Interview with Dhanuka Agritech: Pesticides demand likely to rise 40% this year on good monsoon

Changing weather conditions are resulting in changing crop patterns, putting an added pressure on demand for better seeds and pesticides. In an interaction with FEs Shishir Behera, RG Agarwal, group chairman of BSE-listed Dhanuka Agritech, the agriculture business arm of Dhanuka Group, talks about the companys expansion plans, current industry trends and plans for a follow-on public offer to fund its expansion plans. Excerpts:

What is your expectation from this fiscal (2010-2011) and how much revenue you are expecting?

Last year, the companys overall turnover was Rs 445 crore. We are expecting a rise of 20% this year because of good monsoon and a rise in acreage of crops. Our turnover this year (2010-2011) may reach some where around Rs 550 crore.

What is your expansion plan for this financial year?

We have established four modern manufacturing facilities at Gurgaon and Sohna in Haryana, Sanand in Gujarat and Udhampur in Jammu & Kashmir. Recently, we acquired 15 acre in Sanand to expand our capacity in research and development.

This will be completed by 2011 and once it is fully operational, our production will be doubled. Currently, we only have internal funding, but in future, we may consider a follow-on-public offer.

Which are the major pesticides that are used in India?

There are three types of pesticides — insecticides, weedicides and fungicides -- which are used worldwide. Though weedicides are widely used globally, insecticides are more prevalent in India. However, this trend is changing. In the last seven-eight years, the use of weedicides has increased from 12% to 40%.

How can we ensure the balanced use of pesticides?

With the development of new technologies in agriculture, which are aimed at boosting production, the use of pesticides is increasing. Farmers are also demanding weedicides, since they are safe and do not affect the environment much. Also, weedicides are required in smaller quantities. While around 500 gm of weedicides per acre was needed earlier, with new technologies, one now requires just 8 gm.

What are the prospects of new crop-protection chemicals like weedicides and fungicides in India?

Looking at the current scenario of demand for foodgrain, weedicides are set to see multi-fold growth in India. Earlier, weeding was done manually. But labour being scarce these days, the use of weedicides is on the rise. According to ICAR, Jabalpur, we lose around 30-40% crops in the fields because of weeds every year. In order to increase food production, the use of these chemical is essential these days.

Fungicides are primarily used to control diseases. With the introduction of new hybrid seeds, the number of diseases is also increasing and this, in turn, has resulted in higher sales of fungicides.

In the last five years, the use of fungicides has increased from 8% to 16%. We have introduced two types of fungicides from Japan---Validamice and Chacucamice---and both are seeing a good response.

What is the growth rate of the Indian crop-protection chemical industry?

We had seen good demand last year and the growth was recorded at 20%. After the IMDs prediction of a good monsoon this year, agriculture minister Sharad Pawar expects a record production of wheat and paddy. Also, with the governments emphasis on agriculture in eastern regions, we expect sales to grow at around 30-40% this year.

Source: The financial express