Paul Thomen

Thursday, 31 January 2013

2013 Ukraine and South Korea Power Report Q1 at RnR Market Research

Ukraine’s dependence on Russia for gas is a problem, as it exposes the country to import volatility and ongoing price disputes, which have been exacerbated by the government’s power price subsidies. Domestic sources cannot fuel all gas-fired generation, so Ukraine wishes to boost its nuclear and renewables capacity. Investment is unlikely to reach the required level, while sales prices for power are low, although the International Monetary FundIMF is forcing through tariff increases. Key trends and developments in the Ukrainian electricity market:

Ukraine’s power generation in 2012 iwas estimated by BMI to have been 180.63 terawatt hours (TWh). During the period 2013-2021, Ukraine’s overall power generation is expected to increase by an annual average of 1.47%, reaching 205.92TWh. Driving this growth will be an annual average gain of 2.61% in gas-fired generation. Non-hydro renewables will also play a bigger role in the country’s energy mix, growing by an annual average of 15.12% between 2013 and 2021.

BMI View Concerns surrounding the safety of nuclear power plants have been reignited as a result of uncertified parts found used in some of South Korea’s nuclear reactors. While we believe that the country is unlikely to shut more plants down, despite fervent protests, we believe that the government is likely to implement significant measures in the hope of regaining the public’s trust. Other plans include hastening the implementation of a smart grid that will also help the strained power suppliers meet the country’s growing consumption.

We forecast overall power generation in South Korea to grow an average of 3.59% per annum from 2012 to 2021, to reach 669 terawatt hours (TWh). While coal- and gas-fired generation continue to be vital, we expect most of this growth to come from nuclear generation. That said, we expect the country to continue adding thermal capacity to avoid further supply shortfalls, which it experienced in September 2011. Moreover, the increased cautiousness at which the government provides approvals for the construction of nuclear generators could, in turn, result in greater thermal generation growth, particularly gas-fired plants.

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Tuesday, 29 January 2013

Global Market in Indian Pharmaceutical Industry 2013 in Coming of Age

The 20 companies examined in this report had combined sales of more than US$17.4 billion in their most recently reported fiscal year, which generally concluded on 31st March 2012. Ranbaxy reported revenue of Rs.99,769 million (US$2,145 million) for the calendar year ended 31st December 2011, making it the leading company in terms of revenue. Of the companies listed, 18 reported improved sales over 2010/11.

New Guidance on Biosimilar Manufacture

In 2012, new “Guidelines on Similar Biologics” were published. The Guidelines were prepared by the Central Drugs Standard Control Organisation and the Department of Biotechnology, and lay down the regulatory pathway for a biologic claiming to be similar to an already authorised reference biologic. The Guidelines apply to both locally-developed and imported products, although the precise approval process differs in each case. The document notes that a reduction in testing and data requirements at the preclinical and clinical level is likely to be possible for a biosimilar, however, ‘it is essential that the testing of the similar biologic be sufficient to ensure that the product meets acceptable levels of safety, efficacy and quality to ensure public health’.
A number of Indian companies are active in the biologics segment of the pharmaceutical market. Leading indigenous biotechnology companies include Biocon and Panacea Biotech, which ranked first and third in terms of revenue in the BioSpectrum-ABLE Biotech Industry Survey 2010. The Serum Institute of India was in second place. Unsurprisingly, the Indian biotech industry has its sights set on the regulated biosimilars markets of the EU and US. However, no Indian company has yet achieved a biosimilar approval in the EU and the US market remains in its infancy. A more realistic target for most companies, at least for the time being, is the domestic and emerging markets for biosimilars.

Where have all the outbound mergers gone?

Many Indian companies have pursued an aggressive acquisition policy in order to accelerate market growth or acquire manufacturing capacity. Prior to the economic downturn in 2008, this policy could be clearly seen with 10 acquisition/controlling stake deals announced in the year. Pressure on prices and variable performance have firmly put a lid on this activity, Sun Pharma’s eventual control of Taro being one of the few deals to go through since. Inward investment has equally been affected as interest in Indian companies has cooled. Matrix – one of the more acquisitive companies – was purchased in 2007 by Mylan. Now rebranded Mylan Laboratories, one of the better known names in India pharma has now gone.

Focus on…current and future markets

India’s domestic market: not achieving necessary growth

With a population of over one billion and a growing middle class in excess of 300 million people with disposable income and increasing healthcare expectations, the domestic formulations market has enormous potential for growth. But India is a country of wide economic divide and while a growing number of people can afford to pay for good quality private healthcare, for the bulk of its vast rural population all but basic healthcare provision will remain out of reach for the foreseeable future. However, domestic pharmaceutical companies are reporting increased penetration in smaller towns and rural areas. Rising household income and improvements in health infrastructure and delivery systems will continue to support long-term growth in the pharmaceutical market. Nevertheless, India’s domestic market will not grow at the required rate to sustain the industry’s revenue needs and production capacity and so Indian pharma companies will remain export focused in the medium term.

International Developments

US Market: the prize market for Indian companies
The USA remains the largest generic market and the most sought after target for Indian companies involved in the generic business, and market growth has been sustained in recent years by a large number of patent expirations. As the Indian majors have gained experience in the US, they have been able to exploit opportunities provided by Paragraph IV filings and specialty generics with fewer competitors. Over the last decade the number of ANDAs approved increased dramatically. During the three year period between January 2002 and December 2004, the FDA approved 72 ANDAs for Indian pharmaceutical companies and their US subsidiaries and the numbers have increased year-on-year, to peak at 132 in 2008. Since then, the number of annual approvals has dropped slightly, to 119 in 2011 and 127 in 2012.

UK: One of Europe’s strongest generics markets

Over 80% of prescriptions in the mature UK market are fulfilled generically. The UK has always been a focus for Indian companies with nine companies running 11 manufacturing sites. Between January 2009 and January 2010, Indian companies had more than 260 marketing authorisations approved by the UK’s Medicines and Healthcare Regulatory Agency (MHRA) for a wide range of products. During this period, Ranbaxy received 55 approvals; Dr Reddy’s received 54; Aurobindo received 39; and Lupin received 25.

Europe: wider generic adoption is good news for Indian companies

The UK and Germany have been promoting generic use as a way of containing healthcare costs for years and a number of Indian companies are active in these markets. Others, such as France, Italy and Spain, have more recently begun to explore the use of generics to curtail burgeoning drug bills. Government initiatives have been introduced to increase the use of generics and reduce prices as part of wider austerity measures. These generic markets are still relatively small but growing and there are a number of Indian companies currently monitoring them.

When will they act and will prevaricating harm their long-term potential?

Russia: an import dependent market which is to the advantage of Indian companies

Russia is an important market for India’s pharmaceutical industry. In 2012, the Russian pharmaceutical market was estimated at US$26,551 million at retail prices. The market is characterised by strong import growth which rose by a CAGR of 18.7% in US dollar terms over the 2007-11 period. The heavy reliance on imports has been to Indian companies’ benefit and India’s pharmaceutical exports to Russia amounted to US$534 million in 2011, of which US$517 million were retail formulations – this makes Russia India’s second most important export market after the USA. Among the leaders in this trade were Dr Reddy’s in gastrointestinal, cardiovascular and anti-infective drugs, while the leading areas for the company with biosimilars are immunology and oncology. Glenmark Russia is among the top 20 pharmaceutical companies in the dermatology segment and one of the fastest growing pharmaceutical
companies in Russia.

South Africa

The generics market in South Africa has grown markedly in recent years as the government has continued to promote the low-cost sector as a means of improving access to medicines for the country’s vast poor population. India’s exports to South Africa amounted to US$310 million in 2011, of which US$267 million were retail formulations. To illustrate Indian company success, Lupin stated in its 2012 annual report that it was one of the fastest growing of the top ten companies in South Africa, recording growth of 40% in revenues to Rs.2,554 million (US$55 million) from its subsidiary, Pharma Dynamics. The company ranked fifth among generic pharmaceutical companies in South Africa.

India as a research base: balancing need and research investment

India’s acknowledged strengths make it an ideal regional base, particularly for R&D and for commercialisation in select markets in which India already has a significant presence. With its vast population, comparatively low cost, fast turnaround and expertise in statistical analysis, India is also an attractive base for Phase III clinical trials.

Several multinationals are already using or plan to use India as a base for clinical research, particularly for specific diseases with a significant local patient base, such as tuberculosis. Companies such as GSK and Eli Lilly have been collaborating with domestic companies for R&D, while others have been utilising Indian contract research organisations. In the future, it is likely that an increasing number of companies will set up research centres in India and use the country as a hub for multi-centric global trials. Others will take advantage of the services offered by India’s emerging CROs.

The Foreign Direct Investment (FDI) policy, introduced in 2001, allows 100% FDI in the pharmaceutical industry. By 2011, however, the move aimed at encouraging foreign investment had become a cause for concern and the FDI policy was placed under review.

The Ministry of Health fears that continued takeover of Indian pharmaceutical companies by multinationals will adversely affect the domestic industry and push prices up, leading to essential medicines becoming more expensive. This could impact public health programmes, including the Universal Immunisation Programme.
According to a September 2011 report in the online version of The Hindu, the Ministry has recommended that prior approval of the Foreign Investment Promotion Board be made mandatory and that steps should be taken to channel foreign investment into green-field projects. The report states that, since 2001 when 100% FDI was first allowed in the pharmaceutical sector, just 10% has gone to green-field projects. At the government’s request, Ernst & Young is conducting a study on the impact of the recent takeover of Indian pharmaceutical companies, and its report is deemed likely to be placed before the Economic Advisory Council to the Prime Minister.

Surveillance and Security Equipment: Technologies and Global Markets


Study Goals And Objectives

This BCC Research report analyzes the burgeoning market for new technologies that are used in surveillance and security. In this report, surveillance is broadly construed and includes any type of “sensing,” and often recording, of people or property. The report is broken down by major individual country markets such as those in Western  Europe, North America and Asia/Pacific.

In most current applications, surveillance equipment is deployed for security purposes, that is, for the protection of people and property. The predominance of the security application is due to the fact that theft and fraud at American stores alone results in losses of approximately $45 billion per year. Based on one large survey covering nearly $3-million retail sector employees, in 2011 one in every 36 employees was apprehended for theft from his or her employer. But not all surveillance involves the security of people and property. Some of the surveillance techniques and equipment discussed in this report have been deployed for damage detection and structural health monitoring systems in aerospace, automotive, naval, civil or other applications.

What is measured in the report is the total demand for the surveillance equipment, by category of equipment. For example, the demand for video recording equipment, regardless of whether the monitoring is for people or things, is measured. Regarding equipment types, as long as the application is for surveillance, it is included in this report. Not covered, however, are non-surveillance applications of equipment. In the case of video recording, non-surveillance applications include ordinary consumer entertainment applications. Surveillance drones are not covered because the market is still in the nascent stage. However, drone surveillance is well worth keeping in mind as the Federal Aviation Administration expects that as many as 30,000 drones will be operating in U.S. airspace by 2020.

Examples of types of systems for which we measure market sales are video camera systems and security cameras, image surveillance and retrieval systems, video storage systems, VoIP surveillance and interception in law enforcement, electronic article surveillance (often carried out via anti-theft tags and RFID), automated remote home monitoring (via Internet), satellite GPS surveillance, traffic surveillance systems, and specialized surveillance sensors and detection devices, many of which are deployed to monitor property or equipment.

Reasons For Doing This Study And Its Importance

The advent of more sophisticated imaging devices, lower-cost video and enhancements in storage have been principal drivers of the overall surveillance market. For example, the video segment of the surveillance market alone has been growing by 10% or more per year.  Specialized segments to store video or any other surveillance data, such as data storage systems and network or cloud storage, have  been growing even faster.

In terms of market size, the total surveillance market has reached tens of billions of dollars in annual revenues. Revenue from sales of surveillance cameras, DVR/NVR, and IP encoders alone is now approximately $20 billion per year. In addition to the factors cited above, the market has been driven by cameras of higher quality and resolution with the ability to store data for longer periods of time. An additional market driver is the fact that surveillance video has become more valuable to the organization that deploys the technology beyond the traditional security uses because video can be used in liability mitigation, operations and marketing.

There is a broad range of companies operating in the surveillance business, and the report profiles 175 major entities. Some of these companies are in the developmental stage as they have pioneered key patented technology, for example in the area of data storage and data compression. Example companies include Samsung, SRI International, Nice Systems, Inc., Axis Communications, Mobotix and ADT Security

Contributions Of This Study And Intended Audience

With its broad scope and in-depth analyses by country, this study will prove to be a valuable resource, particularly for anyone involved with or interested in the future of surveillance and security markets. This study will be particularly useful for exporters, market strategists, researchers and any business professional involved with the development of the various security and surveillance markets. It will also be of value to potential investors and members of the general public interested in acquiring a business-oriented view of a key and very large sector of the economy. The projections, forecasts and trend analyses found in this report provide readers with the data and information necessary for decision-making.

Scope And Format Of Report

In preparing this report, an all-encompassing study of the surveillance equipment market was undertaken. Related areas such as the application of nanotechnology to sensors and the development of very large-scale storage databases were key to the analysis as well. These newer areas within the market—always a traditional focus of all BCC Research reports—foreshadow likely product developments in the years ahead. All major aspects of the surveillance market are addressed including identification of current and future technologies, products, market segments/end markets, and government and regulatory agencies. Participating companies are discussed in light of technological strengths and weaknesses, relative market share, marketing strengths and innovative marketing practices.

Methodology And Information Sources

Data for this study were collected using both primary and secondary data research techniques. A literature search was conducted covering business, trade and technical  documents as well as patents. Since many segments of the surveillance equipment market are not routinely measured, BCC derived estimates from a variety of sources.

Whenever market estimates are derived, those estimates are fully noted. All forecasts are in current (nominal) dollars, unadjusted for inflation.

Analyst Credentials

Research analyst Kevin Gainer holds both B.A. and M.A. degrees in quantitative economic analysis and forecasting and has 26 years of economic forecasting, industry intelligence and market research experience. He is the author of six published books and more than 100 magazine articles, technical papers, analyses and studies published in conference proceedings, including many prepared for intracompany use and therefore unpublished. He has worked as a Research Editor and Project Analyst at BCC Research since 1985, and has authored numerous BCC technology market research reports.

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The information developed in this report is intended to be as reliable as possible at the time of publication and of a professional nature. This information does not constitute managerial, legal or accounting advice, nor should it serve as a corporate policy guide, laboratory manual or an endorsement of any product, as much of the information is of a speculative in nature. The author assumes no responsibility for any loss or damage that might result from reliance on the reported information or from its use.