R&D And Biotech Fuel India’s Ag Revolution

Avatar for Matt Hopkins By Andrea Klosterman Harris|17 December 2008

If there’s room for agrochemical growth anywhere in the world, it’s in India. The country has about 17% of cultivated crop area, and yet it makes up only 3% of global pesticide consumption. As much as 80% of India’s cropland — consisting mostly of smaller farms ­— is not regularly treated with agrochemicals. Rising income levels and increased consumption in the country offer attractive opportunities for agrochemicals; and, with cropland expanding and more growers taking on the most modern crop protection tools and biotech seeds, India is growing as an agrochemical market — as well as one of the world’s largest agrochemical suppliers.

R&D Fuels Ag

India’s ag market is valued at over US $197 billion, and investors like Bayer CropScience AG are taking notice. Bayer plans to expand its bioscience and plant biotechnology research facility in Hyderabad — already one of its largest globally — as well as set up another seed and plant biotechnology development facility in Hyderabad, and modernize its manufacturing unit in Vapi and Ankaleshwar in Gujarat. Bayer AG has also applied to register in India most of the 10 crop protection compounds that it expects to launch worldwide by 2012.

DuPont India recently opened the first research facility at the DuPont Knowledge Center (DKC) in Hyderabad. The Biotech Research Center — DuPont’s first integrated agriculture and industrial biotechnology research center for DuPont outside the US — will focus on bringing new crop genetics to the market faster, as well as biofuels and biomaterials for global markets. The DKC’s other research facilities will be added in phases; the complete DuPont Knowledge Center — which will employ an estimated total of 600 scientists and engineers across all disciplines once it is fully functional — is expected to be formally inaugurated by the end of 2008.

DuPont considers the DKC very important to its global R&D and innovation strategy, particularly in the new scientific disciplines of biotechnology, bioengineering, bioinformatics, nanotechnology, and other emerging sciences. Balvinder Kalsi, President and CEO, DuPont India, said: “I expect the DuPont Knowledge Center to be a global Center of Excellence for DuPont.”

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Raw Material Shortages

From May to August of this year, India suffered from a raw material shortage. Heranba Industries Ltd.’s Zenobia Shettigar said that the company lost as much as 40% of its business during that time. However, she adds, “The question of a raw material shortage is no longer valid, as currently all raw materials are plentifully available either within India or China at much reduced prices. So, the problem has ended for the time being.”

Great Expectations

According to Meghmani Organics, Ltd., “The Indian agriculture industry is on the brink of a revolution that will modernize the entire food chain, as the total food production in India is likely to double in the next ten years. This throws up tremendous opportunities in all areas, including crops, introduction of new agrochemical products, and also expanding geographical boundaries by way of exports,” says Meghmani. “Agriculture in Africa today is where Indian agriculture was a decade ago, and represents vast opportunities for the Indian agrochemical industry.”

Spotlight: Sulphur Mills

Established in the early 1970s, Sulphur Mills Limited has manufacturing capacity of over 15,000 metric tons for WDG’s and over 8 million liters of suspension concentrates. The company has steadily increased its market share in India with new formulations; today, the company is the largest manufacturer of Sulphur 80 WDG in Asia through its brand COSAVET DF. In the past year, Sulphur Mills introduced FERTIS, a sulphur-based speciality WDG fertilizer with intellectual product and process protection. The company is expected to increase its sales over 40% this financial year, with growth coming from its specialty fungicide, insecticide, and fertilizer formulations. 

Looking Forward

“The Indian and the global agchem industry have gone through a crisis of price inflation due to increases in raw material and intermediate prices, because of the increasing cost of production due to cost inflation for phosphorous, sulphur based products, and indirectly due to shortages of other auxillaries,” says Bimal D. Shah. “The inflation seems to be controlled, and we see some correction in the prices by 2009, but not to the level seen earlier. However, certain families of actives and intermediates will remain in shortage and with inflated prices, due to reduced capacities caused by the shut down of their respective production in some European and Asian countries. Further, due to the delay in the monsoon, there was a delayed start to the Indian season this year.”

Sulphur Mills, says Shah, is constantly working towards new delivery systems. With its recent introduction of FERTIS, the company looks to increase its presence in the specialty low dosage fertilizer and nutrient segment. Sulphur Mills is also involved in new formulation development and plans to introduce more strategic formulations into the global market. Growth of the company is still seen through generic products, due to their volumes.

Shah believes increases will come for Indian manufacturers due to recent inflation in costs of production in other Asian economies, and further increase in labor and production in the Western world. “This will give additional opportunity to Indian and Asian manufacturers and expand India’s base as a manufacturing hub,” he says.

Shettigar is less definite about the 2009 Indian market scene: “It is very difficult to predict, as India’s agriculture season predominantly is dependent on the monsoon.

Other industry leaders in the country are also temperate about next season. “The Indian industry is expanding on a moderate scale,” says one source. Finding more acreage for cultivation should prove to be difficult in the future, so stress will fall on maximum output per acre. As the Indian population grows, however, agrochemical products will remain important.

As for exports, according to Shettigar, 2009 “look[s] a little dull, since in many places like China, the season has not been good due to no pest attacks — and distributors are carrying lot of pipeline stocks, so until these are liquidated, they will not buy.”

She adds that overseas buyers generally “look to India to buy all the synthetic pyrethroids like cypermethrin, deltamethrin, permethrin, and alphacypermethrin, because for these products, India is not only price comeptitive but also the quality is very good.” Shettigar says that buyers also like to source products such as mancozeb and chlorpyrifos from India.

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