- Manufacturers of Fine Chemistry and Active Pharmaceutical Ingredients (APIs) in Spain, have reported good growth results both in turnover and volume for last year according to data presented by AFAQUIM, its business association, during the General Assembly held in Barcelona.
- However, these positive results are affected by the high prices of raw materials, energy, and production costs that weigh on profit margins as in the chemical sector as a whole.
- The Spanish Fine Chemistry and API industry represented by AFAQUIM, is among the European leaders, works in the global market exporting 83.61% of its production and has proven essential during the COVID-19 pandemic, contributing strongly to the national health system, given that almost 80% of its products are destined for generic medicines.
AFAQUIM has presented its most recent data during its General Assembly held in Barcelona on December 16th. It should be noted that in the current context, the sector shows a strong growth last year with the excellent figure of 15.91% in 2020 during which annual turnover reached 2,437 million €. However, this extraordinary figure is due, in large part, to the high price of raw materials, logistics and energy, which directly results in the reduction of profit margins due to all the costs that companies are assuming on their operating accounts.
The sector composed of 32 companies in Spain has also increased its production levels with a growth of 50% in volume produced since 2017 that currently stands at 45,095.53 tons of product per year.
The Spanish manufacturers of Fine Chemistry products and APIs are experts in internationalization and currently export 83.61% of their production to more than 40 countries around the world, so they operate on a global scale and in conditions of extreme competition from a regulated market. The main recipient countries of these exports are in order of relevance: Germany, the United States, Japan, India and Switzerland, which gives us an idea of their international operational capacity.
It is also important to highlight the economic contribution that the sector makes to our society in payment of taxes etc. and, what is even more important, the creation of stable and quality employment, with 9,618 direct jobs and more than 23,000 induced and indirect jobs in our country.
“The industry of Fine Chemistry products, Active Pharmaceutical Ingredients (APIs) and their intermediates are the first and necessary link in the value chain of pharmaceutical products, being responsible for their therapeutic effect, that is, they produce the desired medicinal effect by which these drugs are administered, although their Active Principles are also used in another type of industries such as veterinary, or cosmetics. In 2021 AFAQUIM has laid the foundations to have a more relevant profile, a better image and publicize the fundamental work carried out by this sector for society as a whole, said Mila Jové, general director of AFAQUIM.
However, this important industry, although so far not very visible, faces strong pressures and threats to its competitiveness such as the dependence of third countries with more lax legislation, the increase in prices and shortages of certain raw materials, the increasing costs of energy, and to all this we must add the extra cost caused by the global logistics crisis in which commitments are systematically breached, acquired long ago by shipping companies and other companies in the transport sector.
AFAQUIM joins the European voices that demand that the EU must put an end to the relocation of essential European companies, such as those manufacturing medicines, including those of API manufacturers, with ambitious, open and coherent policies that support a competitive, robust and sustainable production of APIs in our continent. To return to manufacturing in Europe, direct funds are needed to assume the increase in cost that this entails, and also, other aids such as tax cuts, tariffs on foreign products, etc.
During 2020 and 2021 AFAQUIM has acted to solve raw materials supply problems for its members, has worked to unlock incidents that could endanger their productions such as customs withholdings, or border closures, and has participated very actively in the European Structured Dialogue organized by the European Commission within the framework of its Pharmaceutical Strategy, to convey the voice of those who produce the essential materials for medicines, together with other business associations such as Feique, Fedequim, EFCG or Medicines for Europe. The sector is a key player in building a resilient and sustainable healthcare industry.
Also this year, AFAQUIM has taken a very relevant step with the involvement of the sector in the PERTE of Vanguard Health, recently approved by the Council of Ministers, together with the other pharma sector associations: FARMAINDUSTRIA and AESEG. In 2021 AFAQUIM has joined the project Essential Medicines and Strategic Industrial Capacities for the value chain of the Innovative Pharmaceutical Industry in Spain (Medes), which is part of the Program to Promote Tractor Projects of Competitiveness and Industrial Sustainability of the Ministry of Industry, led by FARMAINDUSTRIA.
This collective proposal responds to the concern, of the entire pharmaceutical sector, including that of APIs, observed during the COVID19 pandemic, of the excessive European dependence of Asian countries in the production of active ingredients and essential medicines. This collaboration has highlighted the great synergies between the three associations, and has laid the foundations for more future collaborations.
Yesterday, Elections to the Board of Directors were also held. The members of the Board of Directors of AFAQUIM for the period 2021-2025 are: Mª Lluïsa Espinós (president), Jordi Valls (vice president), Xavier Camps (secretary), Mark Robbins (treasurer) and the following members: Joan Amor, Gisele Butelman, Mª Carmen Cruzado, Ana Pilar González, Óscar Núñez, and José Luis Rodríguez.
The General Assembly was attended by Joan Capdevila i Esteve, president of the Committee on Industry, Trade and Tourism of the Spanish Congress of Deputies, who offered a conference to attendees about the future state pact for industry and industrial political development in Spain.
Capdevila stressed during his speech that “the state pact for the industry aims to allow the impermeability of the industry in the face of change and that we will see incentives to tractor sectors. This pact has an ambitious approach.” Capdevila added that it is important that its stimuli, as well as the European Next Generation funds, move beyond political cycles and that “they reach the productive economy so that all sectors can rebuild themselves”. Regarding industrial policy in general, Capdevila has detailed that its main objectives must be: investment, innovation and training to achieve a new model of future reindustrialization.
The sector of manufacturers of Active Ingredients and pharmaceutical intermediates in Spain has a turnover that exceeds 2,400 million Euros and an exports of around 83%.
Despite global competition in prices, especially from Asian countries, the sector has responded with the highest quality and safety of its products, manufacturing under the strictest global standards such as GMP legislation, and maintains a constant line of growth of more than 15% per year. Spain is the second European country in importance in the production of pharmaceutical raw materials, well above its industrial position among all nations.
AFAQUIM represents 32 companies, some integrated in international groups and most of them independent manufacturers.