After the 3rd wave of Covid-19, in India business community is aggressively tilted towards the pharma manufacturing business due to the evergreen behavior of this business in all worst situations. In this article, we will discuss the 5 benefits of purchasing a running Pharma plant over installing a new one.
Many people are willing to buy running pharma formulations plants but some people prefer to install a new plant of their own choice at their preferred location. It sounds good in the context of easiness to run business in the local residential city. However, all business commitments are not fulfilled in that decision. Both choices buying a running plant and installing a new one have their Pros and cons.
Let’s discuss in detail all possibilities of the pharma manufacturing business. We will discuss all possible ways of entering this business. We will keep factor in mind that you are entering this business from another one or changing your existing business
5 Benefits of purchasing a running Pharma plant
- If you choose buying a running plant over installing a new one then you are in earning stage first day of the aquiring the business, other side you have to wait for about 2 years to create first bill of sale when you go for installing a new pharma plant.
- You will get a good will of customers who are already associated with the plant. If the plant was doing third party manufacturing for some parties they always prefer to live the plant whether the owner of the plant changes becuase they have pending packing material remains in the plant. It is not easy to leave a plant for a third party service seeking party.
- Time is very important factor in every business. It is very time consuming to set up a new pharma plant these days because there are lots of regulatory function in plant set up process. These all things takes time and minimum 2 years are very nominal for intalling a pharma plant. It is huge time for a business owner.
- The cost of a new plant installation have been reached at new level in the decade of 2020s, now it is very hard to set up a plant under Rs. 5 crore in India. The cost of building and machineries raised at rocket high in last few years so that buying a runnig plant can be proved more cost efficient in comparison of new plant installation.
- When you buy a running plant you get thousands of product permission on the manufacturing licenses of plant, rather the cost of permission is very significant but age of product permission is very crucial when you are planning to take part in a Government tender. Product permission is a very big assest for any pharma manufacturing plant.
Disadvantages of purchasing a running pharma plant over installing a new one
- When you buy a running a pharma plant, there is first and very possible drawback is the life of machinery is consumed by the earlier owner of the plant. However it is not always happened when you buy a running pharma plant.
- The building of plant remains old in comparison to the new one, it requires regular maintainence. In the modern day pharma plants are installed on the puff-panel structures old plants usually are built by bricks walls. It can hurt you when you are going to take some advance certifications like, WHO-GMP, PIC/S etc.
- History of a plant sometimes chases for a long mile, some pharma plants have bad history in drug department and market. If a plant is known for samples failed in the drug department that history can dent the business of new owner.
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Challenges in starting pharma manufacturing business?
Pharma manufacturing business is not as simple as other mfg businesses are, pharma manufacturing is a highly regulated business. Each step taken in this business is needed approval or permission from Drug regulatory authorities.
Pharma manufacturing is associated with the health of people. Therefore, the quality of medicines is crucial. It is very necessary to maintain the quality of products by every manufacturer. This business is very rewarding but also tests the patients of business owners because it requires a very high level of alertness to rule out any possibility of mistake during manufacturing a drug.
Another challenge in this business is to get permission for every product from the State drug controller or CDSCO. Before manufacturing a new product it takes so much time and effort to fulfill all legalities.
You can’t take purchase orders of a new product without getting permission for manufacturing a particular product.
However, there are a lot of liabilities in the manufacturing of pharmaceutical products but it is a very satisfying and rewarding business. When you do this business you feel satisfied that you are serving humanity in a way of manufacturing medicine for them.
The decision to buy running or install a new pharma plant depends on many factors that can play a vital role in decision making. A true business-minded person always goes for a settled business that gives him the edge over the new business setup. The choice may vary from person to person but the bigger picture shows clearly that buying a running pharma plant is always a proven smart decision. Ultimately time is a very crucial factor for any business. The time of two years that require to set up a new business is a big stake for every businessman. In my opinion to buy. In this article, we discussed the 5 Benefits of purchasing a running Pharma plant over installing a new one, hopefully, you find an insight to make a decision.
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The author has 20 years of experience in the Pharmaceutical Manufacturing Companies. Have exposure to all audit documents for WHO-GMP, PIC/S, USFDA, Export documents, US-FDA documents, Validation of Pharma machinery, and Quality Control Instruments. Expert in Pharma Plant Setup and sale and acquisition of running pharma company.