Alkem report safi

2015
A REPORT
ON
INDUSTRIAL VISIT TO
ALKEM LABORATORIES LTD., SIKKIM
Submitted To:
Mr. Eugene A Reuben
Submitted by:
ANMOL CHOWDHRY 14DM042
ANURAG GARG 14DM046
RUCHI AGGARWAL 14DM168
SABIR RAHIM 14DM169
SAFIUDDIN SYED 14DM170
SAGAR DESHMUKH 14DM171
SAHIL CHATTWAL 14DM174
SAHIL VOHRA 14DM175
SAKSHI TULI 14DM176

Alkem Laboratories Ltd.
2
TABLE OF CONTENTS
INTRODUCTION..........................................................................................................................................................3
COMPANY DETAILS....................................................................................................................................................4
a) The Indian Pharmaceuticals Market: ...............................................................................................................4
b) Alkem Laboratories Ltd.:.................................................................................................................................4
c) Basic Product Information:..............................................................................................................................4
d) The Alkem Sikkim Plant:..................................................................................................................................5
e) Financial Status:..............................................................................................................................................6
HR PRACTICES:...........................................................................................................................................................7
MANUFACTURING PROCESS:......................................................................................................................................8
Vials Process:.........................................................................................................................................................8
Tablet Manufacturing:...........................................................................................................................................8
 Dispensing..................................................................................................................................................9
 Granulation...............................................................................................................................................10
 Compression .............................................................................................................................................10
 Coating.....................................................................................................................................................11
 Inspection and Packing..............................................................................................................................12
THE ALKEM SUPPLY CHAIN .......................................................................................................................................12
 Suppliers:..........................................................................................................................................................12
 Distribution and Logistics:.................................................................................................................................12
PROMOTIONAL STRATEGIES:....................................................................................................................................13
OBSERVATIONS AND LEARNING OUTCOMES:............................................................................................................15
SIKKIM-A LAND OF OPPORTUNITY:...........................................................................................................................16
CONCLUSION ...........................................................................................................................................................17
REFERENCES.............................................................................................................................................................17

3
INTRODUCTION
As part of the curriculumfor the PGDMcourseoffered by the Birla Instituteof Management
Technology (BIMTECH), students arerequired to visit an industry wherethey learn about the
different challenges faced by real life professionals in managing differentareas of businesses
like Marketing, HR, Finance and Operations. This helps the students to obtain an insight about
the working of these industries and appreciate the efforts of managers in these industries.
We weretaken to Sikkimfor the Industrialtour, wherethere were sixdifferent
industries to be visited by different groups of students. The industry allotted to us was Alkem
Laboratories Ltd. which is a generic pharmaceuticals manufacturer. This report presents our
learnings fromthe industrial trip and other information about the company and the
advantages of Sikkimas a tax holiday zone.
We have found the visit to be quite interesting, beneficial and knowledgeable. We have tried
our level best to prepare an effective & creditable report.

4
COMPANYDETAILS
a) The Indian Pharmaceuticals Market:
The Indianpharmaceuticalsmarkethas characteristicsthat makeit unique. First,branded
generics dominate, making up for 70 to 80 per cent of the retail market. Second, local
playershaveenjoyeda dominantposition drivenby formulation developmentcapabilities
and early investments. Third, price levels are low, driven by intense competition. While
India ranks tenth globally in terms of value, it is ranked third in volumes. These
characteristics present their own opportunities and challenges.
b) Alkem Laboratories Ltd.:
Established in 1973 and headquartered in Mumbai, India, Alkem began operations as a
health caremarketingcompany.Alkemhas sincegrownto becomeIndia’sseventhlargest
pharmaceutical company with sales revenues exceeding USD 500 million with a CAGR of
16% over the last five years.
Alkem, one of the India’s leading generic and specialty pharmaceutical
companies, is a significant player in the branded drugs and generic drugs space. With a
wide ranging presence across acute and chronic therapeutic segments with substantial
brand share in the Central Nervous System, Gastro-intestinal, Anti-diabetic, Anti-
osteoporosis, Anti-malarial, Cardiovascular, Immunosuppressant, and Nutraceutical
segments, Alkem leads the Indian market in the Anti-infective and Pain Management
segments.
c) Basic Product Information:
Alkem’s success is highlighted by its leadership in the Anti-infective and Pain
Management segments. Of its portfolio of 800 brands, 3 brands, Taxim(Cefotaxim),
Clavam (Amoxicillin + Clavulanic Acid), and Sumo (Paracetamol) are ranked among the
top 25 brands in India, while 14 feature among the top 300 brands in the Indian market.
Alkem was the first Indian company to develop, manufacture& market the following
products in India:

5
 Anaestrazole
 Cefotaxime + Sulbactam
 Satranidazole
 Ceftriaxone + Tazobactam
 Cefixime + Clavulanic Acid
Alkem has also diversified into the health foods area with the following products:
 Jeevan prash – a tasty, Low Calorie & sugar free chyawanprash
 Blocal – Low Calorie Sweetner
 Salt Substitutes, Fat Substitutes and Sucralose based products – Jams, Cookies, Jelly,
Juices & cakes (Calorie Conscious and Diabetics), Cholesterol free edible Oil.
d) The Alkem Sikkim Plant:
The manufacturing facility at Sikkim was built in the year 2007 and is located at Kumrek,
Central Pendam, Rangpo, East Sikkim. The Sikkim plant has two separate and distinct
manufacturing blocks namely:
SALES BREAKUP
Chronic Segment Acute Segment

6
- General Block (G – block) equipped for formulation of Non-Penicillin / Non-
Cephalosporin products
- Cephalosporin block (C – block) equipped for formulation of dry powder injectables and
tablets
The production at Sikkim caters to the domestic business.
Average monthly production at Sikkim plant is about 70 lakh injections and 38 crore
tablets.
e) Financial Status:
The following is information on the financial status of the company:
 Negligible Debt; Major Project Costand Expansion Programs met out of Retained
Earnings
 Low borrowing Cost, InterestCost progressively becoming nil, Net Income
generated on the InterestFront
 Owns substantialProperties and Tangible Assets

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 Liquidity:
o Accumulated Cash Reserves and Surplus
o Surplus available for Expansion, R&D and M&A Activity
Alkem Labs is considering plans to launch an IPO to raisebetween Rs. 3000 crores to Rs. 4000
crores which if finalised could potentially be one of the biggestofferings in the pharma space
in a long time. The likely timeline for the IPO is around the second half of FY15 and a proposed
equity dilution of around 25% would valuethe company anywherebetween Rs. 12000-
Rs16000 crorerupees. Merchantbankers arelearnt to have been shortlisted by the company.
HR PRACTICES:
The following are someof the HR practices of the company welearned on the IndustrialTrip:
 Employees are hired on both permanent and temporary basis.
 Employees up to executive level are paid overtime and from executive level are given
paid leaves in return for overtime.
 Managers are mentors rather than justsupervisors.
 All new joiners undergo an induction programthat comprises of classroom, research,
production and sales insights combined with on-the-job training. This helps the new
recruits get acclimatized to the realities of the industry, company and business unit.
 As a partof the induction program, employees are made familiar with Alkem business
operations and culture.
 They are provided an insight into the company's values, vision, cultureand strategy
rounded off by training in social sensitivity, multiple functions and field sales. This
holistic induction enables employees to understand the realities of the corporate world
and learn things faster and derive the mostbenefit fromthe shortestpossibletime.
 Regular training hours areoffered and constantinvestments are made in the
employees’ development to keep them at the top of their abilities.
 Training programs aretailored according to individual needs and the courses people
take depend on their skills, experience and areas of interest.
 Applications are accepted online and through employee referrals.
 There are one year increments for workers on a grade basis

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MANUFACTURINGPROCESS:
Vials Process:
The process starts with the Vial Decartoning which is the first stage in the vial filling
process. The vial are removed from the cartons and transferred to the washing area
where the vials are cleaned to remove solid impurities which can affect the medicines
purity. After washing the vials the solid impurities are removed such as dust etc. and the
vials arereadyforsterilization processwhichwill removethe bacteria’sand the impurities
which a human eye cannot detect. After sterilization the filing process takes place. At
Alkem two types of products are filled in the vials.
 Powder Medicine
 Liquid Medicine
After the productis filled in the vialsthe vials arecapped with a rubbercap whichprotects
the medicine frombacteria’s and solid impurities. Last and final step is the sealing of vials
with an Aluminum cap which holds the cap tight and avoids the rubber cap from coming
out.
Tablet Manufacturing:
The manufacturing of tablets is a complex multi-stage process under which the starting
materials change their physicalcharacteristics a number of times beforethe final dosage
form is produced. Firstly the raw material is obtained from the ware house unit. They
calculate the exact amounts required for production of one batch of tablets and deliver
accordingly into the production unit by the pass box. Theraw material, before entering is
tested by Quality Control and checked if it is suitable for production.

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Production begins once the raw materials enter the production unit. The entire production
procedure can be divided into five stages. They are:
 Dispensing
 Granulation
 Compression
 Coating
 Inspection
 Packing
 Dispensing
Dispensing is the first step and the most critical in pharmaceutical manufacturing; as
during this step, the weight of each ingredient in the mixture is determined according to
dose. Dispensing may be purely manual by hand scooping from primary containers and
weighing each ingredient by hand on a weigh scale, manual weighing with material lifting
assistance like Vacuum transfer and Bag lifters, manual or assisted transfer with
automated weighing on weigh table, manualorassistedfilling of loss-inweightdispensing
system, automated dispensaries with mechanical devices such as vacuumloading system
and screw feed system. Issues like weighing accuracy, dust control (laminar air flow
booths, glove boxes), during manual handling, lot control of each ingredient, material
movement into and out of dispensary should be considered during dispensing.

10
 Granulation
Granulation is the process of formation of grains. In simple terms it is the process of
mixing of active ingredient with the excipients so that particles accumulate to reach a
stage where there is uniformity and no voids in the material. Granulation provides
homogeneity of drug distribution in blend which is the next step after particle size
reduction and blending. Drying is importantto keep the residual moisturelow enough to
preventproductworseningand ensurefreeflowing properties.The commonlyused dryer
includes Fluidized - bed dryer, Vacuum tray dryer, Microwavedryer, Spray dryer, Freeze
dryer, Turbo - tray dryer, Pan dryer, etc.
 Compression
The compressionisdoneon a compressionmachine.There aretwo types of compression,
Automatic and Semi-automatic. The automatic machine has 45 stations and is controlled
by PLC, whereas in the semi-automatic machine, there are 27 stations. Also the weight of
tablet (depth of fill) and the thickness are to be adjusted manually. The blend is added
into the hoppers. Itthen flows into the die bore. The amount of blend is adjusted by the
feed frame(bronzecolored) based on our weightsetting. The punches (upper and lower)
are fixed onto a turret. When the powder is pressed in between the two dies, it forms a
tablet.
After the preparation of granules (in case of wet granulation) or sized slugs (in caseof
dry granulation) or mixing of ingredients (in caseof direct compression), they are
compacted to get final product. The compression is done either by single punch
machine (stamping press) or by multi station machine (rotary press).
Each tablet is made by pressing thegranules inside a die, made up of hardened steel.
The die is a disc shapewith a hole cut through its centre. The powder is compressed in
the centre of the die by two hardened steel punches that fit into the top and bottom of
the die.
The punches and dies are fixed to a turret that spins round. As it spins, the punches are
driven together by two fixed cams - an upper cam and lower cam. The shapes of the two
cams determine the sequenceof movements of the two punches. This sequence is
repeated over and over becausethe turret is spinning round, this process is done to
prevent and protect errors in production.

11
Common stages occurring during compression
Stage 1: Top punch is withdrawn fromthe die by the upper cam
Bottom punch is low in the die so powder falls in through the hole and fills the die
Stage 2: Bottom punch moves up to adjustthe powder weight-it raises and expels some
powder
Stage 3: Top punch is driven into the die by upper cam
Bottom punch is raised by lower cam
Both punch heads pass between heavy rollers to compress thepowder
Stage 4: Top punch is withdraw by the upper cam
Lower punch is pushed up and expels the tablet
Tablet is removed fromthe die surfaceby surfaceplate
Stage 5: Return to stage 1
 Coating
Many tablets today are coated after being pressed. Although sugar-coating was popular
in the past, the process has many drawbacks. Modern tablet coatings are polymer and
polysaccharide based, with plasticizers and pigments included.

12
Coating is performed for the following reasons:
1. Controlling site of drug release
2. Providing controlled, continuous release or reduce frequency of drug dosing
3. Maintaining physical or chemical drug integrity
4. Enhancing product acceptance and appearance
 Inspection and Packing
In Inspection, the tablets are checked for any damages or deviations from the
productions. There is a conveyor belt on which tablets will be flowing. The people
inspecting would check for any darkspots,breakageetc. and would rejectthem. They are
also passed through metal detectors, which would check if any metals have entered the
tablets from the machine walls. Then the finished dosage is sent again for testing to the
Quality Control Unit. Finally the packing is done.
THE ALKEM SUPPLY CHAIN
Although very intricate and developed, the information on the supply chain of Alkem Labs was
intentionally not explored in detail by the guide. The following is the information provided by
the professionalguideduring the trip:
 Suppliers:
Alkem has very good relations with different suppliers and has good bargaining power
on the price at which they sourcetheir raw material. Most of the raw material is
sourced on credit and sincethe plant is located at a comparatively remote location, a
good amountof material is ordered in advance.
 Distribution and Logistics:
Since the inception of Alkem, it has put in a lot of effort and planning in building up a
robustdistribution network system. Today, they have one of the largest logistic network
distribution set up in India covering the entire length and breadth of the country.
Distribution Channel starts from manufacturing units. In this the products are
manufactured in factories and various plants across India and packaging is done in the
plant itself. Various lots of packed material are then sentto the central warehousewhere
the further distribution is carried forward. Here there is a carrying and forwarding agent
which takes the material from warehouse to various stock agents. Their work is to give

13
clearances and send to the concerned agents. Consignee agent takes order for
consignments and delivers it to the stockist. There are around 5500 stockists for Alkem
which cater to over more than 1.6 lakh retail outlets. These outlets then help in further
distribution of Alkem products to consumers and customers. They cover almost 250,000
retail pharmacies in India.
PROMOTIONAL STRATEGIES:
Alkem Laboratories Ltd is mainly a generic drug maker. Now, the scopeof promotion and
advertising is limited for such a firm, who is producing medicines whosesubstitutes are
available in the market. The main focus of Alkem is costreduction to be competitive in the
market, a strategy it has successfully followed through theyears by following highly efficient
production techniques.
So, even though the Television and radio promotions of Alkem are practically nonexistent,
there are various other ways through which Alkempromotes its products.
 Relations– The founder of Alkem Shri Samprada Singh has always been a highly
respected figurein the Indian pharmaceutical industry. Themain values that he
instilled in the firmwere of building long term relations through commitment and
values. Alkem makes it a point in maintaining long lasting relationships with all those

14
that are associated with the firm. That includes its distributors, suppliers, hospitals and
doctors. Alkemhas made it a point to have solid relations with hospitals and doctors
across the nation who then prescribes their medicines to the patients. Doctors majorly
influence the buying decision of medicines. This way Alkem not only secures a regular
demand for its products but also builds a solid name for its product which is crucial in
the long run.
 Articlesand interviews – The top executives and health experts associated with Alkem
regularly write articles in health magazines and dailies relating to latest health and
pharma-industry trends. They also give interviews in various business news channels
thereby strengthening the company name and brand.
 Onlinepromotions– Various websites like medindia.net, poulvet.cometc., shows the
list of Alkem products that the general public can refer to while purchasing the
products.
 Website – Through its own user friendly website, Alkem promotes its products and
services by providing detailed information.
 Charts– Alkem provides charts of its medicines, products and diseaseinformation to
various chemists and doctors.
 Agreements- Alkem Laboratories enters into various sorts of licensing arrangements
and agreements in order to explore marketopportunities and draw maximum value
out of it. For instance, Alkem Laboratories entered into a licensing agreement with
Cooper Surgicals a business unit of The Cooper Companies, Inc. for the Medscanc
cytobrushes for women's healthcaremarkets.
 Marketing Alliances- Alkemencourages marketing partnerships and product
acquisition and hence they enter into different marketing alliances to enhance their
presence
Some of these are:
 Karo Bio - Sweden
 Gnosis - Switzerland
 Oculus - The Netherlands
 Reyon - South Korea
 Cargen - South Korea
 Hor Phag - Switzerland

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OBSERVATIONSANDLEARNINGOUTCOMES:
When we visited the manufacturing unit, we made the following observations:
 In the vial filling process no. of defective pieces is only 1 in 15 minutes.
 Outsourcing of material takes around 30 days.
 In a shift of 8 hours there are 65000 – 70000 pieces of production.
 Auditing is done by government and WHO.
 Checking of material is done3-4times beforefinal sending– 2 times manually and 2 times
by machines.
 This Alkem plant has revenue of 3000 crores from which 2500 crores are from domestic
market and 500 crores from imports.
 There is a different dress code for different teams like blue for manufacturing team,
yellow for quality assurance teams and white for visitors.
The main observation was focused on the adherence to Alkem’s quality standards which is the
responsibility of its dedicated Corporate Quality Assurance (CQA) team. The team(s) charter
includes enforcing a standardized common quality system across the organization to ensure
consistency, effectiveness and efficiency during the manufacture of its products.
CQA focuses on:
 Establishing quality standards
 Ensuring Quality by Design
 Developing processes to achieve those standards
 Monitoring to ensure compliance (internal audits)
 Upgrading technology standards
 Training personnel on quality aspects
 Packaging control
While observing the manufacturing process, wewerealso shown someof thekey management
measures that Alkem maintains at all its locations such as:
 Providing a positive working environment for employees.
 Protecting the consumer’s interest at every step of the process by maintaining quality.
 Clean and lean manufacturing processes adopted.
 Promoting a growth culture in the organization by a good policy framework.
 Enhancing growth and profitability of the organization by adopting new methods and
technology.

16
Visits to manufacturing firms are useful for us to understand the nuances and realities of the
shop floor, which in itself is a rareexposure. By visiting the shop floor wegot to understand the
risky conditions in which workers work, the people management challenges involved in
managing workersapartfromgetting hands-ontechnicalknowledge.Such an experiencehelped
students who visited Alkem to figure out management from core from time to people, from
environment to social and hence growth holistically.
Though an industrial visit is an integral part of learning to most of the graduate students, on a
postgraduatelevel it is very essentialfor us to learn how we need to act as a manager when we
are employed in the industry. An industrial visit provides us with a tool which will eventually
help us realize challenges and opportunities in several sectors of management such as Human
resources, finance, marketing, operation etc.
SIKKIM-ALANDOF OPPORTUNITY:
In India, units setting up shop in the north-eastand in specified backward states do not
have to pay any direct taxes for the firstfive years. They also enjoy a 25 percent deduction on
direct taxes from the fifth to the 10th year of operation, according to governmentinformation.
The deduction allowed is 25 percent of profits for 10 years. For units located in the
north-eastern region and in specified backward states, the deduction allowed is 100 percent
for first fiveyears and 25 percent for the next five years.
The objectives of these exemptions can be explained as:
1. Generation of additional economic activity;
2. Promotion of exports of goods and services;
3. Promotion of investment fromdomestic and foreign sources;
4. Creation of employment opportunities;
5. Development of infrastructurefacilities.
Sikkim which is the least populous state in the country has attracted pharma investment
upwards of many crores. There is minimal interference by the state government. Also there is
low costin labour, power and overall costof manufacturing. The main attractiveness lies in the
multitude of tax benefits it offers. The inclusion of Sikkim under the Centre's 'North East
Industrialand InvestmentPromotion Policy, 2007'in April 2007 did the trick. As part of this, all
new units as well as existing units which go in for substantialexpansion in Sikkim will be eligible

17
for incentives for a period of ten years from the date of commencement of commercial
production. There's 100% excise duty exemption on finished products manufactured there,
100% exemption on income tax, capital investment subsidy of 30% on the investment in plant
and machinery, interest subsidy at 3% on working capital loan and even reimbursement of
100% insurance premium. On the top of it all, Sikkim also offers attractive freight subsidy. So
this Tax Holiday Zone provides a lot of incentives and profit to Alkem Laboratories.
CONCLUSION
Industry visits sensitize students to the practical challenges that organizations face in the
businessworld.Industrialvisitsalsogive greater clarity aboutvariousmanagement conceptsfor
students as they can practically see how these concepts are put into action.
We are grateful to the college for providing us with the opportunity to experience the working
of a manufacturing industry and we would like to affirm that we have had a good learning
experience about the challenges and opportunities in several sectors of management such as
Human resources, finance, marketing, operation etc.
REFERENCES
 https://www.mckinsey.com/~/media/mckinsey/dotcom/client_service/Pharma%20and%20Medical%20Product
s/PMP%20NEW/PDFs/778886_India_Pharma_2020_Propelling_Access_and_Acceptance_Realising_True_Potent
ial.ashx
 http://www.alkemlabs.com/about-us
 http://en.wikipedia.org/wiki/Mixing_(process_engineering)#Solid-solid_mixing
 http://starpharm.listedcompany.com/processes.html

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