Singapore, Feb 12, 2010: This interview is part of the cover story- "CMOs in India, China to grow at 20 percent." Mr Sumanth Kambhamettu, Program Leader Pharmaceuticals & Biotechnology, Frost & Sullivan, Global Business speaks about strengths, weaknesses, advantages of Indian and Chinese CMOs.

 Between Indian and Chinese CMOs, who has more advantages in attracting the sponsor?

It’s difficult to say who has more advantages as the skill sets in each countries are different. China has the advantage of manufacturing bulk intermediates of economic scale with low labor cost. While, India offers highly skilled labor at 40 percent-50 percent low cost as compared with Western countries. Besides, India offers high-end capabilities in contract research. While selecting between Indian and Chinese companies, the Western companies will look at both countries as each offers distinctive advantages to the big companies.

Considering the opportunity and growth, do you see the CMOs expanding their facilities and operations?

In the past we have seen the Indian companies acquiring Western companies. They have done with a specific reason because they need to be close to the client so as to provide confidence to the customers. This will provide a competitive advantage to the companies in terms of logistic and production costs, among other benefits. As far as Chinese CMOs are concerned, I haven’t come across any such initiatives. I feel the focus of the Chinese CMOs is still towards the local market, which is considered to be big.

Do you see the companies still continuing to face pricing pressure?

In the last few years, there has been an increase in the number of me-too companies that provide similar services without product differentiation. This has led to a situation where consolidation is virtually impossible to avoid. In the current economic crisis clients are not willing to spend easily. These issues led to certain companies being acquired, with certain companies shutting down or downsizing. These things are bound to happen. Unless, the companies move up the value chain in high-end services, it will be difficult for them to sustain the other recession.

Mr Sumanth Kambhamettu, Program Leader Pharmaceuticals & Biotechnology, Frost & Sullivan, Global Business

The cover story can be found here:  CMOs in India, China to grow at 20 percent

Read the Global Market report at: CMOs in India, China to grow at 20 percent: Global market

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