Capitalizing on India’s Herbicide Boom
11 October 2013 
The Indian herbicide market is experiencing a growth spurt of epic proportions. With manufacturing facilities popping up across the country and consumption soaring on operations of all sizes, companies are reorganizing to take advantage of the growth opportunity.
According to the Federation of Indian Chambers of Commerce and Industry (FICCI), the nation currently consumes approximately .58 kilogram per cubic meter of agrochemicals per hectare compared to the United States’ 7 and Japan’s 10.8. The Indian Journal of Ecology reports that the low usage amounted to about 17.5% yield loss in 2012, which means estimated food grain production could jump almost $14.5 billion if crop protection products are appropriately utilized. The bottom line is: Everyone, from the manufacturer to the end user and the economy as a whole stands to benefit from the world’s most widely used agrochemical product, herbicides.
This realization has created a 35% increase in 2012 in the Indian herbicide market, which accounts for 16% the total crop protection market domestically. Apart from the notice of potential profit gains, the availability of labor for hand weeding was impacted greatly beginning in 2005 with the National Rural Employment Guarantee Act (MGNREGA). The legislation, which is essentially a legal guarantee of 100 days of pay per year for unskilled Indian workers, has caused a three-fold increase in labor costs (from $.88 a day to $2.95). The legislation forced farmers to raise wages to compete with the government’s unemployment pay and the added cost has made it difficult for growers to employ sufficient hand labor to keep their fields clear of weeds, making herbicides became the most logical alternative.
Prem Sagar Sharma, president of Shivalik Agro Chemicals says he has also noticed the younger generation losing interest in farm work due to the profitability of more urban businesses like factories and civil construction work. In addition, he says the increased profitability of operations has given growers the ability to modernize and mechanize their operations. “I am sure the time is not too far away when small growers and even kitchen farmers growing solely for their family’s use will be employing herbicides in lieu of manual labor.”
Regardless of the reason, the crop input industry is benefiting greatly from the rapidly growing herbicide sector. Elizabeth Shrivastava, executive director of Aimco Pesticides Ltd, explains the payoff saying, “As most of the costs associated with farming have gone up substantially, demand for economical but effective formulations has increased. Return on investment is the most important yard stick for the users.” In order to capitalize on the new input necessity, many Indian pesticide businesses are adjusting their portfolios accordingly.
Indofil, which is traditionally a fungicide-focused company, has realigned its portfolio to offer a wider selection of herbicide products. Dr. H V S Chauhan, executive vice president, Agro Business Division, says, “We have introduced new products for major crops such as soybeans, onion, garlic, wheat, cotton, rice, and others. This has helped us grow our share of the herbicide market. It has also helped us to strengthen our footprint in the crop segment.”
Atul Churiwal, managing director of Krishi Rasayan, says his business has done the same. “We have realized the potential for growth and are focusing on herbicides in a big way to take advantage of the rising demand by increasing our capacity and product portfolio. We are also trying to register new sources of technical-grade products to have them more readily available at a competitive price.”
The increased demand, though, has created stiff competition in the industry. FICCI estimates that the highly fragmented market has more than 800 pesticide formulators, while the Agrochemicals Policy Group reports that spurious and substandard products accounted for 40% of the pesticides sold in India in 2012. Sharma explains the issue, saying, “A vendor of not-so-good quality products is getting almost the same price as that of the high-level manufacturer. The problem is that the grower is not as educated as the middleman, so the distributor is making the extra buck.”
With the potential for profit across the board, Shrivastava says she has noticed the government stepping in to monitor pesticides and residues in order to protect the productivity growth in the Indian agriculture industry. Indofil’s Chauhan agrees, explaining that the Central Insecticides Board has made new herbicide registration processes more stringent to encourage more genuine companies in the segment. Furthermore, he says manufacturing and end-use of herbicides is being commissioned by the government to ensure judicial use of the products. These policies have helped Indofil and other legitimate companies come up with new products to improve their stake in the market.
With India’s $3.8 billion crop protection industry experiencing such a noticeable boost from the herbicide sector, Shah predicts: “India is definitely a hub for the agrochemical industry, and shall have greater importance in the coming years.”
New Facilities
Many companies say keeping things domestic will also help with the quality of products getting to the end user, and thus protect fair pricing. In order to encourage more domestic manufacturing, all six companies reported infrastructural investments in the herbicide arena with plans ranging from expansions of existing facilities to completely new manufacturing plants.
Nand Kishore Aggarwal, chairman of Crystal Crop Protection Ltd. says his company other Indian businesses are also making strategic alliances to co-market newer molecules with established market players such as multinationals to reach a wider customer base.
“These companies have experience and knowledge when it comes to the herbicide segment,” he explains. “But Indian companies are now investing in manufacturing capabilities and in strategic R&D to boost their portfolios.”
As far as what end users are looking for in their herbicide purchases, Shrivastava says the emphasis is on new molecules and formulation technologies with user-friendly techniques in addition to a demand for more environmentally friendly products. Shah says Sulphur Mills is focusing on special combinations and new delivery systems in the herbicide arena, while Churiwal notes that Krishi Rasayan has seen a ‘surprising’ new demand for old molecules like atrazine, glyphosate and paraquat. FICCI reports that the three most popular products in the nation are glyphosate, isoproturan and 2,4-D used on rice and wheat.
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