India-based SME pharma exporters can now benefit from using warehouses in African countries, which will help reduce logistics costs.

“The Pharma Export Promotion Council of India has set the ball rolling for starting a warehouse facility for its members in Lagos in Nigeria, which can help companies that currently export to the African countries,” reports Business Standard.

On its website, the Council has highlighted the benefits, such as advanced security provisions, power back-up facilities, internal logistics through approved agencies, apart from additional services like insurance and bank remittances. The Council also proposed to highly subsidise the rentals of the warehouses. The proposal is being organized with support of the Union Ministry of Commerce.

“This is indeed good news for pharma SME companies of Gujarat who export to various countries in the African continent,” said Chirag Doshi, chairman of the Gujarat State Board of the Indian Drug Manufacturers Association (IDMA).

African and Latin American countries account for about 60 percent of net SME pharma exports from the area of Gujarat.

“Nigeria is considered a pharmaceutical hub for neighbouring countries and hence having a warehouse in Nigeria, somewhere near Lagos can be hugely beneficial for companies exporting to nearby countries,” said V Shah of Saga Laboratories, which exports oral dosage forms to countries in Africa, Latin America and the Commonwealth of Independent States. Shah pointed out  that logistics costs can be cut significantly thanks to the local warehousing facility.

“Logistics costs account for nearly 35-40 percent of the total cost of producing any pharmaceutical product, say industry players,” reports The Business Standard.

According to the Council, it was looking to set up a warehouse in one of the African countries to help SME exporters and eventually, the Council selected Lagos as a suitable location for the proposed warehouse. And if the Lagos warehouse project was successful, there were plans to set up similar warehouses in other key markets like Latin American countries and other African countries.