Eight Current and Future Opportunities in India: Interview with Willowood India’s Jitendar Mohan

Renee Targos By Renee Targos|18 August 2022

In India, agriculture is the main source of income for almost 58% of the country’s population. The rising population as well as rising urban and rural incomes, along with export demands, are driving the growth of agriculture sector.

A high proportion of agriculture land and diverse agroclimatic conditions allow India to grow varied and economically important crops. There are several opportunities for the Indian agrochemical industry, which plays an important role in accelerating the growth of the sector. AgriBusiness Global interviewed Jitendar Mohan, Chief Operating Officer, from Willowood India, and here are his Top 8 current and future opportunities for India’s agrochemical industry for 2022 and beyond.

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  1. Investment on Research & Innovation: The focus of the Government of India is on research and innovation in line with Make in India and Atma Nirbhar Bharat initiatives. Government and industry have started investing heavily on research and innovation to develop new generation molecules, new isomers, new manufacturing processes, green chemistry products, and new combination and solo formulations to make India a global hub for manufacture of agrochemical products. They can further join hands under Public–Private Partnership mode for which the government provides funds to boost the R&D environment of the country. These initiatives will also help in tapping the huge scientific and technical human resource pool available within India as well as globally.
  2. Intellectual Property Regime: The intellectual property regime encourages the industry to innovate on technologies and products by providing patent protection for 20 years. This has enabled many companies to invest in R&D activities to develop novel technologies and products and to get the protection both in India and globally through PCT or Paris Convention routes.
  3. Petroleum, Chemicals & Petrochemicals Investment Regions (PCPIR): Government of India has developed many zones in different states of India as PCPIR, with all the required facilities and policy support to promote the manufacturing of various chemicals including agrochemicals, petroleum, and petrochemical products. Industry can utilize these facilities to build and commission plants for manufacture of technical grade products with complete backward integration to reduce import dependence for these products.
  4. CRAMS & CSM Model to Make India Global Manufacturing Hub: The global Contract Research and Manufacturing Services (CRAMS) market is valued at $200 billion as of 2019 out of which India has a share of 6%, which comes to $11.5 billion. India’s CRAMS market is expected to witness a 12% CAGR for the period 2019 to 2024 compared with global CAGR of 10%. The share of agrochemicals in India’s CRAMS market is 35%.

Indian players have penetrated well in the exports space of many specialty chemicals including agrochemicals. Further, due to changing global scenario and strategies, various global multinational companies (MNCs) are looking for various destinations other than China for future growth opportunities in these segments, which augurs well for India as it can penetrate deeper and catch up with China on a global level.

Custom Synthesis and Manufacturing (CSM) is a niche segment within the CRAMS model and deals with patented products that require more R&D efforts. Indian CRAMS/CSM players are going to benefit as more innovators are focusing on their core competencies and outsource production through long-term contracts to low-cost manufacturing destinations such as India. These long-term contracts provide long-term revenue growth visibility as compared to other specialty players.

CSM requires more R&D efforts compared with CRAMS as contract manufacturers produce patented products, wherein each patented product’s manufacturing can be unique requiring unique infrastructure. CSM is more of niche segment within the contract manufacturing space and attracts higher margins than CRAMS of generic molecules.

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With the increasing infrastructure of contract synthesis in India, more foreign players with patented products are expected to manufacture active molecules. As a result, the valuation for CSM or patented businesses is relatively higher, resulting in higher growth potential of custom synthesis and manufacturing services in the contract synthesis sector.

India CSM market was valued at $11.5 billion for 2019 for specialty chemicals and is expected to reach $20.3 billion by 2024 with growth rate of 12% CAGR driven by a) the increasing contract manufacturing trend for fine chemicals and niche specialty chemicals in India; b) global companies preferring investment in contract manufacturing in India; and c) India being a low-cost manufacturing destination with a skilled labor force.

Almost 80% of the Indian specialty CRAMS market is captured by fine chemicals, which are single molecule compounds widely used in the crop protection chemicals and active pharmaceutical ingredient industries. These single molecule compounds are mainly active ingredients in either agrochemical or pharmaceutical formulations. Agrochemical contract manufacturing in India accounts for a 35% market share with predominantly export-led demand.

  1. Production Linked Incentive: In order to promote the manufacture of technical grade pesticides in India, the Government of India is planning to incentivize the sector by offering production linked incentives, which will act as an impetus for the industry to invest in creating infrastructure and develop technologies to manufacture active ingredients in India from the first step itself.
  2. Regulatory Framework: The Government of India is opening up the regulatory framework for agrochemicals in the country, wherein they have framed the policy, rules and regulations for applications of pesticides by drones. The government has also started to focus a fast-track registration of new crop protection molecules in the country and are working on the modalities for the same.
  3. Policy Interventions for Foreign Investments: The various industry-focused policies of the Government of India have enabled foreign companies to start investing in India by way of either opening their own companies in India or collaborating with Indian companies to establish joint venture companies. This opens another window for the bringing of new technologies/new products in India for the benefit of Indian agriculture and farmers.
  4. Technology Interventions: Both government and industry are working on providing tools on digital platforms to disseminate information to farmers for weather conditions, rainfall, etc. to help them to plan properly for next farming season, and to have proper information on the adequate use of agriculture inputs, training, etc. so that food productivity of the country can be maintained.

Willowood recently opened a multi-million dollar technical plant in Dahej, India. Read about the project here.

Renee Targos, as Editor of AgriBusiness GlobalTM Direct magazine, leads in content development, event programming, and managing the ABG Board of Advisors and strategic growth of the magazine. Renee’s professional experience covers more than two decades of national and international digital and print content development, editing, and journalism. She received a bachelor’s degree from Southern Illinois University and continued her education with master’s level courses in business administration and behavioral analysis. Renee has served as a board member for several Arizona-based non-profits and government commissions. See all author stories here.

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