India crop protection industry confirms to consolidate
Jul. 13, 2011
"We are de-risking our linkages with the government consciously by increasing our non-subsidy portfolio, which the Sabero acquisition is part of that strategy,” said A Vellayan, executive chairman, Murugappa Group. “Fertilizer is the base, but we are looking at several add-ons like water soluble, organic manure, micro nutrients, soil testing and education.”
Being a regulated sector, fertilizer companies such as Coromandel see limited growth potential and technology-driven agrochemicals is becoming a natural and logical diversification. Currently, 12 percent of sales come from non-subsidized products and contribute to 27 percent of profits. After including Sabero, Vellayan sees that changing to 30 percent of total sales and half of profits in a few years.
Sabero, a producer of fungicides, herbicides, insecticides and specialty chemicals has global operations across three continents of Europe, Latin America and Australia besides a manufacturing facility in Gujarat. Since half of their turnover comes from exports, it will remain a key instrument.
Sabero will come in to new management in September. Their first focus will be to improve capacity by almost threefold and even Coromandel is undergoing a 900,000 ton of organic expansion in its Kakinada plant, which will be ready by July 2012.
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