Top 20 Indian agrochemical firms: growth driven by booming market

Highlights:
 

- Top 20 Indian agrochemical firms accounting for above 90% of the total market share in 2013-14

- Majority of companies achieving strong growth

- Indian economy booming, good climate and new releases contributed to the growth

 

Due to the good climate for plantation and the strong demand for agrochemicals, Indian agrochemical market took on a significant growth in 2013 having reached $5.10 billion, 34% up year on year. An industry survey report reveals fast agrochemical growth in Indian market over recent years at an annual 12%, which is expected to reach $6.80 billion in 2017. Of which export will increase at 15-16% and will facilitate the growth of the whole industry; domestic demand will grow at 8-9% which also contribute to the market growth.

 

Insecticide is of the largest sales volume in India, accounting for about 65% of the total market value. Herbicide and fungicide account for respectively 16% and 15%, biopesticide accounts for 4.2% and is expected to reach 10%. Pesticide is applied mainly to cotton, rice, soy, fruit and vegetable. India is the world 4th largest pesticide production country, which relies on agriculture to a high degree. Therefore pesticide plays an essential role in the economic development of India. The consumption of pesticide of domestic market of India in 2013 has increased to certain extent; the new technical applications and the sound development of agrochemical industry have escalated the export capacity of Indian farm product. 
 

According to the ranking list of top 20 global agrochemicals companies published by AgroPages, the entry level to 2013-2014 top 20 Indian agrochemicals is INR 3.90 billion. The total sales of the top 20, if converted to US$, has reached $4.70 billion, accounting for above 90% of the Indian agrochemical market share, which shows a high degree of centralization. What is different from Brazilian market which is dominated by international industry leaders, Indian local enterprises have performed quite well in the Indian market although international transnational companies are important players in the market.

Among the top 20, 19 achieved a growth, of which 17 achieved two-digit growth, only 1 company Sharda Cropchem suffered a slight drop. There are 8 companies having achieved sales of above INR10 billion and 9 having achieved sales between INR5-10 billion. UPL Limited took the No.1 ranking with sales of INR 99.76 billion far ahead of other followers. The Company said that although the rise of raw material price caused certain degree of pressure, yet the good climate for plantation in India and the hot sale of new released product contributed to the increased sales in Indian market. Another eye-catching country is Brazil, where the increased soy planting area resulted in the much increased sales of pesticide in Brazil. Furthermore UPL Limited entered African market in 2013, saying that once registration is approved the African market will bring no small amount of benefit.

 

Bayer CropScience took a leading position in Indian market, supported by its strong research capability and continued release of patented product. In the 2013-14 fiscal year, the Company’s pesticide sales reached INR 28.30 billion. Insecticide was of the best performance in this year with growth rate reaching 40%; additionally Bayer’s 2 novel crop protection products Lesenta and Solomon have become very popular. Rallis India achieved growth of 18%, ranking No.3, attributable to its business restructuring and release of new brands leading to a stable growth; its international sales which accounts for 30% of the total sales benefited from the strong demand from Asia and Latin America, having increased very significantly. Indofil Industries achieved sales of INR 14.60 billion, ranking No.4; to cope with the change of the Indian agriculture and agrochemical industry, Indofil adjusted its strategy by shifting its past focus on crop protection product into crop solutions and would provide selected product packages for different crops according to market demand home and abroad. Gharda Chemicals achieved sales of INR 14 billion, ranking No.5.

 

Other 3 companies reaching over sales of INR 10 billion are respectively Coromandel International, Crystal Crop Protection and BASF. In 2013-14, the No.6 ranking Coromandel International consolidated the sales of its subsidiary Sabero Organics; Coromandel achieved strong growth due to its extended domestic sales network, good performance in Latin America and Asia Pacific. Sabero’s growth was mainly attributable to its series of initiatives, such as increased capacity of core product and restructuring of some factories for higher efficiency of operation. Crystal Crop Protection achieved a big growth at 42%. For BASF India, release of new product and new marketing promotion activities were main reasons for the increase of its sales and profitability.

 

The No.9 ranking Excel Crop Care expressed that good climate this year contributed to the good sales in domestic market; compared to traded product, the Company’s self-produced product took up majority of its export this year. Moreover the Company took necessary measures to optimize the endosulfan production facilities which are now mostly changed into facilities producing multiple products; the Company also released new biological insecticide and fungicide, which plays a good foundation for future growth. Insecticides India achieved sales of INR 8.60 billion, 78% of which came from formulation product with the rest from technical product; the newly released product laid a good foundation for its sales growth. Additionally the Company’s R&D center established jointly with Japanese OAT Agrio in 2012 was completed and new product development started. PI Industries has achieved a strong growth thanks to its product released in recent years and its extended capacity. Krishi Rasayan achieved a growth of 9%, with the growth rate of domestic sales and export being just even; the booming of Indian agrochemical market and the Company’s persistent innovation are important reasons for its sales growth. Dhanuka Agritech said that the abundant rainfall this year enabled good growth of crops, bringing benefit to the Company; the Company released 6 product varieties this year, which are all first-time registrations; additionally Company’s patented product would launch soon.

 

Nagarjuna Agrichem said that the fire accident in June 2012 still had negative impact to its sales, nevertheless the Company managed to achieve a growth of 5.3%, mainly attributable to the improved sales of formulation product in domestic market. Sharda Cropchem is the only company with dropped sales; the Company is making preparations for the listing. Willowood expressed that their diversified product released in the last 2 years, exploration of market and cultivation of large number of retailers or direct distributors are reasons for the Company’s sales growth. The No.18 ranking Heranba Industry achieved a growth of 30%, the reasons being its successful marketing strategy and the priority to make supply of high-quality product to premium customers, said by the Company. Atul Ltd achieved sales of INR 4.30 billion, saying that domestic sales increased significantly by 40% but the export which accounts for 55% of the total sales of the Company dropped by 3%. The No.20 ranking Meghmani Organics achieved sales of INR 4.0 billion; the increased sales volume and relocation of several factories were contributive to the sales growth of the Company; the Company’s export and domestic sales respectively increased by 18.4% and 12.2%。