Dec. 14, 2020
Agrow Allied Ventures Pvt ltd (AAVPL) is a leading pesticide manufacturer in India, with its 2,4-D capacity in the leading position. The company is seizing the opportunity to expand its production capacity. Recently, Mr. Rakshit Sehgal, the Managing Director of AAVPL accepted an interview with AGROPAGES and introduced the company's future development plan. He also shared his views on the development of the agrochemical industry in China and India.
1. The global crop protection chemical market is valued at USD 54.89 billion in 2016 and is expected to reach USD 70.75 Billion by 2021, growing at a CAGR of 5.15 percent during the forecast period of 2016-2021. How do you see this market evolving in India?
Rakshit Sehgal: India plays a very vital role in the global agrochemical market. Currently Indian agrochemical market is valued at $ 5 billion growing at CAGR of 7-8%. We estimate by 2025 India Agrochemical market will reach $ 8 billion. India contribute to nearly 10% of the global agrochemical industry today and is one of the fastest growing markets in the world. Today domestic consumption of agrochemicals is valued at $ 3 billion and rest $ 2 billion of manufactured products are exported.
Agriculture is the backbone of India economy giving livelihood to 70% of the population. India has huge land area under cultivation with wide ranges of crops grown throughout the country. However in India the consumption of pesticide is very low currently at 0.65 kgs per hectare in comparison to 3 kgs per hectare in developed countries resulting in low yield per hectare. This is mainly because of cheap human resource to work in the fields. However with increasing manpower cost and continuous requirement of food with increasing population, the consumption of pesticide is bound to grow in India. India is also a strong exporter of agrochemicals today. Today India is the most preferred destination for multinational for collaborations. The companies in India are continuously investing to enhance manufacturing capacities as they can foresee increasing requirements from export markets. In next 5 years, we are confident that there will be tremendous growth in Indian agrochemical industry.
2. What are the challenges faced by Crop Protection Chemicals manufacturers? How do you address those challenges?
Rakshit Sehgal: India has a huge huge potential to grow and emerge as a strong manufacturer in global agrochemical market. However in India, 70% of the products are still imported from China and rest are produced locally. It is very important for our industry to reduce dependence on China and be self-independent. To ensure that , it is very important for our country to encourage manufacturing of basic chemical industries, setting up of chemical industrial parks, provide basic infrastructure and speed up government clearance process to encourage manufacturing. To set up a chemical plant, it requires min 3-4 years to complete Central and State regulatory clearance process from multiple department and agencies.
Agrochemicals is also a highly regulated market. Today 70% of the global market is still controlled by multinationals who exploit farmers by charging very high prices for their monopoly products. To register any new molecule for manufacturing or to import requires min 5 years along with huge investment. Therefore introduction of any new molecule is a big challenge for the industry. As generic molecules are phasing out and introduction of new molecules are very important for our industry, it is imperative that the regulatory process should be eased out so we can deliver new products to our farmers at reasonable prices.
3. What are the major expectations of clients from Crop Protection Chemicals manufacturers? How do you strategize to meet those expectations?
Rakshit Sehgal: The most important responsibility for us is to serve our customer with our quality products at the right time at the most competitive prices. As the agrochemical market is crop and seasonal based, the availability of the product at the time of the sowing is most important. As we are serving in more than 60 countries and have multiple customers globally and in India, we have to prepare 6 months in advance with our purchases and production plans. We as a company is also continuously working with our strong R&D team to develop new chemistries so we can serve our farmers with most effective solutions to increase their yields and farm income. Our company has assigned significant budgets for new products and process developments. In exports markets, we have to continuously invest in data generation for our customers so we can register products in their country and support them with our product range.
4. How is your company positioned in this segment?
Rakshit Sehgal: Agrow Allied Ltd has positioned itself as one of the key players in the agrochemical industry today not only in India but also on global platform. We are currently a strong technical and a formulation manufacturing company with a diversified product range. Our company has grown exponentially in last 3 years and will continue to maintain healthy growth rate in the coming years. We currently manufacture 15 active technical products and nearly 200 formulation products meeting requirements of our valuable customers. We have a strong PAN India and Global presence to sell our product range. Currently exports contributes 40% of the topline with our presence in more than 60 countries and 3 international office with footprints in South and North America, Asia, Africa, Middle east, Australia and CIS countries. AAVPL has a state of art manufacturing plants, a strong R&D facility and pool of talented and experienced marketing and registration teams who are working day and night to make this company a world leader. Our company has GMP, ISO 9000/14000 certifications and also “STAR EXPORT HOUSE” recognized by Government of India. With our strong performance last year, Agrow Allied Ltd was awarded as the” Company of Year” and “Export Company of the year” by the industry.
5. What are the major factors that set you apart from other players in this segment?
Rakshit Sehgal: Agrow Allied Ltd has strategically planned its own space to grow in the industry. The two major areas where Agrow Allied Ltd has focused are:
(1) Technical manufacturing of specialized and generic molecules.
(2) Global footprints supported with registrations.
Today India has more than 4000 formulation manufacturing companies but very few technical manufacturers. The supply of technical always remain challenge for the industry as it requires huge investment and have regulatory challenges. From day one, Agrow Allied Ltd focused on manufacturing best quality of technical products at most competitive prices. The company has designed its product portfolio with diversified products range which includes herbicides, insecticides and fungicides to cover all crops and seasons. Currently in our product portfolio herbicides contributes nearly 50% revenue followed by insecticide 30% and fungicide 20%. Herbicides are the fastest growing segment of agrochemicals because of increasing cost of labor. Our company will be continuously investing in new herbicides for multiple crops and pest to meet market requirements.
The other strong area of growth is Exports. With global presence in more than 60 countries, we are not dependent on any single market or customer for growth. As exports are mainly dependent on registrations, our company has invested huge resources on data generation and R&D to register our products in many countries. We hold more than 400 global products registrations and expecting many more in next 2-3 years. Along with a strong presence in Indian market and collaborations with multinationals, Agrow Allied Ltd has positioned itself as one of the most respected and renowned company in the agrochemical industry today.
6. Kindly elaborate on the sophisticated and modern manufacturing facility of Agrow Allied and product offerings the company is rolling out to its clients. Highlight its USP. What impact has it created in the market?
Rakshit Sehgal: Agrow Allied ltd has a state of art manufacturing plant to produce specialized and generic technical and formulation products. Agrow Allied Ltd has a sophisticated and modern production facility with top-of-the-line fully pre-programmed machineries for technical synthesis and formulations.
Our current technical manufacturing capacity stands at 20,000 mts annually with a diversified product portfolio. Our company today is the world Third Largest Manufacturer of herbicide named 2,4-D Series ( Acid / Amines / Salt and Esters ). Our other strong technical product portfolio includes HERBICIDES like Metribuzin / Clodinafop Propargyl Chloride / Bispyribac Sodium /Atrazine / Pretilachlor / Glyphosate, INSECTICIDES like Thiamethoxam / Lambda Cyhalothrin / Bifenthrin/ Diafenthiuron and FUNGICIDES like Tricyclazole / Metalaxyl / Thiophanate Methyl. Our R&D team is continuously working to achieve better quality and yields in our plants. We are further investing in new chemistries, product and process development. Our company will be introducing 5 new de-patented products in next 2 years in our product range which will significantly impact the topline and bottom line for the company.
Our formulation plant is well equipped to manufacture all kinds of Liquid / Powder and Granule formulations. We currently produce more than 250 formulations in all kinds a packaging sizes starting from 5gms to 1000 kgs as per market requirements. Our company expertise in combination products as they are the future of the industry.
7. Tell us about the overall journey of the company. How has it nurtured itself over the years? Illustrate the growth it has observed in terms of revenue, clients, and geographical presence?
Rakshit Sehgal: The journey for Agrow Allied Ltd has been very dynamic. Like every company we have seen high and lows but have always come out stronger and confident than before. We as a company has learned a lot with our experiences and developed our strengths and surpassed our weakness. However we still believe we are still at nurturing stage. As agriculture is a basic and most important industry for every country we see opportunity in every part of the world. We believe a lot has to be learned and done.
In past 3 years, our company has maintained a min 35% CAGR and is confident to keep the pace going. We are continuously investing to increase our manufacturing capacities and introduction of new products. We are also collaborating with multinationals as strong source of supply for their global markets. In coming years as we expect many new registrations to be received from various new and existing exports markets , we target to achieve min 50% of our revenue from exports. Our company is further in process of developing its local dealer / distribution network to reach millions of farmers directly with our quality products. We feel a responsibility towards the farmers of our nation we will be working continuously to serve them with our quality products.
More articles are in 2020 INDIA PESTICIDE SUPPLIERS GUIDE magazine.
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