both employees and patients. folios contribute Rs. 80-crore each. The Rs. 30,000-crore India branded injectables As per latest data released by the reliance on oil imports to 67% by 2022 those volumes do not represent India’s
oncology portfolio includes novel bio- market and pave the way for our next oil ministry’s Petroleum Planning & from 77% in FY14, but the dependency demand. With a refi ning capacity of a
Biocon Biologics’ India branded logic drug, nimotuzumab, and biosimi- Rs. 1,000-crore vertical in the next 3-4 Analysis Cell (PPAC), the country’s oil has only grown since. Heavy reliance little over 250-mtpa, India – the world’s
formulation business has revenue of lars of trastuzumab and bevacizumab. years,” said Mr. Amit Bakshi, Chairman import dependency was 87.7% in the on imported crude oil makes the Indian third-largest consumer of crude oil and
Rs. 360-crore, which represents a valu- and Managing Director of Eris. 11 months to February, up from 87.2% economy vulnerable to global oil price also one of its top importers – is a net
ation of 3.4x of revenues. Of the The transaction is expected to in the corresponding period FY23. For volatility, apart from having a bearing exporter of petroleum products.
Rs. 360-crore, two products – Basalog come into effect before April 15, For Biocon Biologics, the deal will full FY23, reliance on imported oil was on the country’s foreign trade defi cit,
and Insugen – contribute Rs. 100-crore 2024, subject to customary closing help reduce debt it had taken to fund the 87.4%. According to industry insiders, foreign exchange reserves, rupee’s India’s domestic consumption of petro-
each. Oncology and critical care port- conditions. acquisition of Viatris’ biosimilar business. like in the last fi nancial year, import exchange rate, and infl ation. leum products in April-February rose
dependency in crude oil for the entire over 5% year-on-year to 212.2-mt,
KEY STARTING MATERIAL FY24 could be a tad higher than the Cutting costly oil imports is also a underscoring robust demand, particularly
Aurobindo Pharma to commence Pen G production April-February level. fundamental objective of the govern- for transportation fuels petrol and diesel.
However, domestic crude oil production
ment’s push for electric mobility, bio-
Given India’s rapidly growing energy fuels, and other alternative fuels for trans-
for the year was nearly fl at at 26.9-mt.
in Q1FY25 demand, reliance on oil imports has portation as well as industries. Over the Crude oil imports in the fi rst 11 months of
been rising continuously over the past past few years, the government has FY24 rose 0.4% year-on-year to 212.6-mt.
Aurobindo Pharma expects its plant capacity will be utilised internally few years, except for FY21, when also intensifi ed efforts to raise domes- Additionally, petroleum product imports
Rs. 2,400-crore Pen-G (penicillin) plant and the rest will be available for markets. demand was suppressed due to the tic crude oil output by making explo- increased to 43.8-mt from 40.2-mt
in Andhra Pradesh to start trial produc- COVID-19 pandemic. Reliance on ration and production contracts more a year ago. Petroleum product exports in
tion in April, commercial production Mr. Nityananda Reddy, Vice Chair- imported crude to meet domestic demand lucrative and opening vast acreages for April-February rose 4.2% to 57.3-mt.
in a couple of months, and ramping up man and Managing Director, said the
of production will happen during the company is aiming to compete with DEMAND OUTLOOK
second quarter of next fi scal, a senior China when it comes to pricing of
offi cial of the Hyderabad-based drug Penicillin G. Upcoming elections and harvest season to spur
maker has said.
“We have anticipated the price diesel demand in Q1FY25
Mr. Santhanam Subramanian, Chief under Production Linked Incentive (PLI) erosion (of Penicillin G) that will take
Financial Offi cer of Aurobindo Pharma, Scheme for Promotion of Domestic place. We have put up an integrated The upcoming Lok Sabha elections bpd in the fi rst three months of 2024, except fuel oil and some minor products.
also said the company is constructing Manufacturing of Critical Key Starting plant. Right from scratch to the fi nal and rise in harvesting activities will the report said. LPG and diesel recorded the highest
a total of 10 new facilities, which are Materials (KSMs)/Drug Intermediates product. We are competing with China. expand the demand for diesel in India year-on-year (Y-o-Y) growth as house-
expected to capitalise in the next one and Active Pharmaceutical Ingredients Ultimately, we should be producing the by 75,000-bpd (barrels per day) during According to the report, overall hold consumption remained robust due
to two years. Currently, the fi rm has (APIs) in the country, will have a pro- product at a cost equivalent to China. April-June, S&P Global Commodity demand for oil products rose by 132,000- to cooler weather in northern India,
a total of 25 manufacturing and pack- duction capacity of around 15,000-tpa. The idea is to give a price competitive Insights has said in a report. bpd or 2.4% in February, as compared while the consumption of diesel rose
aging facilities at various locations. product to the existing products in to the same period last year, with a rise in line with the receding winter and
The Pen-G plant, which was approved Mr. Subramanian said 60% of the China,” Mr. Reddy said. Diesel demand had risen by 60,000- in consumption seen in all products increasing mobility, the report said.

146 Chemical Weekly March 26, 2024 Chemical Weekly March 26, 2024 147

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