Krishi Rasayan Assesses Global Crop Protection Market
3 December 2019 Where some companies see challenges, Krishi Rasayan Pvt Ltd sees opportunities. The company’s owner, Atul Churiwal, answers questions from AgriBusiness Global™ magazine that cover a variety of topics that are key to the future success of not just Krishi Rasayan but also for India’s crop protection manufacturing future.
Considering the situation in China (closed factories, trade war, etc.), what can India do to ensure supply through the global market?
Atul Churiwal, Krishi Rasayan
It is a great opportunity for Indian companies to take advantage of the situation in China and also with growing tension in U.S.-China relations. India has built a lot of technical plants the last three years and can fill the vacuum due to lower Chinese production. It needs impetus from the Indian government, like timely refunds of GST (goods and services taxes) and matching export benefits being given by the Chinese government, like higher draw backs and other benefits.
How has your company helped its customers deal with these issues?
Our company is also trying to increase our exports and is aggressively pursuing for registration in many countries. Apart from that, we are looking into offering products that earlier were only made in China. In addition, we are trying to create manufacturing facilities or using toll manufacturers, so we can take advantage of the vacuum created in the market.
How does your company view the current crop protection business situation in India after the recent mergers and acquisitions?
The Indian market is getting very competitive. There is an opportunity created due to the recent M&A (mergers and acquisitions) happening in India. With integration taking a lot of time, there is a gap created, and supply is affected. Also, many companies are decreasing their product profiles, which gives us an opportunity to fill the void created where these merged companies have reduced their product lists.
How would you characterize the Indian domestic booking market for agrochemicals?
The Indian domestic market was passing through a rough time in the last two years due to very poor rainfall. In spite of that, there is no decline in the usage. We are very bullish for the future and we foresee 10% to 15% growth every year on a compounding basis.
What are the chemistry capabilities of Indian companies for crop protection products? How do you expect this to change in the next several years?
Indian companies and Indian chemists have the necessary capabilities to produce any new product or crack any new chemistry. The main issue in India has been the low capacity due to very low domestic demand in the country. However, things are changing now as the Indian agricultural market is growing very fast. Similarly, the world is looking to Indian companies to fulfill their requirements. Hence, we feel that if the local companies can have plants with bigger capacities, they will be well equipped to compete with China.
What are the biggest opportunities for crop protection manufacturers in India right now?
The biggest opportunity for India is to ramp up their intermediates and technical production facilities. Due to the pollution constraints in China, Indian companies should take advantage and go aggressively in the export market. Buyers are also looking for alternatives other than China that Indian companies can take advantage of.
What are the biggest obstacles to success for crop protection manufacturers in India right now?
We believe the biggest obstacles are the insecticide rules, which are old and need a fresh look into. The license particularly for export should be issued fast so that export opportunities are met. Also, products that are required for the domestic market should have a fast-track policy, even it is for import of technical.
How does India view the biologicals products market, and what role does/can your company play in that area?
We believe that future growth will come from the biologicals and biostimulant market. We were also in this market but in a small way. Now understanding the importance of the same, we have tied up with a Spanish firm, Alga Energy, and are setting up facilities in India for manufacturing the products. We are aggressively marketing the same and hope we can be one of the dominant companies for biostimulants in India. We estimate in the next two years at least 20% revenue will come from this segment.
How do you expect the industry to change in the next five to 10 years?
We believe that there will be a lot of consolidation happening in the industry. Currently in India there are a lot of spurious products being sold in the market, and 10% to 15% of the market is being lost due to this. We expect that the Indian companies will clamp down seriously on it. Therefore, in the future only quality products will be there. Also, there will be a lot of biostimulants coming into the market along with nanotechnology, which will take a big chunk of the market.
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