12/14/2020 Piramal group: 2021 is all about vaccine transportation.

ransportation. Piramal, SCHOTT KAISHA are ready with sturdy vials - The Economic Times

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12/14/2020 Piramal group: 2021 is all about vaccine transportation. Piramal, SCHOTT KAISHA are ready with sturdy vials - The Economic Times

Concept: Priyanka Salve; Muhabit ul haq

Synopsis

Unlike the polio-immunisation programme where less than 1% of India’s population gets vaccinated
annually, Covid-19 vaccination drive will be truly universal. With the vaccine race intensifying, glass makers
in India need to be on their toes to meet a likely demand spike. Are they up to the challenge?

More than 1.5 million people have died and over 65

million have been infected with the novel coronavirus
so far. With exception of some 10 tiny island nations in BY

Priyanka
the Paci c Ocean, all other countries, big and small,
9 MINS R
across the globe are under the shadow of the Dec 7, 2020, 12

pandemic.

A tight race is on to develop the most e ective vaccine Share This

to rein in the virus. Four candidates are closest to

commercialisation by the year-end, with three already
getting orders from countries a ected by the
pandemic.
FONT SIZE SAVE

If 2020 was about the race to discover the vaccine,

2021 will be about transporting it at a never-seen-
before scale. The adversity has also opened up an
opportunity for glass companies that manufacture
vaccine vials.

The pre-pandemic era

In the last six years, the Indian government, under its
various vaccination initiatives, has vaccinated 36
million children and 9.1 million pregnant women
across 690 districts of the total 718. The state-
sponsored vaccination drive provides vaccines against
17 diseases, with BCG and polio vaccines being the
largest initiatives.

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12/14/2020 Piramal group: 2021 is all about vaccine transportation. Piramal, SCHOTT KAISHA are ready with sturdy vials - The Economic Times

The entire supply for polio and BCG vaccine vials in

India comes from a plant owned by Piramal Glass in
the small city of Kosamba in Gujarat. But Piramal isn’t
the lone glass maker in the city. Its neighbours include
Gerresheimer of Germany and Haldyn-Heinz Fine
Glass, a joint-venture company between Germany’s
Heinz Glas and its Indian partner Haldyn Glass.

As one zooms out of the small city, which is just 50 km

away from Surat, the number of glass factories
increases. The boards read global names across the
western coast of Gujarat—from Asahi to Schott AG’s
and its Indian JV, SCHOTT KAISHA.

So, what’s making the coastal belt of Gujarat a

favourite among the global glass industry? Large
pharmaceutical client base, proximity to the port and
raw material providers like GHCL, India’s second-
largest soda ash producer, and availability of sand
silica through companies like Gujarat Mineral
Development Corp.

However, pharmaceutical packaging is more of a bulk

product when compared to glass used for the
packaging of cosmetics and spirits. Pharmaceutical
glass of the type-1 kind used for vials and ampoules
gets less than 10% margin as compared to glass used in
hi h d l d t k i ith 20% l

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12/14/2020 Piramal group: 2021 is all about vaccine transportation. Piramal, SCHOTT KAISHA are ready with sturdy vials - The Economic Times

high-end or luxury product packaging, with 20%-plus

margin, according to industry sources.

“Anything in the luxury segment will always command

a better price. In pharma, it is very important to make
the set-up cost e ective without compromising on
quality. The pharma industry also has drug-price
control and regulations, so the packaging has to be
made feasible for the product,” says Rishad
Dadachanji, director at SCHOTT KAISHA.

While SCHOTT KAISHA makes products only for the

pharma industry, many other glass companies
including Piramal Glass have been focusing on

catering to the more margin-accretive high-end or

luxury glass market comprising cosmetics, spirit
bottles, among others.

As of FY20, Piramal Glass earned 40% of its revenue

from cosmetics and perfumery segment, 37% from
specialty spirits market and 23% from pharmaceutical
packaging sales as against 30% in the previous
nancial year.

But then the real 2020 happened!

Opportunity in adversity
First came the pandemic, followed by subsequent
lockdowns, leading to a global economic recession. It
was only by November that the world nally heard
some good news — two vaccine candidates, one from
P zer-BioNTech and another from Moderna, reported
e icacy of over 90% and suddenly the coronavirus
turned assailable.

With two vaccine candidates ready and around four

more in nal testing phases, the borosilicate glass
single-dose and multi-dose vials were back in demand.

Piramal Glass saw a 30% rise in sales of specialty vials

used to bottle medicines in the June quarter, due to
the surge in demand as more and more drugs were

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12/14/2020 Piramal group: 2021 is all about vaccine transportation. Piramal, SCHOTT KAISHA are ready with sturdy vials - The Economic Times

being made to combat the pandemic. The company is

one of the major global suppliers of type-1 borosilicate
glass, which is primarily used by the pharmaceutical
industry due to the product’s low-chemical reactivity.

“The demand for high-quality perfume acons was

down in the last few quarters relative to the prior year
due to Covid-19. In the latest quarter, Gerresheimer
has been able to o set the lower revenues from
cosmetics packaging with higher revenues from drug
packaging and drug-delivery devices,” said the German
glass vial maker in October.
Other
companies
"The vial has to be able to like Japan’s
withstand it (e treme Nipro also
reported a
temperatures)… So, an
substantial
allocation needs to be made of increase in
appropriate glass vials for the glass
appropriate vaccine." tubing,
vials, and
— -- Nada Sanders, distinguished professor of sterilised
SCM, Northeastern University (US)
syringes,
mainly to
Europe and the US.

Big relief in a small package

Unlike the polio-immunisation programme where less

than 1% of India’s population gets vaccinated annually,
Covid-19 vaccination drive will be truly universal as
the goal would be to get everyone vaccinated. The
world population is estimated to be around 7.704
billion people. Factoring in two doses per person and a
30% wastage rate, observed during earlier vaccination
drives, the world will need over 20 billion doses. These
doses will be delivered to end-users either via single-
dose vials or multi-dose vials.

Apart from the scale of operations, another level of

complication is added due to the cold-chain factor,
especially when it comes to the P zer-BioNTech
i BNT162b2 Thi i i lt ld

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12/14/2020 Piramal group: 2021 is all about vaccine transportation. Piramal, SCHOTT KAISHA are ready with sturdy vials - The Economic Times

vaccine BNT162b2. This vaccine requires ultra-cold

storage requirements of over minus 70 degree Celsius.
According to reports, BNT162b2 will be transported in
special boxes comprising ve trays that will hold up to
195 vials per tray. Further, the frozen vaccine will be
packaged in 2 ml glass vials, each of which will hold
ve doses that will have to be diluted while
administering the vaccine. Every shipment will be
surrounded by 50 pounds of dry-ice pellets and GPS
temperature monitors. The company is aiming to
produce 50 million vaccine doses in 2020.

Transporting Moderna’s mRNA-1273 is slightly less

complicated as the vaccine will use standard

vaccination infrastructure and can be stored for six

months at temperatures between minus 20 degree
Celsius and minus 4 degree Celsius. It can also be
stored in a refrigerator at temperatures of 2-8 degree
Celsius for up to a month. According to Moderna, there
will be no need to dilute the vaccine while
administering it. By the end of 2020, the company will
produce around 20 million doses.

“All products are not the same, hence demand is not

the same. In addition to the cold temperature, there's a
certain amount of handling involved -- moving the
product from factories, loading it onto the plane, and
transporting it all the way to vaccination centres. So,
the vial has to be able to withstand it and not every
material of the glass vials can (be used)… So, an
allocation needs to be made of the appropriate glass
vials for the appropriate vaccine,” says Nada Sanders,
distinguished professor of supply-chain management
at Northeastern University in the US.

In 2021, the scale of vaccine production and supply is

expected to ramp up signi cantly with just these two
vaccine makers expected to produce close to 2.3 billion
doses. Some of the other vaccine candidates like
Russia’s Sputnik V, one from Gamaleya Research
institute, Astrazeneca-Oxford vaccine, China’s
candidate developed by Wuhan Institute of Biological

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12/14/2020 Piramal group: 2021 is all about vaccine transportation. Piramal, SCHOTT KAISHA are ready with sturdy vials - The Economic Times

Products and Sinopharm are also close to nal testing.

According to Piramal’s German peer Gerresheimer,

there will be a global requirement of 2 billion - 3
billion units for Covid-19 vaccination during 2021
and 2022. Of these, the German company e pects to
deliver at least 800 million units over the ne t two
years.

The competitive edge

The global pharmaceutical packaging is little over
USD90 billion industry and by 2027 is expected to
touch USD142.59 billion, according to market
estimates. The borosilicate type-1 glass vials come in
two varieties — moulded, the kind which Piramal,
Gerrisheimer and SGD Pharma make; and tubular
type, made by Schott AG, Nippon Electric Glass and
Corning of US.

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12/14/2020 Piramal group: 2021 is all about vaccine transportation. Piramal, SCHOTT KAISHA are ready with sturdy vials - The Economic Times

For now, tubing companies have an edge with both

Schott and Corning receiving orders. But as the
commercialisation ramps up, others will join the race
too. Given that Schott already makes 11 billion pharma
containers per annum, it is obvious that is more widely
available. However, Vijay Shah, vice-chairman, Piramal
Glass, says that moulded has its own bene ts — lower
breakage due to thicker walls of the vial, better ability
to withstand cold temperatures and better
a ordability in large or multi-dose sizes.

Some tubing companies like Corning and Nipro are

even marketing improved pharma glass variants —
Valor and Vialex respectively, which o er improved
strength.

Given that the vaccination drive will be widespread,

and the vaccine will have to travel to rural areas across
the globe, the tilt seems to favour moulded players
unless vaccine makers decided to use freeze-drying
techniques which leans towards tubing.

“Wherever and whoever is working on the vaccine they

are also doing stability studies of the tubular as well as
moulded vials. As and when the vaccine is ready,
parallelly they also have vial options ready with them.
So far, nobody has placed any order yet, but all the
vaccine candidates have got our vials in stability

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12/14/2020 Piramal group: 2021 is all about vaccine transportation. Piramal, SCHOTT KAISHA are ready with sturdy vials - The Economic Times

studies,” Shah says.

Preparing for the future demand, Shah says that

within a span of 15 days, Piramal can add 80% more
capacity to its existing 45 tonnes per day borosilicate
glass capacity in Kosamba. The current capacity
roughly translates to 1.2 million vials a day.

Another Gujarat-based company, SCHOTT KAISHA, is

also ramping up its capacity. The company currently
makes 3.2 billion pieces per annum of vials, ampoules,
syringes and cartridges, but by the end of next year, its
capacity will increase to 3.5 billion pieces, says
Dadachanji.

According to glass industry reports in June, Piramal

Glass has been in talks with France's Sano and
Indian rms Cadila Healthcare, Bharat Biotech, and
state-run BIBCOL (Bharat Immunologicals and
Biologicals Corporation Limited) for possible deals,
though Shah did not con rm any names with ET
Prime.

The way forward

As the vaccine race intensi es and countries begin to
vaccinate large swathes of the population, the glass
vial makers will most likely see a sharp rise in demand.
It is a little surprising then, that big global private-

equity giants like Bain and Blackstone are reportedly

chasing Piramal Glass despite steep valuations.

Even the valuations of listed global peers — from

Germany’s Gerresheimer AG to US-based Corning to
China’s ChongQing Zhengchuan — are on the rise
quarter on quarter anticipating the demand surge next
year.

All eyes are now vaccine makers.

(Graphics by Abdul Sha q)

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3 COMMENTS ON THIS STORY

Pavan Jhamb Jhamb 13 hours ago

After use how are glass vials collected and processed or recycled? Who is responsible for
ensuring this? Are we in for another environment hazard?

Ranganathan Poola 4 days ago

Why has the SII of Pune not been included in this article?

Ahmad Khan Dalwai 6 days ago

THE ARTICLE GIVES DETAILED PICTURE OF VACCINE PACKAGING SOLUTIONS

COMPARING MOULDED-GLASS VIALS VS. TUBULAR VIALS, DIFFERENT VIAL
MANUFACTURERS WITH THEIR PRODUCTION CAPACITIES AND PROBABLE
CUSTOMERS. ALSO THE GRAPHICS ARE QUITE RELEVANT. IT WOULD HAVE BEEN
BETTER IF DATA ABOUT SERUM INSTITUTE WOULD HAVE BEEN INCLUDED IN THE
ARTICLE.

VIEW COMMENTS ADD COMMENTS

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