Enrique Garza
View from the Top

High Investment in Technology Needed to Encapsulate Market

Fri, 02/22/2019 - 13:47

Q: What challenges is CAPSU-GAMA facing to expand its share in the capsule market?
A: CAPSU-GAMA represents ACG Group’s high-tech capsule and packaging equipment. ACG Group is one of the two largest capsule distributors worldwide. There are very few suppliers in the capsule market, even on a global scale. While capsules may seem simple, they require a complex engineering process and technology so it is very hard for new companies to enter and succeed in this market niche. To manufacture capsules, it is necessary to have significant experience in the sector and a large initial investment. Manufacturing capsules is an expensive process with a slow return on investment.
Before the introduction of ACG Group products, our competition had a monopoly in the Mexican market for 30 years. Penetrating this market requires hard work because it sometimes can take up to three years for a client to switch to our technology. However, clients are now prioritizing the quality of the product over its price so we expect that they will continue to switch to our products. We expect to grow at a steady pace and capture about 20 percent of the market.
Q: What specific benefits would you highlight regarding ACG Group’s capsules?
A: ACG Group began operations producing capsules manually and, over many years of research, developed the technology and processes it has today. Quality is the main advantage of our capsules but CAPSU-GAMA also offers clients two types of tech support services. The first analyzes the performance of equipment to improve production processes. The second concerns the capsules’ design and filling. Large pharmaceutical manufacturers in Mexico, such as Sanfer, Pfizer and Sanofi, buy their capsules from us but they fill them in-house because they need absolute control of the filling process.
Q: What is CAPSU-GAMA’s share in the food supplements market?
A: In Mexico, the food supplement market is very small in comparison to the US, representing about 10-15 percent of the capsule market versus about 30 percent in the US. For that reason, our operations in Mexico are mainly focused on the pharmaceutical sector.
Moreover, food supplements face weaker regulatory restrictions so manufacturers prefer lower-quality alternatives that are produced at a lower cost. The food supplement market is also more artisanal, with many processes being done by hand or using old machinery, unlike the pharmaceutical industry, which invests heavily in technology so its processes are automated.
Q: Where is the sector heading in terms of technological development?
A: There are many opportunities for high-tech capsules. For instance, three new methods are gradually permeating the market. The first is capsule filling for solids that must be inhaled, which can have applications for respiratory diseases. These capsules are put in place and then broken so the patient can breathe in the medicine. The second are extended-release capsules. Normal capsules dissolve in 15 minutes but some medicines cause stomach problems if absorbed by the stomach. For that reason, some medicines, such as Omeprazole, are packed in micro-pellets, which take longer to dissolve and thus their impact on the stomach lining is smaller. Other capsules that take even longer to dissolve can safely travel to the intestine.
The third application are liquids in hard gelatin capsules. Soft capsules are often used to pack liquids and hard capsules for solids. However, some liquids cannot be packed in soft capsules due to their chemical composition so a technology was developed to pack these medicines into hard capsules.