How much investment is required for pharmaceutical/Ayurvedic third party manufacturing?

What does inventory require to get manufactured pharma/Ayurvedic product at third party basis?Inventory may vary according to your product selection, dosage form, packing material requirement etc. Your inventory also may vary according to batch size of product. Cheap product will require less investment but their batch size may large in quantity. Likewise costly products require more inventory but their batch size may be small in quantity. Some manufacturer take small batch for all products, hence one have to invest less. There is not a fixed amount of investment for getting manufactured your product at third party basis. Roughly you can calculate your investment according to below given information’s:

Tablet/Capsule:Batch Size: 25000 tab/cap  Pack: 10*10 Blister/alu-alu
Packing material require: 250 Box and roughly 2-3 kg foil. But printer will not print such small quantity. You have to print minimum 500 or 1000 boxes and 5 kg of foil. One time 1500/- cylinder charges for one color and 2500/- for two color foil cylinder charges, you have to pay to printer.

Estimated cost will be calculated as per 1000 box printing material:
Box= 1000*1.5=1500
Foil=5*450=2250
Cylinder charges: 1500
Total packing material inventory: 5250/-

Now suppose, third party manufacturing cost of Ofloxacin tab is 90/- per 100 tab box.
Total number of box to be manufactured is 250*90=22500
Packing material inventory= 5250
Total cost= 27750/-
Now calculate the costing for first batch: 27750/250=111/- per box.
Now calculate the costing for next batch: 22500/250=90/-

For next 2 batch, you may not require new box printing but you may require some foil. Here we are calculating costing for first two batches only.
Average costing= 111+90= 201/2= 100.5/- per box.

Liquid/syrup :Batch size: 1000 pc Pack 60 ml. with outer cartoon
Packing material required is 2000 pc
Box: 2000 pc*0.75/-= 1500/-
Lable: 5000 pc*0.10/-=500/-
Total Packing material: 2000/-
Suppose, cost for 60 ml oflaxacin susp. is 6.5/- per pc
Manufacturing cost: 6.5*1000= 6500/-
Packing material inventory: 2000/-
Now calculate the costing for first batch: 8500/1000=8.5/- Per pc
Now calculate the costing for next batch: 6500/1000=6.5/-
Average costing: 8.5+6.5=15/2=7.5/- per pc

Ointments/Creams/Gel :Batch size: 1000 pc Pack: 20 gm with outer cartoon
Packing material required is 1000 pc
Box: 2000 pc*1/-= 2000/-
Lami tube: 10000 pc*2/-=20000/-
Cylinder charges for one color is 1500/- and for two color 2500/-(one time investment)
Total Packing material: 23500/-
Suppose, cost for 20 mg tube of oflaxacin cream is 6.5/- per pc
Manufacturing cost: 6.5*1000= 6500/-
Packing material inventory: 23500/-
Now calculate the costing for first batch: 30000/1000=30/- Per pc
Now calculate the costing for next batch: 6500/1000=6.5/-
After next 10 batches, you don’t need to invest in Lami tube. But after 2000 pc, you will need boxes for this and you can add 1/- per pc more costing.
Now costing for next 10 batches costing will be 7.5/- per pc
Average costing: 30+6.5+7.5+7.5+7.5+7.5+7.5+7.5+7.5+7.5=96.5/10=9.65/- per pc.

Injections:
Batch size: 2000 pc Pack: 1 ml with outer cartoon
Packing material required is 5000 pc
Box: 5000 pc*0.40/-= 2000/-
Lable: 5000 pc*0.05/-=250/-
Total Packing material: 2250/-
Suppose, cost for 1 ml oflaxacin injection is 3/-per pc
Manufacturing cost: 3*2000= 6000/-
Packing material inventory: 2500/-
Now calculate the costing for first batch: 8500/2000=4.25/- Per pc
Now calculate the costing for next batch: 6000/2000=3/-
Average costing: 4.25+3=7.25/2=3.63/- per pc
Above costing is for example purpose only. It is not the actual cost sheet of any product. According to above basis, you can calculate, how much you have to invest initially to start you own pharma marketing company.

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Published by

Ajay Kamboj

Full Time Blogger, Part Time Entrepreneur and Partial Time Helper for New Start-UP's in Pharmaceutical, Ayurvedic and Nutraceutical Sector. Contact him at pharmafranchiseehelp@gmail.com

5 thoughts on “How much investment is required for pharmaceutical/Ayurvedic third party manufacturing?”

  1. Pingback: How to Start Pharmaceutical Manufacturing Unit in India? - Pharma Franchise Help
  2. Sujit pawar says:

    How much totol investment is required for third party pharmaceutical manufacturing unit with including all requirments ( machines cost , raw material cost)

  3. Dharminder says:

    We are manufaturing of Pharmaceuticals Beeta & Non Beeta (Tablets , Capsules & Sacheies ) our unit at Distt. Patiala(Pb) We are looking for third parties PCD & Franchies for our units

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