Interview: The future of agrochemicals in India is very good!
Jul. 8, 2011
In an interview with ET Now, Rajju Shroff, CMD, United Phosphorous, talked about the growth opportunities in global agrochemicals industry and company's future plans.
ET Now: Do you believe that for FY12 and possibly even FY13, things are already showing a sign of improvement and would show much more colour than what FY11 showed?
Rajju Shroff: I would like to tell you that India chemical industry or pesticide industry is very advance. We are able to make products, which are superior quality at a competitive price, so future of our exports is very good. Today out of 6000 crores turnover, 80% of our revenue comes from our export, so in international market we are growing quite well and future we see is very bright as far as export is concerned.
ET Now: You have said that you would look to capitalise on global growth opportunities with the cash that you have by making small acquisitions. Is something on the cards in the next six months?
Rajju Shroff: We regularly study the companies which are for sale or which are in difficulties. After our study, our team visits and we get confident that once we take over, with our expertise, our technical input we will be able to turn it around and so far we have been very successful. Now a country like Brazil, which is fastest growing in agriculture, we are negotiating with one company and we have already acquired 51% share in another company in Brazil. What I wanted to tell you is Indian scientific talent today, our PhDs and our chemical engineers are much better or equal to anywhere else in the world and that's why we have unlimited opportunity.
ET Now: How are these acquisitions doing, Sipcam for example, which you acquired in April 2011?
Rajju Shroff: They are doing very well. Of course, it will take its own time but our team is now studying what are the strategy they were following and what we will follow in future because we have to study and change our course of action. What are the product, which we will introduce there? What are the products where we have advantage? All that study is going on.
ET Now: A statistics says that India has a 20% CAGR growth till FY11. In FY11 there was 25% growth in India. How would the domestic market shape up with all that's happening to the product prices as well?
Rajju Shroff: As a matter of fact, agrochemical domestic market is growing well. Domestic market is quite big but today the Government of India has agreed and everybody has agreed that training and education of farmer, the demand will go up. At present farmers need it, they want it but Indian industry is not able to reach them. Government's extension service according to government has failed but now Government of India has suggested Ministry of Agriculture that it should be private-public partnership in extension work and whenever the private sector has gone in, they have helped the farmer, the yield of the crops has gone up very well. More the yield increase, better the hybrid rice or hybrid crops they use, more demand will grow. I am very optimistic, future of agrochemicals in India is very good.
ET Now: Close to $4 billion worth of agrochemical products would be off patent by 2014, this presents a huge opportunity for generic players like United Phosphorus. How do you plan to tap this opportunity? Are you already kind of working around with the generic versions of these drugs?
Rajju Shroff: In our company, we study which are the products, what is the market and which are going off patent. Our R&D department, our plant is already with those products. Not only that, we are developing some generic product into new combination, and we have patented some of this new combination and getting a good market share in India as well as in the world.
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