English 
搜索
Hebei Lansheng Biotech Co., Ltd. ShangHai Yuelian Biotech Co., Ltd.

Covid-19 impact on Indian agrochem playersqrcode

−− Strong demand momentum, lower input prices, onset of early monsoon, and good water reservoir levels is expected to benefit overall performance for the agrochem players in India.

Jul. 24, 2020

Favorites Print
Forward
Jul. 24, 2020

Covid-19 pandemic has been haunting the global economy since past six months. All the countries and business sectors have been impacted with varied degrees with autos, real estate, travel & tourism among others being impacted the most while FMCG, food related sectors, agrochemicals taking relatively lesser brunt. Nonetheless, 2020 is expected to be a significantly challenging year (harsher even than 2008/ 2009) with year on year degrowth expected across economies and business segments.


Corporates across countries are sailing through these tough times emphasising on workplace health and safety, cost optimisation, supply chain management, retention of workforce (avoiding lay-offs) while serving the customers with available resources and Indian corporates are no exception. India’s first lockdown commenced from March 24, 2020 for a period of three weeks. Except for basic necessities, all the activities including manufacturing were halted as per central and state government directive. 


Nonetheless, post first week of lockdown, manufacturing activity was permitted for essential goods with agrochem categorised under essential goods. Indian agrochem companies recommenced their operations in phased manner from first week of April. However, restriction on manpower usage at plants limited the plant operating rates. Additionally, few local municipalities/ authorities restricted permission for restart, movement of goods, labour due to Covid-19 cases in their respective areas.


Despite manufacturing, supply, logistics related challenges, the Indian agrochem manufacturers regained their strengths and started to serve the farmers immediately as the lockdown started opening up gradually. Normal monsoon forecasts by India Metrological Department (IMD) and good water reservoir levels across the states remained a positive start for the upcoming Kharif season. Demand thus remained resilient for the agrochem and manufacturers who were able to put up their products on retailer’s shelfs are expected to show good performance in April-June quarter.


Indian agrochem players were impacted to an extent during the January-March quarter, particularly towards the end March due to the first lockdown. As per the regulatory requirements, large listed companies operating in the agrochem segment provided the operational and financial impact which is summarised below.

 

Dhanuka Agritech


Temporarily disruption in operations during the initial days of the lockdown resulted in partial deferment of the company’s revenues from the month of March to April-June quarter. Plant operations were resumed in a phased manner from the beginning of April as per Government directives. Since, the company’s product portfolio falls under essentials category, hence the company doesn’t foresee any major impact on the business due to the coronavirus pandemic.


Dhanuka undertook various initiatives to protect employees, communities, and operations to ensure supply chain was not impacted. It encouraged non-critical operations to work from home and carry out interactions electronically while adhering to social distancing norms across its manufacturing sites.

 

Hikal


Due to nationwide Lockdown on 25th March 2020 the company had shut down operations at all its facilities. Being a part of the essential services industry, after getting the necessary permissions from the respective authorities, it restarted operations from 5th April 2020 however owing to the continued restriction in the movement of people and material, the company was not able to operate at optimal capacity during April, May, and even in June.


Hikal doesn’t foresee any major impact on the demand for its products and has not experienced cancellation of any orders. The company is working closely with the vendors to ensure that there is steady supply of raw materials.

 

Insecticides India


Insecticides India underwent temporary shutdown of manufacturing units in compliance with government directives, operations were suspended temporarily and from mid-April, the manufacturing operations resumed in a phased manner. Shortage of workforce coupled with transportation challenges impacted company’s manufacturing and distribution of products.


Due to rise of Covid 19 pandemic globally, management took a strategic decision to strengthen its balance sheet and focus on reducing inventory and cash collections in view of challenging times ahead.

 

Meghmani Organics


In early March, Meghmani Organics indicated that out of total imports, around 65%-75% imports are sourced from China. Its dependency on China is for only one major raw material ingredient with respect to one of the finished products which constitutes around 17%-20% of revenue from Agro Chemical business. The company had adequate inventories for the quarter. The company didn’t envisage any major impact on its export business in other geographical areas when the supplies from China normalize in coming months.


In mid-May, the company announced that all its plants have resumed partial operations and were operating at 30% - 40% capacity.

 

PI industries


Initially faced transportation, logistical, manpower availability challenges which have improved over last couple of months. Manufacturing sites at Panoli and Jambusar were fully operational by early-June, however the R&D site was operating at lower scale. Created a temporary staying facility for key employees/ workers at plant site to ensure continuity of operations. 


Experienced increased costs due to additional arrangements for safety, manpower, transportation, etc. also witnessed upsurge in raw material prices on Chinese imports amid initial Covid-19 impact. China supply and price situation has improved since Apr/May. The company is maintaining higher inventory levels to ensure continuity.


Covid-19 disrupted operations and movement of goods and resulted in partial deferment of company’s revenue to April-June quarter.

 

Rallis India


Rallis India temporarily suspended manufacturing activities in accordance to government directives. The company resumed operations at its plants located at Lote, Ankleshwar, and Dahej effective April 27, 2020 after completing critical maintenance jobs which were taken up by advancing the Annual Shutdown.


During January-March quarter, Covid-19 impacted the company’s dispatches both in international and domestic markets. it also took one-time charge due to Covid-19

 

Sharda Cropchem


Sharda Cropchem announced that its business operations remained unimpacted due to Covid-19.

 

Sumitomo


Owing to restrictions imposed by authorities due to Covid-19, Sumitomo’s plant operations at all manufacturing units, which are located in Maharashtra, Gujarat and Silvassa remained closed from 24th March. The company being engaged in the manufacture of agriculture inputs categorized as ‘essential goods’, commenced operations in its manufacturing units in a partial manner from mid-April after securing permissions from the Government authorities.


The company’s capacity utilisation across plants remained low due to Covis-19; in April capacity utilisation was at 20-25% which improved subsequently to 60-65% in May.

 

UPL


UPL took employee safety measures with work from home policy, providing PPEs, encouraging handwashing, thermal scanning and social distancing norms. It’s all manufacturing plants remain operational and safety stocks were in place for key products. The company formed Rapid Response Team to monitor situation, issue guidelines and solve problems. Collaboration with customers remained through virtual product launches, virtual sales meetings, among others.


During mid-April, Diego Lopez Casanello, Global COO commented, “In most countries, our crop protection and seeds businesses have been classified as an ‘essential commodity’, at par with medical equipment, special protective clothing, medicines, and the food chain. As a global manufacturer and distributor of critical crop care inputs - for which demand remains strong - we are urgently mobilizing to service the world’s needs. We continue to closely monitor changes in consumer behaviour and demand for food items which might have a short to long term impact on cropping and agriculture in general.”

 

To summarise the impact of Covid-19 on agrochem players in India, the impact was witnessed in January-March quarter, however only partially towards the end of the quarter. Pronounced impact may be experienced in April-June quarter during which the manufacturing operations were closed along with stress on logistics and supply chain, however the same may be sporadic across some agrochem players. Nonetheless, strong demand momentum, lower input prices, onset of early monsoon, and good water reservoir levels is expected to benefit overall performance for the agrochem players in India.


[ Survey ]

Join AgroPages TOP 20 India Agrochemical Companies ranking list in FY2019-20

The ranking list of top 20 India agrochemical companies has been published by AgroPages for 7 years since FY2012-13. To understand Indian agrochemical market better and faster, we will make persistent efforts to keep on.

Top 20 Indian Agrochemical Companies in FY 2018-19: Backwards Integration, Forwards “OpenAg”

Join us in this year's list!

 

Note:

1. The list of rankings focuses only on Indian native enterprises, excluding the branches of multinational companies in India.

2. The list of rankings focuses only on the sales of pesticide products(TC & Formulation), excluding the sales of fertilizers and intermediates.
3. If you join this survey, we'll freely publish a PR news online for your company. Please contact: zorro@agropages.com
We'll offer you the Company Directory in the upcoming 2020 India Pesticide Suppliers Guide magazine once the information adopted.

  1. 1. What are the sales of pesticide products(TCs & Formulations) in FY2019-20?
  2. 2. What do you think of the increase/decrease in sales this year compared with last year? Please describe briefly.
  3. 3. What are your company's actions to keep your business running during this tough time?
  4. 4. Please leave your information to submit the survey.
    Your Name:
    Email:
    Company:
    Tel:
    Mobile:
Source: AgroNews

0/1200

More from AgroNewsChange

Hot Topic More

Subscribe Comment

Subscribe 

Subscribe Email: *
Name:
Mobile Number:  

Comment  

0/1200

 

NEWSLETTER

Subscribe India Special Biweekly to send news related to your mailbox