Concoction of medicines is a lucrative business in Madhya Pradesh. As many as 50 SMEs thrive on supply orders from a small government entity MP Laghu Udyog Nigam, which feeds medicine store rooms in government hospitals.
To try his business acumen a small entrepreneur Radha Sharan Goswami from Aser village of Datia district (near Gwalior) ventured into business in 1977 with a small firm, Hind Pharma, in Govindpura industrial area in Bhopal. He started exploring international market in 2006. Within two years he has broadened his market base and is also planning to increase the size of his export basket. Also he is in talks with some companies of international repute to develop distribution network in other nations. “Lay offs?” he says , “I need 75 more personnel within three years.”
In 2006, he decided to stay away from government tenders and obtained Rs 2 crore loan from Punjab National Bank to set up a new pharma unit in Bhopal that conforms to cGMP norms (current goods manufacturing practices) norms. Initially, he tried his skills in various trade fairs of international repute and successfully developed contacts with various companies.
After facing two recessions — in 1982 and 1999 — coupled with occasional difficulties from government documentation procedures, his small-scale firm detached itself from government tenders to consolidate business in international market.
“Now I don’t participate in government tenders floated by MP Laghu Udyog Nigam, it makes no sense — a sheer wastage of time and money,” says Goswami.
He now focuses on broadening his market platform and developing new contacts with various companies abroad as he believes it pays. “If you remain glued to your computer and mobile screen waiting for e-mail replies to pop up you are prone to lose in business,” he says adding, “I don’t deal with any company which ignores eye-to-eye, personal meetings. There is no room for doubt between me and my client.”
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After visiting more than 30 countries, Goswami is exploring possibilities in newer markets of Algeria, Trukey, Sudan and Ukraine. His is the only SME company in Madhya Pradesh that exports products to UK as tougher norms laid by the UK government restrict many.
To cope with the ongoing recession, he has no specific strategy as he is playing on thin margins as higher bank rates test him each day.
“Global recession has not affected Indian companies, but costly bank credit makes hundreds of them sick each year. Normally SMEs in our state or India hardly gets export credit, duty drawback, excise input refund or credit link subsidies offered by Central or state governments. If governments deliver on promises, Indian SMEs can turn into job-banks. They can defy any recession.” The procedural difficulties hinder growth of a number of SMEs like Hind Pharma.