Mayank Singhal, Vice Chairman & Managing Director, PI Industries Limited shared his views on global trends on crop protection chemicals, R&D plans, production capacity, key milestones, company’s performance, Capex plans, CSR activities, outlook and much more. Excerpts of the interview:
What are the global trends in the Crop Protection Chemicals industry in 2021 and how will this impact India?
This year we expect the global crop protection chemicals industry to grow at 2-3 per cent. LATAM and Asia markets will be the growth regions and the same will be the case in India. COVID-19 may have distorted the global supply chains but overall there is minimal impact. Stringent regulations causing some products to go off the market and diversification of the global supply chain will be the major trend.
How do you look at R&D Services, CSM Services and Distribution Services concerning Crop Protection Chemicals?
Although historically there has been a limited opportunity in R&D services, this has considerably changed. Global majors find space (Field trials, toxicology studies, etc.) to outsource to Indian CROs and we expect this will grow. Growth in CSM Services is a major success story and for PI in particular. Major factors including geopolitical tensions, cost advantage, respect for IP, and accumulated expertise will make select Indian players continue to grow in this space, provided safety and sustainable practices are stringently followed.
With a large Indian agriculture space and a limited number of registered agro chem products, we see plenty of opportunity in distribution services in India. COVID-19 accelerated the move to online marketing and reaching out to farmers directly but there is still a long way to go.
What is the company’s production capacity? How is it spread across the world? How do you plan to increase the market share?
Overall, we have 15 multi-purpose plants across various locations in West India. We have invested in Capex over the years and continue to invest to meet the growing demand from customers. Domestically, PI operates in a limited set of products and enjoys a significant market share and leadership position in those products. PI also figures amongst the top 5 players globally in the agro chem CSM space, particularly in the early stage molecules.
Please take us through key R&D initiatives in 2021?
PI is known for its R&D capabilities across the globe. We continue to make significant investments in our Process R&D and various technologies to cut down costs. This year, we are focusing more on scaling up products through sustainable green initiatives.
Key milestones achieved by PI Industries in FY 2020-21 and what are the plans for FY 2021-22? New products where you are focusing and how will it impact PI Industries?
Key milestones during FY 2020-21 include integrating Isagro with PI thereby maximizing synergies and capacity utilization. We created a differentiated focused strategy on horticulture crops through Jivagro and integrating the manufacturing operations with that of PI’s CSM business. We commissioned four molecules at the Isagro site. We successfully scaled up Awkira, launched Londax powder, and completed recertification audit for ISO 17025 at PNL & JMB and (QMS) IMS audit. We raised Rs. 2,000 crore via QIP route (which generated 6x interest) to pursue inorganic growth opportunities (diversification into adjacencies, including pharma).
For FY 2021-22, we have 5-6 molecules at various stages of development and ready to be commercialized. Another is that MPP to be made ready besides high visibility of sustainable growth. We are actively evaluating pharma assets and continue building a strategic roadmap of diversification, leveraging on existing strengths. We are looking at new IP for deepening our technological capabilities, de-risking current operations, and opening up newer opportunities We aim to demerge the B2C business of Isagro to Jivagro and merge Isagro’s manufacturing business with PI CSM.
Company's performance expected in terms of revenue and profit during FY 2020-21 and what is the forecast in FY 2021-22? What are the growth drivers?
For our 9M FY21, our top line has grown by around 35 per cent YoY and PAT has grown by around 61per cent YoY and we expect to exceed our original guidance to grow by around 20 per cent on a YoY basis. For FY 21-22, while our business plans are still in the process of finalization, we aim to maintain the growth momentum and achieve PAT growth of around 20 per cent.
The demand for key commercialized molecules remained strong. There has also been an additional contribution from Isagro and robust momentum in PI’s leading brands. We have also managed to have strong control on overhead costs accompanied by healthy collections.
Capex invested in FY 2020-21 and what is the plan for FY 2021-22? What are the plans related to automation and digitisation across all its operational facilities?
In FY20-21, we have invested Capex of more than Rs. 600 crore. In FY21-22, we will continue to invest in new MPP, technologies, and pharmaceuticals.
To give you examples of our digitisation initiatives, during this year, we have deployed sales order applications across all zones, allowing mobile and web-based order placement by sales force and channel partners. The automated Fleet Management of Application Spraying services and ARIBA sourcing platform are being planned as well.
How is the company striking a balance between environment-friendly policies and sustainable growth? Are key CSR initiatives being undertaken by the company?
With a firm conviction in the business case of sustainable development, we have been steadily imbibing it with increasing investments in social and environmental aspects. We undertake various initiatives on clean technology, energy efficiency, renewable energy, and water conservation to address global environmental issues such as climate change and global warming. Our manufacturing facilities are also equipped with the amenities that help recover, recycle and preserve and reduce water consumption, which in turn, contribute to our Green Initiatives.
Empowering local communities is the foremost constituent of PI’s sustainability policy. The company has been bestowed with various prestigious awards for its manufacturing excellence and corporate social responsibility (CSR) from time to time. Our efforts at water conservation through community programs won us CII’s National Award for Excellence in Water Management 2020.
Our CSR strategy consists of the integrated and all-around development of the communities in which we operate. Over the years we have worked on propagated Direct Seeded Rice (DSR) technology amongst rice farmers; mobile Healthcare Vans around our plant location, facilitated through PI’s Swasthya Seva initiative and Blood Bank services; PI’s women empowerment programs; PI’s learning enhancement programs for providing quality education to school children; and 1,800+ youth gained employment post completion of, free of cost, employability linked skill training and market initiatives at our skill development centre in Bharuch.
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