Brazilian Plant to Boost Capsule Supplier’s Positioning

Q: What opportunities have you detected to grow in the capsule market?

A: This is determined by our clients’ production. As they develop new solutions, they will decide the component or capsule they will work with. When clients advance in their development process, they start inquiring about capsule sizes or colors and when the product is close to launching, that is when we start to see a real business opportunity. Supplying new developments can take up to two years.

At Capsugama, we estimate growth based on population growth and age. The market is generally stable so this method has been very effective. Working according to the country’s epidemiological profile can also be good but this is a longer process as we need to know the exact treatment for the patients and if those products require capsules.

Our relationship with clients can also help to determine prices. Larger orders are usually spread throughout the year, which is usually a preference for both parties as we can plan according to stock and the price for the client is lower. In 2019, our client network grew 20 percent, so our sales are expected to grow around 10 to 15 percent.

Q: How has your work been impacted by the COVID-19 outbreak?

A: We have been working at around 80 percent our normal capacity, which is positive. We have been making sure to comply with all sanitary measures recommend by the government as we maintain business almost as usual. What did change was our contact and communication with clients.

Thanks to ACG’S plant in Brazil, our imports have not suffered disruption during this time. Moreover, this plant will help us to reduce delivery times in the future, although this depends on client needs and preferences. The plant has all local certifications and follows all regulations but many clients have different requirements or preferences regarding capsule sourcing. The next step for the plant is to comply with international regulations, but that process takes around two years. We need those certifications to export and to gain clients’ trust. The first step for Mexico will be to get COFEPRIS’ approval as this opens the doors for many Mexican pharmaceuticals. To date, we have many clients that would benefit from this plant because capsules are originally brought from India, making the process around 80 percent longer than what we can offer now. We focused the plant’s production on the most required sizes of hard capsules globally: 0, 00 and 1.

Q: What are your short-term goals for Capsugama?

A: We normally report double-digit growth and this year the outcome is expected to be the same. Our prices are very competitive and we offer the highest price-quality ratio. We just have one competitor and we can say that Capsugama is outperforming this company.

Capsule production is still very limited in the country. The economic conditions in Mexico could be the reason why we cannot fully exploit our production capabilities. Geographically, all capsule production originates in India. It is very unlikely to find production somewhere else, which is an advantage for our company now that ACG has opened a plant in Brazil. That being said, I do foresee one of the large capsule manufacturers opening a production plant in the country in the very near future.

Capsugama is a Mexican supplier for the pharmaceutical and food supplements industries that specializes in empty, hard capsules of gelatin and plant-based HPMC. The company also commercializes encapsulators, capsule counters, blistering machines and labeling machines, among other solutions.