With an aim to facilitate services to the Africa region and aid pharma exports, the Civil Aviation Ministry has asked the Pharmaceutical Export Promotion Council (Pharmexcil) to present the industry’s proposed export loads to the Africa market.
It is also planning to discuss the issue with government authorities and industry stakeholders through a video conference early next week.
Since the onset of a novel coronavirus pandemic across the globe, the Indian pharma industry has also witnessed an increase in freight charges to all geographies. To highlight the problems faced by the industry due to the increase in freight charges during the video conference, the Council has asked industry stakeholders to share their proposed load of pharma products to the said destination.
Reportedly, apart from a few countries, i.e. Tanzania, Egypt, Sudan, Mozambique, Cameroon etc., the export growth performance in the Africa region was negligible and it recorded negative or single-digit growth during FY 2020 as against the previous year.
A few industry players explained the situation to Express Pharma.
Dinesh Dua, Chairman, Pharmexcil and Director, Nectar Lifesciences informed, “Before the COVID pandemic, the Air Freight Traffic on Ethiopian Airlines was normally 4000 MT per month to Africa, which was split between cargo flights i.e., 3000 MT and passenger flights; 1000 MT. They have a 70 per cent share in air cargo traffic from India to the African continent. The rest of it handled by the Emirates and other flights, which usually ended up with the backlog.”
He continued, “Ethiopian Airlines is cheaper than Emirates usually by Rs 100 per kg. Currently, the cargo load is 3000 MT because of no passenger flights. This has created a huge backlog and the rates are higher than normal. Ethiopian Airlines have three destinations in India; namely, Delhi, Mumbai and Chennai, which is why the above load is outbound from all three points.”
Nipun Jain, Chairman, Small and Medium Pharma Manufacturers Association commented, “We have sizeable exports of pharma products to the Africa region. However, since the time COVID-19 pandemic has begun the freight charges to these countries have doubled which is ultimately affecting the business.”
He also pointed out that some of the countries like Sudan, Ethiopia etc. are the landlocked countries which do not have access to sea activities. Hence, the only option is to ship consignments through air cargos. He said, “However, though there is an increase in freight charges, our partners in those countries are not willing to increase the price of consignments which is affecting business significantly. Hence, if we get some consideration from the government in this respect, it will certainly benefit the industry.”
Africa is the second-largest importer of Indian pharma products, particularly from MSME players. In Africa, there are nearly 15 major destinations where the Indian pharma companies export their products.
Bhavin Mehta, Director, Kilitch Drugs said, “After regulated markets, African continent occupies the second position in terms of exports from India, as the continent is open for imports from neighbouring countries. But, price is the sole factor on which products are being sold and connecting with some of the key markets like Nigeria, Ghana, South Africa, Kenya and Ethiopia might get complicated due to addition of air freight costs. It makes products unviable for selling in the local markets.”
August 7, 2020