SEAGULL PHARMA

ABOUT US
Seagull Pharma a more than two decade old
pharmaceutical manufacturing & marketingcompany is
today a well established company having its marketing
operations spanninga large part of the country.Most
modern production facilities are equipped to manufacture
tablets
(coated, uncoated,sustained released, chewable and
dispersible),
capsules & dermatologicals
(ointments &lotions).Team at the production facilities is
constantly studying and upgrading the processes and
staff competency as required by advancements in the
pharma industry. Quality Control Department isequipped
with modern equipments to carry out quality checks from
raw material to packingmaterials upto finished
products.To double check the quality assurance of our
products we establish the quality throughgovernment
approved external quality control agencies.Self life and
stability studies are conducted on all products produced
by us. The production teamat their facilities undergo
regular health checks. Regular training programs are
conducted toupgrade their skills. All this helps us to lay
down our quality parameters which are well abovethe
acceptable norms.The companys research and
development team is constantly carrying out study to

understandthe requirements and carry out developments

to best suit the needs. Most of the products
aremanufactured at our manufacturing facilities in
Bhiwadi 60 km from Delhi, the Capital of India. The
factories are most modern and certified as per
GMP/WHO GMP
Standards. Some of the companys products are also
contract manufactured by its business associates who also
havestate of the art manufacturing facilities and are also
WHP GMP certified.All products that reach our clients
through us are supervised and quality checked at every
stage.We at Seagull believe that every manufacturing
endeavor must not only yield optimum
customer satisfaction but also fulfill the customers ever
changing needs.A large part of the companys business
involves ethical marketing of prescription
products.Products are extensively prescribed all over the
country and we ensure satisfactory customer service in
terms of availability. They cover almost whole of
India and Nepal with variousdistribution centers from
where a network of 300 wholesalers are supplied. They
have a welldeveloped professional team of 150 persons
covering all important cities and towns.

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HISTO RY
Mr. D. Dogra Mr. S. MalhotraDirector DirectorSeagull
was incorporated in 1981 as Seagull Labs (I) Pvt. Ltd. to
undertake marketing of Pharmaceutical Formulations.
In 1985, Seagull Pharmaceuticals Pvt. Ltd. was
incorporated togive focused attention to manufacturing
activities. The founding members Mr. S. Malhotra andMr.
D. Dogra along with the employees have made the
company what it is today and carved aniche in the minds
of the Medical Professionals.From the very onset Seagull
brands like
Capex Expectorant
and
Aglow-Fe
started enjoyingmajor market shares so much so that well
established multinationals were forced to monitor
thegrowth of their brands in the same segment. Since then
the company's synergistic approach hasresulted in
remarkable success in manufacturing and marketing of a
wide range of products invarious therapeutic segment
comprising analgesic, anti-inflammatory drugs, nutritional
products, products for respiratory segment
and antibiotics.In 1989, Seagull started its Ayurvedic unit
and commenced manufacturing with the developmentof

three ointments Zerub (rubefacient), Zefort (arthritis) and

Xorexin (bed sores).
COMPANYS VALUES
Creativity leads to innovation which lays the foundation
for success.Innovative and updated technology to produce
the best quality products.Utmost the employees,
customers and society we live in.Respect the employees
and their contribution at workplaceCommitted to the
highest standards of ethics and integrity.Trust in the
relationship with clients.

The pharmaceutical industry is the worlds

largest industry due to worldwide
revenuesapproximately US$2.8 trillion.
Pharma industry has seen major changes in
the recent years that place new demands on
payers, providers and manufacturers.
Customers now demand the samechoice and
convenience from pharma industry that they
find in other segment.Indian Pharmaceutical
Industry is poised for high consistent growth
over the next few years,driven by a multitude
of factors. Top Indian Companies like Ranbaxy,
DRL CIPLA and Dabur have already

established their presence.The

pharmaceutical industry is a knowledge
driven industry and is heavily dependent
onResearch and Development for new
products and growth. However, basic research
(Discoveringnew molecules) is a time
consuming and expensive process and is thus,
Dominated by largeglobal
multinationals.Indian companies have only
recently entered the area. The Indian
pharmaceutical industry cameinto existence
in 1901, when Bengal Chemical &
Pharmaceutical Company started its
maidenoperation in Calcutta. The next few
decades saw the pharmaceutical industry
moving throughseveral phases, largely in
accordance with government policies.
Commencing with repackagingand
preparation of formulations from imported
bulk drugs, the Indian industry has moved on
to become a net foreign exchange earner, and
has been able to underline its presence in the
global pharmaceutical arena as one of the top
35 drug producers worldwide. Currently, there
are morethan 2,400 registered
pharmaceutical producers in India.There are
24,000 licensed pharmaceutical companies.

Of the 465 bulk drugs used in

India,approximately 425 are manufactured
here. India has more drug-manufacturing
facilities that have been approved by the U.S.
Food and Drug Administration than any
country other than the US.Indian generics
companies supply 84% of the AIDS drugs that
Doctors without Borders uses totreat 60,000
patients in more than 30 countries.
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Seagull has two production facilities located at Bhiwadi
(Rajasthan), an industrial township inthe vicinity of Delhi
- the capital of India.These production units are laid out
according to
WHO GMP
regulations is shortly awaiting theapprovals.The
production units are manned by trained production staff
and senior supervisory staff for stringent production check
and in-process controls.
Production Capacities per annum
(in
millions)T
a
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t
s
6
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0
C
a
p
s
u
l
e

s
0
n
e
s

1
O
t
n
2

5
i
m
t
0

P a g e1 1
L
i
q
u
i
d
s
1
0
I
n
j
e
c
t
a
b
l
e
s
5
0
Seagull is fast moving towards doubling
the capacities by the year 2002.Their team at the
production facilities is constantly studying and
upgrading the processes andstaff competency as required
by advancements in the pharma industry.
PRODUCTS
Prescription Medicines
Aglow FeCapsule
AlertacTablet Neogat- 400Tablet
GravimemInjection
Exports

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Duozid-ForteTabletFertile TabletFertile-MTabletIbustal
CreamPainrub Gel
Their entry into the export market received a very
favorable response from overseas buyers primarily
because of their product quality, presentation and time
bound delivery. At present Seagull is exporting to:
South
AmericaU.K.NigeriaGhanaAfghanistanMyanmarPhilippinesSy
riaNepal
Brands are currently under registrations in various
countries. The company holds free salescertificate and
GMP certificate which are required by their foreign
buyers.They export their products under their own label
as well as under neutral label depending uponthe client
requirement
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Marketing Process and its Challenges
Seagull lavatories have successfully deployed a excess
of strategies to target the variouscustomer types, recent
business and customer trends are creating new challenges

andopportunities for increasing profitability. In the

pharmaceutical and healthcare industries, acomplex web
of decision-makers determines the nature of the
transaction (prescription) for which direct customer of
pharma industry (doctor) is responsible. Essentially, the
end-user (patient) consumes a product and pays the
cost.Use of medical representatives for marketing
products to physicians and to exert some Influenceover
others in the hierarchy of decision makers has been a
time-tested tradition. Typically, salesforce expense
comprises an estimated 15 percent to 20 percent of annual
product revenues, thelargest line item on the balance
sheet. Despite this other expense, the industry is still
plaguedsome very serious strategic and operational level
issues. From organizational perspective themost wellknown performance related issues are enlisted
below:Increased competition and shortened window of
opportunity.Low level of customer knowledge (Doctors,
Retailers, Wholesalers).Poor customer acquisition,
development and retention strategies.Varying customer
perception.The number and the quality of medical
representativesVery high territory development costs.High
training and re-training costs of sales personnel.Very high
attrition rate of the sales personnel.Busy doctors giving
less time for sales calls.

P a g e1 4
Poor territory knowledge in terms of business value at
medical representativelevel.Unclear value of prescription
from each doctor in the list of each sales person.Unknown
value of revenue from each retailer in the
territoryVirtually no mechanism of sales forecasting from
field sales level, leading tohuge deviations.Absence of
analysis on the amount of time invested on profitable and

not-so profitable.customers and lack of time-share

planning towards developingcustomer base for future
markets.Manual and cumbersome administrative systems
and processes designedwhich don't facilitate optimal
efficiency levels in sales teams.and many more
How to Access Market
Potential exporters should contact established importers
or processors in order to have their Sample evaluated and
to obtain advice on the possibilities for penetrating a
given market. Thecurrent market for Seagull Lavatories is
not short of supplies, and all things considered,
newcompanies seeking entry will have to compete with
traditional suppliers. The only way to penetrate the market
is to offer products of consistently high quality. Clean
products of assuredquality, good appearance, and if
possible, with properties distinguishing them from
their competitors (flavor, color, essential oil content) can
secure a place in European market. They can be sold at a
premium price over products from other origins. The
Seagulls consuming countriesin Europe are quality
conscious. Their quality requirements are more stringent,
particularly withrespect to cleanliness and chemical
contamination.
A. Domestic
Investigate the industries using Seagulls in their final
productsContact established traders and
manufacturersAcquire market information on price,

demand, quantity, supply season (peak season,lean

season, etc)
B. International
Approach traders/importers/end-users by contacts (mail,
electronic media, internet)Send offer with representative
samples

P a g e1 5
Get sample evaluated and obtain advice from the importer
for quality & quantity Negotiate contract on the basis of
quantity delivered, purchasing price, mode of
deliveryAnd payment
THE COMPETITION
The level of competition in very high in Acute
segment on day to day basishowever theDegree of
competition in not as much as high in Chronic
therapy area on dayto day basis.As doctor has to
prescribe drug for a long time in chronic cases and
patient issuppose toconsume it without any change
of brand. While in acute cases doctor ischanging
brandson day to day basis.
Current Distribution Chain in India
.The Indian pharmaceutical industry is continuing its
high growth rate at 13% for the last sixyears. From
foreign control, to domestic grass-roots growth, the Indian
pharmaceutical segmenthas evolved over the last three
decades. According to Bio Plan Associates recent
report,Advances in Biopharmaceutical Technology
in India, the Indian pharmaceutical industry has
the potential to reach $25 billion by 2010.This rapid
growth has yet to create radical changes in the Indian
distribution system. The mainhurdles include the highly

fragmented nature of the distribution network, limited

advancement in

P a g e1 6
regulatory reforms, and presence of strong resistance from
lobbies of traders involved in thesupply chain of
pharmaceutical products. Indias current distribution
situation creates greater risks for biotech products, which
require careful climate control throughout their transit
period.The lack of awareness toward the importance of
these requirements makes bio therapeutics evenmore
vulnerable to spoilage during distribution. Moreover,
the infrastructure for cold chainmanagement is still
developing in India. This situation has forced both
pharmaceutical and biotech companies to consider
alternate distribution systems. These attempts, however,
havefaced severe resistance by the lobbies of traders
involved in the channel.
Indian distributionSystem: The Current State
India is a geographically diverse country with extreme
climates that make distribution criticalfunction. The long
channel of distribution and high incidence in cadence of
brand substitutionmakes it mandatory for a company to
make all its stock keeping units (SKUs) available at
alllevels at all times. In India, most brands have generic

versions of drugs and retailers can usuallyobtain higher

margins with generics than for branded products. To
reduce risks of substitution,innovator companies must
make sure their products are made available to the
stockiest and retailshops. Drug distribution in India has
witnessed a paradigm shift. Before 1990,
pharmaceuticalcompanies used a different distribution
system, in which they established their own depots
andwarehouses that now have been replaced by clearing
and forwarding agents (CFAs).These organizations are
primarily responsible for maintaining storage (stock) of
the companys products and forwarding SKUs to the
stockiest on request. Most companies keep 13 CFAs
ineach Indian state. On an average, a company may work
with a total of 2535 CFAs. Unlike aCFA that can
handle the stock of one company, a stockiest (distributor)
can simultaneouslyhandle more than one company
(usually, 515 depending on the city area), and may go up
toeven 30 50 different manufacturers. The stockiest, in
turn, after 3045 days (a typical credit or time limit) pays
for the products directly in the name of
the pharmaceutical company. The CFAsare paid by the
company yearly, once or twice, on a basis of the
percentage of total turnover of products. In above Figure
shows how a manufactured product passes through the
company-owned central warehouse, which supplies it
to the CFA or super stockiest. From the CFA thestocks are
supplied either to the stockiest, sub-stockiest, or hospitals.

The retail pharmacy obtains products from the stockiest

or sub-stockiest through whom it finally reaches the
consumers (patients). Certain smallmanufacturers directly
supply the drugs to the super stockiest.Despite the rapid
increase in the number of stockiest and pharmacies, there
has not been a proportional increase in the volume
of prescriptions distributed. Thus, the efficiency of
thecurrent system has clearly not been demonstrated.
Further, it is estimated that more than three-fifths of
Indians still do not have access to modern medicines. This
clearly shows that the ruralmarket is largely unattended
and untapped

P a g e1 7
Large Untapped Rural Market
The growth of institutional sales had little impact on
the accessibility of medicine in rural areas,according to an

analysis by the Indian Retail Druggists and Chemists

Association.A large proportion of the rural population still
does not have access to proper medication and
thesituation may take long to improve. Rural areas
contribute around 21% to the total pharmaceutical market.
In 200607, the rural pharmaceutical market was
estimated at around$1.4 billion. Nearly 70% of Indias
population lives in rural areas where healthcare
infrastructureis poor. With increasing rural household
incomes, the rural market is becoming more
attractive.According to estimates by the Planning
Commission, rural households now spend 12% of
their income on healthcare.
Value Added Tax (VAT) Impact
With the introduction of VAT, medicine prices have been
standardized and price discrimination,in which different
states pay different prices for the same products,
has reduced. VAT has alsohelped reduce the illegal
interstate transfer of goods and the unethical interstate
trade for higher margins. Per the new rules, sales tax is
levied at each stage of value addition and credit for thetax
paid on the inputs can be obtained.
Futures challenges
Pharmaceutical companies in India have realized the
importance of SCM and are aggressivelylooking for ways
to improve the costs associated with SCM. Distribution
inIndia is proportionally much more costly than it is in
the US or EU. The companies, which havespent as much

as one-third of their revenues toward financing their

supply-chain operations,recognize that the cost of
logistics is very high in India. In US and EU, the
expenditure on SCMalone is perhaps 2%, whereas
in India it averages 46% of total sales. It s mainly
because inIndia the cost of drugs is very low compared to
the developed markets. Taking into considerationthe poor
infrastructure and extreme geographic conditions, it is
difficult to curtail the costinvolved in SCM.
Long-Channel Inventory Management
The multilayered distribution channel and lobbying at all
layers has been successful at preventing pharmaceutical
companies from bringing in significant reforms toward
higher trademargins, and at bypassing the multiple
distribution layers to reach customers directly.
Because pharmaceutical companies do not have direct
access to retailers data on sales (tertiary sales),most
pharmaceutical companies depend on sockets sales data
to monitor sales (secondary sales).The primary sale
involves transferring stock from the central warehouse to
its CFA. The medicalrepresentatives are given predefined
sales targets. To meet these targets they push inventory
onthe stockiest to levels that exceed the actual demand.
When the next level of sale does not take place, the
stockiest will either return goods to the company or the
stock expires.

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Increasing Competition between Wholesalers and
Retailers
Today, with so many mergers and acquisitions in the
Indian pharmaceutical industry, the number of stockiest
for each company has increased. Now two stockiest of the
same company may becompeting against each other.
Retailers take advantage of this situation by prolonging
the credit period and asking for more discounts, which has
an adverse effect on stockiest, because theyhave to
comply with the retailers.
International Competitiveness and Cold-Chain Management
Indian pharmaceutical companies are increasingly seeking
opportunities to supply drugs to theworld market. More
developed cold-chain management practices will be
required to achieve thisgoal. This is one of the major
challenges faced by the industry if they are to retain
productquality during shipment. Companies like Eli Lilly
in India have implemented initiatives such ashaving their
own vehicles equipped with cold-chain management

systems. Other companies suchas World Courier have

developed cold-chain management models to help
pharmaceuticalcompanies maintain the cold chain.
Conclusion
There can be various ways through which a
business organization canachieve success in the
market, but all those ways can be comprised into
asabove, then it can be rightly said that it revolves
specifically around threeparties or more; the
triangular linkages or the relationship between
thesethree parties (company, customers and
competitors) determine the successand failure of
business organization.
Manufacturers must ensure that their drug
reachescustomers with uncompromised quality.In
India, because manufacturers do not retain control over
the multilayered distribution system,the cold-chain
management process continues to be difficult and
expensive. However,manufacturers are increasingly
realizing the importance of an effective distribution
system, allthe way to the end-customer. Coping with the
challenges of streamlining the systems in Indiawill
ultimately benefit the patient and the healthcare system.