AgroPages recently had the privilege to speak with senior executives from three major Indian CRAMS (Contract Research and Manufacturing Services) companies - PI Industries, Deepak Nitrite and Aarti Industries. These companies are trusted manufacturing partners for global agrochemical giants, providing a range of services from process research and development to large-scale production of intermediates and active ingredients.
We interviewed Mr. Mayank Singhal, Vice Chairperson and Managing Director at PI Industries; Mr. Maulik Mehta, CEO and Executive Director of Deepak Nitrite and Mr. Rajendra V. Gogri, Chairman and Managing Director, Aarti Industries. Through our in-depth discussions, we aimed to understand the unique strengths and value propositions of these CRAMS leaders that make them the partner of choice for agrochemical multinationals.
Here below is the text transcript of the interview with Mr. Mayank Singhal, Vice Chairperson and Managing Director at PI Industries.
Mr. Mayank Singhal, Vice Chairperson and Managing Director at PI Industries
What key capabilities and strengths does your company have that makes you an attractive partner for agrochemical multinationals?
PI Industries’ (″PI″) competitive advantage lies in our technological edge, world-class infrastructure ensuring sustainable operations, and enduring relationships with global innovators/large MNCs.
PI’s key differentiators are its non-conflicting business model and world-class assets comprising:
World-class 15 multipurpose plants for large-scale manufacturing of long-chain/ multiple steps chemicals on a sustainable basis.
World-class R&D facility for early-stage patented molecules, complex chemistries, at Udaipur supported by advanced research and development labs, kilo plants, and pilot plants.
Leading ESG practices recognized by EcoVadis and Corporate Sustainability Assessment and ranking in S&P Global
Can you give examples of some long-term partnerships you have with major agrochemical companies and what you provide for them.
There are many examples……
More than 45 years of relationship with Japanese innovators.
More than 2 decades of relationship with European innovators.
Providing these partners, solutions across the value chain of agri sciences from process research to process scale-up to commercial manufacturing and supplying products for their global needs and also providing marketing and distribution solutions for their newly discovered molecules.
What new technologies or innovations in manufacturing processes have you implemented recently to improve efficiency or reduce costs?
There are numerous examples of new technologies and innovations which helps us constantly improve production efficiencies, the plant throughput and reduce COGS. New technologies implemented recently include operationalization of ″Flow-Chemistry″ and Azide chemistry at a commercial scale. Company has also developed facility for high pressure oxidation involving toxic fluorinated compound and Vapour Phase Fluorination Chemistry synthesis.
You have impressive R&D infrastructure. How does your company invest in R&D to develop improved manufacturing processes for complex molecules?
Company’s R&D spend in FY23 was ₹ 1,859 million i.e. ~3% of FY23 revenue.
We have the only integrated single-site centre that encompasses chemical synthesis to biological evaluation to process development to scale-up, all under one roof.
We have an impressive 11-acre campus housing 800+ employees including 500+ scientists, 185+ PhDs.
In FY23, our R&D team has been involved in over 50 projects encompassing agro-chemistry, electronic chemicals, and product lifecycle management.
How does your company stay on top of the latest regulatory requirements and ensure compliance?
PI has a stellar reputation built painstakingly over the last 76 years and ensures the highest level of corporate governance and meets all the compliance and regulatory requirements.
Conscious oversight is part of a focused organizational culture in PI Industries that has over the years built a culture of trust, transparency, and accountability at all levels. Our corporate governance framework not only
reflects this culture but also enables it with a long-term direction, proactive decision-making processes for strategic investments, and progressive organizational policies for resilient growth. The impact of our robust corporate governance systems can be seen as one of the key elements of PI Industries sustained growth and the confidence shown by our shareholders.
50% of Board are Independent Directors and 25% Women Directors. The Independent Directors play a crucial role in maintaining a balanced approach within the Board. They work equidistantly with the Executive and Non independent Directors, actively engaging in strategic oversight and deliberations concerning various areas, including strategy, performance, risk management, resource allocation, key appointments, and overall
standards of conduct. This equitable involvement ensures a fair and transparent decision-making process, upholding the principles of good corporate governance.
PI is highly ranked on ESG front:
You highlighted good perspectives on growth drivers. How do you plan to leverage opportunities while addressing potential challenges?
Our position in Agchem today is the work of more than 25 years and investments made over this period. We have already now got to a stage where we are commercializing several Agchem products, non-Agchem products including electronic chemicals, imaging chemicals, specialty chemicals etc.
From the long-term perspective, India remains the locus of growth in Chemicals. It is believed that India has achieved ag chem exports worth USD 5.4 bn in FY23, up ~10% Y-o-Y. With policy support for manufacturing in agchem, these exports are expected to more than double in the coming 3 to 4 years. India is already the 4th largest producer of agchem, globally. The Government is considering a PLI scheme for chemicals domestically and that can further accelerate this trend. With policy acting as catalyst, the industry is plugging in gaps in the value chain in order to offer innovators in chemistry as well as customers at the other end, added incentive to expand here.
Even McKinsey & Company in its report of March 2023 has identified India is the next chemicals manufacturing hub and India’s share in the global chemicals sector could triple to 10-12% by 2040, creating an additional USD 700 bn market value. The Specialty Chemicals has the potential to contribute more than USD 20 bn to India’s net exports by 2040, a 10x jump from the current total of USD 2 bn.
In addition, backward integration and establishing building blocks in india and meaningful investments in R&D in India and the govt incentivising will provide further impetus. Biologicals is another area that would grow and create newer opportunities and AgTech, spray technologies, Digital market place, satellite imaging, precision farming, etc. will create many new opportunities specifically for the agri input industry.
Key challenges are going to be around climate change, increasing harsh weather events, high channel inventory in the domestic agchem brands business.
What sustainability and ESG initiatives have you implemented in your operations?
Our continuous efforts towards achieving PI’s 2025 Sustainability Goals, enhanced our focus on renewable energy consumption, reduction in specific
CO₂ missions, and water consumption. Our focus on fostering a positive and inclusive work environment saw us implement comprehensive wellness programs, increase access to mental health resources, and more work-life balance initiatives. These measures have not only increased employee satisfaction and productivity but have also reinforced our commitment to valuing our greatest asset: our people. We continued to foster our community engagement efforts, through diverse programs implemented by PI Foundation. From supporting local education, skill development, agricultural, health, and women empowerment programs to volunteering efforts, we strived to make a meaningful difference in the lives of those around us.
Several initiatives have been implemented in our operations such as waste management where we have improved E-factor of waste generation for several products. Through the installation of RO plant and recycling of wastewater, efforts are being made to make manufacturing sites zero discharge. We also introduced a captive solar power project of capacity 637 KWp. We continuously undertake various initiatives to improve our solvent recovery by more than 10%. Finally, our approach to DEI is based on treating all persons equally. PI has achieved substantial progress towards workforce diversity with a 47% increase in the number of women employees in management positions.
How has the growth of the agrochemical market in India benefited your company, and how are you positioned for further growth?
Our strategy of balancing economic growth and prosperity with sustainability has enabled us to stride ahead responsibly for over 75 years and create value both locally and globally. Our continuous focus on product innovation, technology, and ESG has enabled us to set the foundation for sustainable value creation for our stakeholders.
Over the years PI has built unique business model and portfolio of products. Our Growth is mainly driven by exports underpinned by presence in knowledge space and not generics and commodities.
However PI also has built unique position in the domestic market with robust pipeline of in-licensed products. Some of our most prominent brands including NOMINEE GOLD, AWKIRA, ROKET, OSHEEN, DINOACE, BIOVITA, KEEFUN, and HUMESOL have a long association with the farming community and a high recall value among farmers. The PI brand is trusted by over 3 million farmers. This was achieved by a differentiated GTM approach and Solid reach, channel and farmer loyalty of over 60 years.
This article was initially published in AgroPages' '2023 India Focus' magazine.
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