"India has a Great Potential for New Gen Agrochemicals"
Rajesh Aggarwal is Managing Director at Insecticides India Ltd, India’s leading and one of the fastest growing agrochemicals manufacturing companies. Ambitious and determined, he took over the charge as the Managing Director of IIL in 2006 and has successfully taken the company to new heights with its revenue grown manifold. Under his stewardship, IIL went public and got listed in BSE & NSE in 2007. Today IIL, which owns 108 products, has emerged as a formidable player in the Indian agro-chemicals. In an interview with Aamir H Kaki, Desk Editor, Business of Agriculture, he shares his valuable views on the agrochemicals industry in India, the role of R&D and innovations in agrochemicals and about IIL’s key brands and future plans. Excerpts:
How do you see the agri-business scenario in India?
Currently, we can see that there is a huge opportunity in agri-business industry in India especially in agrochemicals as compared to a decade back. The Indian agrochemicals market, which was stood at `4000 crores ($641 mn) in 2000, is currently poised at over `16,000 crore ($2.5 bn). Therefore, we can say that a lot development is going on in the industry.
India is the fourth largest producer of agricultural/food crops but in terms of value it stands at 12th in the world. This shows that there is a gap in between and for that there is a need to work on new generation molecules to enhance the value of the yield/produce. India has a great potential and can add a great value by using new generation agrochemical molecules. By using new generation technology, about 10 percent growth is expected in value-terms of agri-produce.
According to me, there is a huge scope of growth in agrochemical industry in the near future. In the last few years, the farmers’ expenses have increased as the cost of manpower, electricity, fertilisers and other inputs is multiplied. In order to increase the output, investment must also be increased. Thus, we can say, it is a growing industry and has a great potential for growth in the coming years.
Please share the history and ownership of Insecticides India Ltd (IIL).
We have a joint family business. We’re into the family business for the past three generations, having around 150 years of experience. We, me and my father, left our family business in 2001 and started Insecticides India Ltd with 100 percent ownership, which started its operation in 2002. In 2007, we went public with 25 percent odd issues and got listed in BSE & NSE. We have started pesticides formulations at our own manufacturing facilities to meet the demands of farmers and other stakeholders.
With our emphasis on brand building to expand our business, we acquired Montari, which had 21 products. We believe that consumers go for brand image and support good brands, therefore our strategy was to acquire well-known brands whenever possible. In 2010, we acquired Monosil.
But with time, we realised farmers could not afford foreign products as they are very costly. Therefore, we started our own R&D division in 2005 with the purpose to make these products reachable to farmers. Here, with the process of reverse engineering and innovative technology, we try to develop products with less cost by manufacturing ingredients in India and take the finished products to farmers at reasonable prices.
What is unique about IIL when it comes to agro-chemicals/pesticides?
The unique thing about us is that we take product ownership from start to finish. We do everything from R&D to manufacturing of products and from developing to marketing the products. Currently, there is no company doing reverse engineering in the agrochemical sector in India. In addition, we have tie-ups with leading companies in Japan to make new agro formulations for Indian farmers as well as global markets at cost effective rates.
Which are your umbrella brands?
Our strength is our products. With more than 100 products, we manufacture all types of insecticides, weedicides, fungicides for all types of crops and households. Some of our popular brands are: Monosil, Victor, Lithal, Thimat, Nuran, Hijack, Hakama, Pulsor and Xplod. In addition, we have nine other big brands that come for a variety of crops. The most popular is our ‘Tractor’ brand pesticides.
In your opinion, how different is the Indian agro-chemicals/pesticides market as compared to developed countries?
There is big change in the agrochemicals scenario in India as compared to other countries. India is highly general in its approach in using fertilisers and agrochemicals that is 70 percent general and 30 percent new generation. However, in developed countries, there is an equal ratio of 50:50 of general and new generation formulations. India has a tropical climate due to which there is a need to use insecticides and fertilisers. Thus, this leads to increased use of pesticides and fertilisers. However, in other countries, farmers use 60 percent herbicides and 20 percent insecticides.
We can provide new generation technology to farmers for safe usage of insecticides and fertilisers but the different dialects and culture in India make it difficult. However, we can reach slowly to every part of the corner.
R&D is the prime agenda of IIL. Tell us about your R&D initiatives.
There are various R&D processes going on in IIL. We are doing reverse engineering to make available technologically advanced products at reasonable rates to farmers. To achieve our objective to produce technologically advanced products domestically, we are into joint ventures with Japanese companies. For example, where `1000 crores ($160 mn) are required to produce the new generation molecules, we’re producing the same only in `100 crores ($16 mn) with the help of our tie ups with these companies. We are passionate about pushing the boundaries of science to develop agrochemicals for some of the worlds greatest agro challenges.
Please share the future growth plans of your company?
With our dedicated R&D facility, we are inventing innovative agrochemical molecules and this is helping us in growing at a rapid pace. We have six state-of-the-art production plants with world class machines for the formulation of agro chemicals. We are poised to become the country’s largest formulation facilities with a combined 75000 MT formulation capacity per annum. We’re looking forward to grow with a 20-25 percent growth every year. We have even doubled our growth every four year.
Finally, is how your company contributing to the welfare of farmers or society at large?
Our main mission is to make difference through our whole hearted efforts for farmers, their families, our stakeholders and society in general. We have initiated several programmes for the welfare of the farmers and their families. Our R&D strategy is specifically designed to create cost effective agrochemicals for farmers to increase the profitability of the farmers. We also inform farmers about the benefits of adopting new technology in increasing their incomes. It is a regular part of our job to focus on awareness towards the safe and judicious use of agro-chemicals and to inform the farmers about benefit ratio and yield ratio. We have adopted various schemes for the education of the farmers’ children and run scholarship programmes for the meritorious students.