Excessive rainfalls in South India has impacted agro-chemical industry growth: Dhanuka Agritech

Data from CARE Ratings shows that agro-chemical companies have seen an 11 percent increase in production in the first half of the year. Exports have risen by 13.5 percent for the industry and imports are higher by 37 percent.

MK Dhanuka, MD of Dhanuka Agritech, said that excessive rainfall in the month of October and November impacted growth for the industry as a whole. South India was majorly impacted, he said.

“Because of excessive rainfall in the month of October and November, especially in South India – Karnataka, Andhra Pradesh, Telangana and Tamil Nadu -- growth has been impacted for the agro-chemical industry as a whole because South contributes around one-third in the topline of the company as well as more or less in the industry,” he said.

On revenue growth, Dhanuka said, “We are expecting around 10 percent growth in Q3 and similar growth in Q4. By the year end we are expecting around 22 percent growth in the topline.”

Rajesh Aggarwal, MD of Insecticides India, said that he is expecting a revenue growth of 10 percent in FY21. “It was a difficult year because of COVID. So Q1 was very positive, for us Q2 was not so good. But we will make our recovery in Q3 and we hope that second half should show about 10 percent growth. So, overall we will be near double digit growth in this full year,” he said.

On the Pesticide Management Bill 2020, Aggarwal said that he is expecting more reforms in the bill, which are currently absent. “As industry we expect that there should be a lot of reform in the bill. So, we wish that it should go to the expert committee and then it should be considered because lot of improvements which were required technically, we as an industry feel are not done. Rather there are a lot of punishments and the bill has been more criminalize. Instead of supporting the industry, it is more towards criminalisation of activities of the industry. So, we are not very happy with the present form of the bill,” he said.

On shortage of containers, Dhanuka said that it has led to freight increase from China by more than 3-4 times. “Dhanuka is importing around 25 percent of its raw material consumption mainly from Japan and some portion from China. Because of shortage of containers, the freight from China which was around $800-1,000 for 20 feet container, it has gone up to $3,000 per container,” he said.