REPORT ON

A STUDY ON STRATEGIC ALLIANCE AND

COLLABORATION IN PHARMACEUTICAL INDUSTRY IN
BANGLADESH
 REPORT ON

A STUDY ON STRATEGIC ALLIANCE AND

COLLABORATION IN PHARMACEUTICAL INDUSTRY IN
BANGLADESH

Prepared for

Dr A.K.M. Saiful Majid

Professor

Prepared by

Moinul Haque Mozumdar 79 (42D)

Rathindra Nath Das 57 (42D)
Russel Abdul Mazid 58 (42D)
M. Rizwan Saad 91 (42D)
Iftekhar Ali 30 (41E)
Shams Tania Afroza Islam 25 (41E)

Institute of Business Administration

University of Dhaka

January 13, 2010

January 13, 2010

Dr A.K.M. Saiful Majid

Professor

Institute of Business Administration

University of Dhaka

Dear Sir

Subject: Submission of Report

As per your instruction, we have prepared the report titled “A Study on Strategic Alliance and
Collaboration in Pharmaceutical Industry in Bangladesh” which was a partial requirement of
the course Business Strategy (W 650). We have tried to follow all of your guidelines to prepare
this research report.

Thank you very much for issuing us such a dynamic topic. This study gave us an excellent
opportunity to get a real life conception about the existing Strategic Alliance and Collaboration
in Pharmaceutical Industry of Bangladesh, its prospects and challenges. This experience will
help us in our upcoming professional managerial life with a rich conception in dealing with real
life scenarios.

Sincerely yours

Moinul Haque Mozumdar M. Rizwan Saad

Rathindra Nath Das Russel Abdul Mazid

Iftekhar Ali Shams Tania Afroza Islam

 Executive Summary

The report titled “A Study on Strategic Alliance and Collaboration in Pharmaceutical Industry in
Bangladesh” is an effort to probe into the existing conditions in the pharmaceutical sector in
Bangladesh related to the strategic alliance and collaboration reality and prospects. The
pharmaceutical industry in Bangladesh is one of the most growing industry and currently
showing a robust growth with the second largest industry in terms of annual growth. Today, the
size of the pharmaceutical industry is approximately BDT 300 Million and the export volume is
worth approximately US$ 28 million.

The maximum benefits that Bangladeshi firms are gaining through such alliances are through
Licensing and Contract Manufacturing. This alliance is occurring between foreign and local
companies and between local companies as well. The major advantages that a firm acquires
through such alliances is cost advantage, revenue and profit maximization, international
certification, utilization of excess capacity, access to patent rights etc. In addition, a few local
firms have also started to produce Active Pharmaceutical Ingredients (API), which has opened a
new dimension in this sector as currently most of these ingredients are being imported from
other countries.

The study also reveals that at present, such alliances are happening between large and medium
sized Bangladeshi firms with large or medium sized foreign firms. The small scale companies are
yet to reap the benefits of such alliances. The major problem areas that the entrepreneurs face
includes interrupted supply of utilities, government bureaucracy regarding licensing, weak
infrastructure. High cost of capital has also been identified as an area which is slowing the
growth of many small and medium sized firms.

However, despite the difficulties the pharmaceutical sector of the country has a huge potential
and with the level of commitment from the local entrepreneurs towards quality and eagerness
to expand the market beyond our borders, this sector has a very bright future.