SWOT ANALYSIS OF OPSONIN PHARMA LIMITED

Business Overview of Opsonin Pharma Limited

Opsonin Pharma Ltd. Is one of the leading pharmaceuticals companies in Bangladesh, operating in the country since 1956. Initially, began its journey as a partnership business with the title ‘Opsonin Chemical Industries’, but later in 1976 it was enlisted as a private limited company and changed its name to Opsonin Pharma Ltd. in 2005. It was founded by the late Abdul Khaleq Khan and subsequently, the legacy is being carried forward by his three sons Abdus Sabur Khan (Chairman), Abdur Rouf Khan (Managing Director), Abdur Rakib Khan (Deputy Managing Director). The company is headquartered in Ramna, Dhaka, and the enormous manufacturing estate is situated in Ruptoli, Barishal. [1]

The company is now manufacturing 281 brands consist of more than 750+ pharmaceutical finished products including life-saving drugs. ‘Opsonin Pharma’ is the mother company of Opsonin Group that includes its six sister companies Opso Saline Limited, Global Capsule Limited, Global Heavy Chemicals Limited, Opsonin Bulk Drug Limited, Joky Garments Limited, and Devoy Distribution Limited. In the upcoming future, the pharmaceuticals company wants to expand its horizon by introducing Insulin, Biotech, Vaccines, Anti-cancer, and Hormone to its portfolio. The company has been using cutting-edge modern manufacturing facilities and a workforce of more than 10,000 experienced personnel to timely deliver quality drugs to people at an affordable price.  [1]

Opsonin Pharma had a 5.3 percent share in the 245b BDT sized local retail market [2], securing the 5th position out of 200-plus drug makers. [3] Over the years, the company has achieved many of its milestones with the motto ‘’Ideas for Healthcare’’ and created a strong global presence by exporting top-tier quality drugs. Currently, it is serving 25 different countries around the globe.  The company follows all the regulatory issues very diligently and focuses on ETP to produce environmental-friendly materials for a better world. It visions to be among the top-ranking pharmaceutical companies of the world by solving pharmaceutical needs with its finest quality and innovative products.

SWOT ANALYSIS OF OPSONIN PHARMA LIMITED

The SWOT analysis below will give a clear visualization of Opsonin Pharmaceutical Limited’s business situation to the readers. The analysis is a result of thorough research on the company’s profile and its activities historically and in recent times. Apart from the company structure and health, it also gives insights about the current trends, challenges, and prospects of the industry both in the Bangladeshi and global markets. This analysis can be used to understand this business entity’s key success factors, imperfections, and the industry’s growth drivers.

Strengths of Opsonin Pharma Ltd

1. Heritage and Reputation of The Company: Goodwill is a very significant intangible asset to leverage for a company, especially in the pharmaceuticals sector. From very the outset, Opsonin pharma has been consistent in innovating and producing top-tier quality products for both local and global markets. This reputation has made the company reliable in the market.[4]

2. Global Presence: The company has export operations in around 25 different countries around the globe. This diversification mitigates the risk of local market challenges. Besides, the long-term practice of exporting in global markets has created a powerful brand image for its products and opened more avenues to ascertain in the future. [5]

3. Use of Cutting-edge Technology in Manufacturing:  The huge manufacturing facility of Opsonin Pharma is well equipped with the latest technology to avoid any kind of contamination in its products and increase operational efficiency. The use of these machines also ensures the compliance of guidelines of local and global quality control authorities like EU, US FDA, MHRA, and TGA. [6]

4.  Diversified Product Portfolio and Businesses: The company has a highly diversified products portfolio now manufacturing 281 brands with 750+ Pharmaceutical products. Moreover, it has 6 more sister concerns under the group that are specialized in different industrial sectors. [7] This definitely distributes the long-term risks and helps the company to grow in different areas to ensure the proper utilization of its financial capability and sustainability.

Weaknesses of Opsonin Pharma Ltd

1. Constraints of Being a Private Limited Company: Since the company is yet to issue an IPO and enlist it as a public limited company, it has lesser financial backup as a global company. this financial constraint may create barriers to some future expansion or tackle any sudden financial crisis or disruption. Besides, it’s extremely challenging to compete with the local pharmaceuticals giants who are benefitting as public limited companies.

2. Focusing on Generic Products: Opsonin has a large portfolio of more than 300 generics product portfolios which shows a lack of innovation from the R&D of the company. [8] Although the pharmaceuticals sector of the country boomed due to its strong presence in the generic drugs market, the lack of patented products can be extremely detrimental for the company to grow in the distant future.

3. Dependency on Fossil Fuels for Power Supply: Companies are now using green energy to control climate change and comply with the guidelines of global authorities. But in the case of Opsonin Pharma, it is still dependent on traditional fossil fuels for its production power supply and is yet to take any step for using green energy.

4.  Dependency on Import of API & Machineries: Opsonin Pharma depends on foreign countries to import their raw materials and machinery for the facilities. This increases regulatory complexity and any sudden impose of rules or tax could create disruption in its operations.

Opportunities for Opsonin Pharma Ltd

1. The Rise of Local and Global Demand: It is expected that the local market size will surpass $6B by 2025 with an absolute growth of 114% and the global market size was valued at $405.52B in 2020 and is expected to grow CAGR of 11.34% from 2021 to 2028. The post-pandemic health awareness of people and increment of GDP are going to offer a lot to the pharmaceutical companies. [9]

2.Government Support: To support the local of production medicine, the government of Bangladesh has reduced tax on import of API (active pharmaceutical ingredients) till 2032. [10] As Opsonin has to depend on the Import of raw materials, this exemption can be used to increase production and reduce the price of its products to capture more market share locally and globally.

3. FDI Opportunities: The cheap labor cost andpolicy support attract a huge number of foreign investors to the pharmaceuticals sector in Bangladesh. [11] Especially, after the covid-19 outbreak in China, investors are now moving to other Asian countries.Opsonin Pharma can utilize this opportunity for the future expansion of its business.

4. More to Explore in The Generic Market: It is expected that by 2024 nearly USD 251 billion patented drugs will be going off patent. [12] If the extension of LDC graduation is granted, Opsonin can grab this opportunity to increase production and penetrate more in the local and global markets with its affordable products. [13]

Threats of Opsonin Pharma Ltd

1. Strong Competitors: When 97% of the local market demand is met by the local pharmaceuticals’ companies, Opsonin has only grabbed 5.7% of the market share after all these years which is far behind the top competitors. [14] These strong competitors of the local market, as well as the global ones in the international market, are prevailing over Opsonin which is highly alarming to survive in the market.

2. Difficulty to Cope-up With This Dynamic Industry: Innovation and use of modern technology is an unavoidable success factor for companies in the pharmaceutical industry. But the lack of skilled manpower, research facilities, and technological advancement in Bangladesh are the biggest challenges for the local companies to cope up with this dynamic global market. [15]

3. LDC Graduation of Bangladesh: The LDC graduation of Bangladesh is set in 2024 which will bring drastic changes in the regulatory issues for exporting pharmaceutical goods in the global market and incur taxes and other restrictions.[16] As most companies, including Opsonin, are highly dependent on generic drug production, it’ll be very challenging to deal with that new situation.

4. Rise of Frauds: In the local market, there are numerous frauds who manufacture fake medicine from cheap and harmful ingredients and supply in the market using the same name as branded products. Due to the callousness of law enforcers and regulatory authorities, the practice of this crime is increasing which is threatening for the companies like Opsonin as it may create trust issues among the consumers on them.

Recommendations for Opsonin Pharma

To overcome the future challenges and mitigate the weaknesses of opsonin Pharma, it should focus more on innovation and also expand its operation to more sectors related to pharmaceuticals. As there are financial constraints of being a private limited company, it can raise funds from FDI and expand further into new areas of business as well as use green energy as power supply. The proper utilization of its huge manufacturing estate in Barishal is needed while the local and foreign authorities are supportive toward pharma companies. Thus, the unseen risks of the distant future can be avoided and the sustainability of the business can be assured.

References

• Opsonin Overview; The official website of Opsonin Pharma Ltd;
• http://www.opsonin-pharma.com/about-opsonin.php
• Pharma industry growth halves in 2020; The Financial Express;
• https://thefinancialexpress.com.bd/trade/pharma-industry-growth-halves-in-2020-1610159516
• Pharma next export market player; The Financial Express;
• https://www.thefinancialexpress.com.bd/views/columns/pharma-next-export-market-player-1624461665
• Opsonin Overview- The official website of Opsonin Pharma Ltd;
• http://www.opsonin-pharma.com/about-opsonin.php
• Bangladesh pharmaceutical industry blooms bigger- Dhaka Tribune
• https://www.dhakatribune.com/business/2019/08/22/bangladesh-pharmaceutical-industry-blooms-bigger
• An emerging global player of the pharmaceutical industries: Challenges and prospects for Bangladesh- The Business Standard;
• https://www.tbsnews.net/thoughts/emerging-global-player-pharmaceutical-industries-challenges-and-prospects-bangladesh-197476
• Pharmaceutical Industry of Bangladesh: Prospects and Challenges- BIDS
• https://bids.org.bd/uploads/events/ALMANAC2019/S3_P3.pdf
• Competitiveness and Global Prospects of Pharmaceutical Industry of Bangladesh: An Overview- ICMAB;
• https://www.icmab.org.bd/wp-content/uploads/2019/12/2.Competitiveness.pdf
• Pharma raw material makers get tax exemption until 2032- The Daily Star
• https://www.thedailystar.net/business/economy/industries/tax-customes/news/pharma-raw-material-makers-get-tax-exemption-until-2032-2197101
• Bangladesh on track to becoming a $6b pharma market by 2025- The Daily Star
• https://www.thedailystar.net/business/news/bangladesh-track-becoming-6b-pharma-market-2025-199574