As cotton saturates, Kaveri Seed sees richer harvest in other crops

Telangana-based Kaveri Seed Company Limited expects its business mix to change going forward.

 

Against the present 55:45 mix of cotton versus other seeds, over the next couple of years, rice and vegetable seeds will account for about 60 per cent and cotton 40 per cent.

 

In the ₹15,000-crore organised hybrid seed market, the company commands 8-10 per cent of the business.

 

Interacting with media here, GV Bhaskar Rao, Chairman and Managing Director, said, “We believe that the cotton seed market has reached some sort of a saturation point where we have a major market share. In order to further consolidate our business, we expect to expand our business in non-cotton areas. These include rice and vegetables, which provide huge opportunities to grow and expand.”

 

Set up nearly a decade ago, the company has has been growing at a compounded annual growth rate of over 20 per cent. Given the growing focus on improving yields, the company believes that the rice, maize and vegetables seeds business will get bigger. The company’s focus is on growing hot pepper (chillies), tomato, brinjal, among a host of others.

 

Cash reserves

The company, which has cash strong cash flows, has reserves of about ₹389 crore. It is cautious about investing in acquisitions as it has already set up infrastructure which will sustain it for some more years.

 

Kaveri, which has more than 65,000 acres under seed production and its won warehouses and packaging facilities, has a dealer network of over 35,000. C Mithun Chand, Executive Director, said that while most of the company’s revenue is generated from domestic sales, 2.5-3 per cent comesfrom exports to Bangladesh and South-East Asia. It expects to ship to African markets also.

 

Bhaskar Rao said, “We are a farmers’ company and they always look at monsoons in a positive manner and hope it would be good. Therefore, we expect sowing to be normal but yield will depend on the monsoons.”

 

Referring to curbs on cotton seed sale in AP, he said it has been lifted.