Master of Business Administration Executive
Faculty / School
School of Business Studies (SBS)
Year of Award
Dr. Rameez Khalid, Associate Professor, Department of Management
MBA Executive Research Project
Diabetes is considered to be one of the most dangerous diseases in human history with more than 415 million patients in 2015 which is expected to reach 642 million by 2040. To cater for this disease, Metformin HCL an Active Pharma Ingredient (API) is used sometimes as a standalone product and sometimes in combination with other API’s. From a global supply chain perspective, Metformin HCL is 248 million USD market globally in 2019 and expected to grow 331 million USD by 2027. In Pakistan there are more than 19 million patients with average increase rate of over 10%. This statistic makes Pakistan at 4th rank in terms of patients and yet not a single manufacturing facility is there to cover this disease. Companies in Pakistan import this product from international market mainly from India and China because there is no manufacturing facility in Pakistan. In the study time frame, 3.1 Mn KG product of worth 4.6 billion PKR is imported in 3 years and 7 months study time frame. To cater this domestic need, Metformin HCL local manufacturing facility is proposed with 1000 KG output batch size production and 600 tons per annum capacity if operated at 100% capacity. To execute this project 742 Mn PKR will be required to build this facility in 3 years 4 months’ time frame in Faisalabad Sahiyawala Industrial which is the most suitable location in terms of land cost and market reach. Facility financial structure is tested in worst case scenarios where interest rate for 1st 2 years is taken 20% and onwards 17%. Still project is found suitable where payback is achieved within 7 years of gradual operation increase theme, net present value of 36.2 million PKR and IRR of 8.70%. Plant financing is done using 50% debt and 50% equity model where owner can recover his equity from 3rd year. For product selling, 1200 PKR/KG cost is determined for local market because it is an import substitution project where end user don’t need to arrange US dollar for procurement and can reduce their holding inventory cost if long term contract is made with the manufacturing facility. Drug Regulatory Authority of Pakistan (DRAP) do facilitate API plant manufacturing and offer incentives to investor in the form of less approval time in comparison to pharmaceutical facility. To sell Metformin HCL, we need to have stability studies of the product, Drug Manufacturing License and Drug Master file along with Certificate of Analysis to perform commercial deal in domestic market. But if we want to sell this product at international xi market then we need to have bioequivalence studies of the product, hiring of local consultant where we want to sell our product, local government authority approval and international certification of our plant.
He is currently managing his own business with the name IKA Enterprises as Site Manager in Lahore. Previously Abdur Rehman has worked in companies like Engro Eximp Agriproducts, Midas Safety and CCL Pharmaceuticals where his last assignment was in CCL pharmaceuticals as Manager Engineering. Abdur Rehman has a total of 10 years of professional experience and has completed BSc in Mechanical Engineering in 2013. His interests are in business development. [firstname.lastname@example.org]
Rehman, A. (2023). Feasibility study of Metformin HCL (Active Pharma Ingrediant) local manufacturing plant in Pakistan (Unpublished graduate research project). Institute of Business Administration, Pakistan. Retrieved from https://ir.iba.edu.pk/research-projects-emba/598
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