Indofil Goes Big With Mancozeb in Europe
17 April 2012 Indofil is no stranger to Dithane. The company had exclusive rights to the brand in India for 40 years under Rohm and Haas. Its latest move shows the crop protection world just how serious they are about creating a company that has staying power with the purchase of an established brand with leading market share and excellent identity with customers.
Indofil secured an overwhelming share of the mancozeb market in Europe when it bought Dithane from Dow AgroSciences in March, including exclusive rights to use the patented NT technology and related trademarks in Europe. Sources say it will control an overwhelming majority of the market, depending on the cropping season. The deal elevates Indofil’s revenue to a projected $265 million, compared to $210 in 2011.
“Expansion overseas, especially in the EU, has been a priority for Indofil. We believe this acquisition is highly strategic for us. Dithane will complement our existing portfolio in Europe and will deepen our presence further in Mancozeb variants,” Indofil Industries CEO R.K. Malhotra told Farm Chemicals International. “As we consolidate the business, we will continuously look out for opportunities to deliver further quality and value to our customers.”
Dow will still have a very close connection to the brand. Not only is their name on the package, they also will help shepherd the product through its 2016 re-registrations with their technical expertise. Dow will also remain distributors in a few countries to ensure customer demands are satisfied.
“This makes us number one in Europe not only in market share, but also because of the data, defense of technology and the label,” Malhotra says.
The move makes sense for Indofil, which has had aspirations to expand its mancozeb and combinations portfolio for quite some time. In a 2007 interview with FCI, the company made clear its desire to grow its mancozeb business around the world and to develop distribution channels in various countries for it and a spectrum of other products. The Dow deal gives Indofil about 20 existing contracts with distributors.
Indofil currently has about 50,000 tons of capacity for ethylenebisdithiocarbamates (mancozeb, maneb and metiram). That capacity likely will increase now that Dithane will be produced in India. Indofil will also have access to more carbon disulphide (CS2), the main raw material for manufacturing mancozeb. The company established a new partnership with Shanghai Baijin Chemical Group to build a $40 million CS2 plant in India. The joint venture, IndoBaijin Chemicals, is expected to begin production of CS2 in 2013.
Indofil is part of KK Modi Group, named after the conglomerate’s chairman, Kishan Kumar Modi, the noted industrialist and entrepreneur. He gave his blessing on the deal in a March 27 interview with the Economic Times of India, saying that owning a brand like Dithane offers more depth to their business, and the goal is to make two or three deals like this in the next few years. A special division was established at Indofil to scout for new deals of this nature. The acquisition team already has a staff of five and is looking to hire additional people. Its key targets are:
1) Purchasing a cereal fungicide to complement its fungicides products.
2) Broadening its product portfolio with the addition of herbicides and insecticides to complement its offering of mancozeb, cymoxanil and myclobutanil in Europe and other growth markets.
The Dithane deal along with the acquisition strategy could be a harbinger of things to come for other post-patent agrochemical producers. As global competition intensifies, it is clear that companies with a clear brand-management strategy will have staying power in developed and emerging markets alike.
Get The Newsletter Today!
