API park to be ready by June for pharma industry

Bangladeshi pharmaceutical companies will see the existing intellectual property fees on imports of raw materials for medicines go up following the country's graduation from the least developed country status. This elevation is expected to lead to a rise in production costs and push the pharmaceuticals industry into a crisis.

Stakeholders concerned, however, hope that the sector will be able to ward off the challenge by starting production of the necessary raw materials in the Active Pharmaceutical Ingredients (API) Industrial Park even before the LDC graduation.

Syed Shahidul Islam, project director of the API Industrial Park, said all the infrastructure of the pharmaceutical industry park would be completed by June this year.

"Work on a section of the Central Waste Treatment Plant (CETP) will also be completed during this period. Companies that have been allotted plots can start production of raw materials in the industrial park after this June if they want," he told The Business Standard.

Some 27 companies have obtained plots for setting up factories in the industrial park, he mentioned, adding, "Of those, constructions of the Acme and Health Care factories have come a long way. These factories are expected to go into production by 2022."

Pharmaceutical companies concerned also have expressed the hope that their factories will be able to start production in June 2022.

Rafiqul Islam, company secretary of Acme Laboratories, said construction work on the Acme factory building would be completed by December this year. "It will take some more time to complete other preparations, including setting up capital machinery. We hope we will be able to start production in June 2022."

The UN Committee for Development Policy (CDP) on 28 February this year made final recommendations for Bangladesh's transition to the status of a developing country after reviewing the country's position in three indices –per capita income, human resource development and economic and environmental vulnerability. As per the recommendations, the country will get official recognition as a developing country in 2026.

Because Bangladesh is currently a least developed country, pharmaceutical companies here do not have to pay intellectual property rights to the institutions that have developed particular medicines.

The API-producing countries are offering this facility to curb rises in drug prices in poor countries. And taking advantage of this facility, the pharmaceutical industry of Bangladesh now stands on a solid foundation.

At present, the country's pharmaceutical industry market has surpassed Tk25,000 crore with an annual growth of over 10%. The sector's annual export earnings are also over Tk1200 crore.

However, Bangladesh is importing 97% of the raw materials of the pharmaceutical industry through open patent facilities.

According to existing rules, the country will no longer enjoy this facility once it graduates to the developing country status.

Experts think the pharmaceutical industry of the country will face serious challenges when this facility is no more there.

"After LDC graduation, our pharmaceutical industry will be in trouble. It will not be able to survive in the export market by buying raw materials at higher prices, as the API Industrial Park is not ready yet", said Professor Rehman Sobhan at a seminar organised by the Centre for Policy Dialogue on the impact of LDC-graduation on businesses.

However, Shahriar Alam, state minister for foreign affairs, said that the API Park was ready. "Now the companies can go into production if they want," he said quoting Salman F Rahman, private sector industry and investment adviser to the prime minister.

On a recent visit to the pharmaceutical industrial park under construction at Gazaria in Munshiganj, The Business Standard found that construction of necessary infrastructures, such as the development of plots, construction on roads, drainage system, power transmission line, power sub-station, main and sub-lines for supplying water, had come to an end. 

Construction work on the Central Waste Treatment Plant (CEPT) has also started.

Project Director Shahidul Islam said investments in the API Industrial Park had been exempted from all types of taxes, including income tax and value-added tax (VAT) till 2032.

The 27 companies that have got plots in the industrial park include Square, Beximco, Incepta and Acme. A maximum of 10 acres and a minimum of 5 acres of land have been allotted for each of the companies.

However, in the case of companies that will be allotted plots later, plot sizes will be smaller.

The API park project got approval of the Executive Committee of the National Economic Council (Ecnec) in 2008. After several revisions of its completion deadline and cost, the project is now scheduled to be completed in June 2021 at a cost of around Tk400 crore.