India sitting on 500 million syringe inventory as demand goes down

Not only are India’s vaccine makers sitting with millions of doses of Covid-19 shots inventory, their ancillary industry and the syringe manufacturers too now are hit with demand going down.

According to rough industry estimates, domestic syringe manufacturers are sitting on at least 500 million syringes inventory.

“The Indian industry is sitting on an approximate inventory of 500 million syringes, of which 200 million may be 0.5 ml AD syringes,” revealed a source in the All India Syringe and Needle Manufacturers Association (AISNMA).

The 0.5 ml AD syringes were the ones used primarily for Covid-19 vaccination. Not only are private hospitals not placing orders, industry insiders say that the Centre too has deferred taking delivery of syringes citing space constraint at depots.

Narendra Jain, president and CEO of Iscon Surgicals, said that in 2020-21 they had orders for 290 million 0.5 ml AD syringes, of which they had supplied around 214.3 million syringes. Around 54.4 million syringe delivery was postponed due to excess inventories. “Government depots are refusing to take delivery due to space constraints,” he says.

AD syringes are designed to prevent re-use of non-sterile syringes, and are used primarily by governments and global non-profits for vaccination drives.

Jain further points out that after India restricted syringe exports around October 2021, overseas buyers have made long-term contracts with other suppliers. “Now, it’s too difficult to get enquiries as the global demand for AD syringes have considerably fallen,” he says, adding that they have an inventory of 20 million syringes now waiting to be lifted.

All manufacturers had enhanced capacities – Iscon, for example, had ramped up AD syringe capacities from 30 million per month to 50 million per month. Another leading syringe manufacturer, Hindustan Syringes and Medical Devices (HMD) too had ramped up capacities from 500 million AD syringes annually before Covid-19, to 1.5 billion AD syringes by March 2022.

“The machines and moulds were air-lifted by paying huge shipping costs, with the only objective of standing by the people of this nation during times of dire need. Now we are afraid that these machines will remain idle,” Jain says.

Rajiv Nath, chairman and managing director of HMD, the world’s largest syringe maker, said that capacity utilisations had touched 100 per cent by August-September of 2021. All manufacturers were then scrambling to add capacities to meet demand. By March this year, HMD’s capacity touched 4 billion syringes annually, of which 1.5 billion were AD syringes.

The government has also cancelled several orders of various manufacturers giving quality reasons, the industry pointed out.

To add to their woes, input costs have gone up during the second half of fiscal 2022.

Nath highlights that there has been a rise of 25 per cent in case of polypropylene and similarly, a 15-20 per cent rise in paper or cardboard and plastic packaging. Jain too says that overall, there has been a 40 per cent rise in raw material costs to make syringes.

“Manufacturers have to cut back production to reign in the excessive inventory piled up and balance their cash flows. Depressed market conditions are compounding the problems further. Ideally manufacturers need to increase prices by 5-7 per cent but market conditions can't sustain this,” Nath says.

The demand in the private market is down too.

Akshay Nahar, owner of Ortholink Marketing, a distributor of surgical products based out of Pune said that there is virtually no demand for AD syringes from hospitals. He adds that demand for the disposable syringes is there, but that is normalised at the pre-Covid levels.

Jain and Nath both agree, and say that now they are focusing on re-converting some of their AD syringe capacities back to disposable syringe capacity.

DEMAND FOR SYRINGES

500 mn – Inventory of syringes in country

Of this 200 mn – 0.5 ml AD syringes used for vaccination

2-3 times – capacity expansion done by syringe makers

40% - increase in raw material prices in H2FY22

Govt is deferring order deliveries citing space constraints at depots

Private market demand for AD syringes is almost nil

Manufacturers now plan to re-convert AD syringe capacity to disposable syringe capacity