Govt. to establish industrial zone for pharmaceutical companies

Plans to encourage local industry to reduce State health bills, says 10 companies have already expressed interest

By Uditha Jayasinghe

Cabinet approval has been given to establish an industrial zone in Sri Lanka exclusively for investment from pharmaceutical companies so that the Government can save money by purchasing drugs locally, a Minister said yesterday.

Cabinet Spokesman and Media Minister Keheliya Rambukwella stated that the Cabinet had approved a plan by the Industry and Commerce Ministry to allocate 48 acres of land in Kurunegala for the project.

In 2010 the estimated size of the local pharmaceutical market was Rs. 40 billion, but local contribution was only about 10 per cent, leaving huge potential for investment, the Cabinet Spokesman said.

Government consumption alone was Rs. 15 billion, which is around 35 per cent of the local market. He added that the annual growth of the local pharmaceutical industry was expected to be around 15 per cent for the next four years.

“Already 10 companies have expressed interest in investing in this specialised industrial zone, provided that strong policy support is provided by the Government to promote local production,” the Minister said, adding that plans were also underway to establish a preferential system to procure drugs for the State Pharmaceutical Corporation that distributes drugs to the entire country.   

The Cabinet paper stated that the Industry and Commerce Ministry was regularly consulting with local producers and an advisory committee had been established to formalise consultative process. In response to industry requests, laboratory facilities have already been provided by the Colombo University.  

The dedicated industrial zone is another request from the industry, which now needs an Environment Impact Assessment (EIA) to ascertain the suitability of the venture. The Industrial Technology Institute has already been selected for this task without calling of tenders at a cost of Rs. 2.5 million.

“The commitment of the Government is needed to procure drugs for the local industry on the same basis as that applied to the State Pharmaceutical Corporation. If such arrangement is made, the industry is confident that the Government has the largest consumer pool to improve the efficiency of its supply chain as well as reduce cost of wastage. It would also promote the local pharmaceutical industry,” the Cabinet paper added.