There will be at least 30 companies in India that will cross the $1 bn revenue mark in the next seven years.
Globally compliant regulatory framework is necessary for turning India into an agrochemical hub, stresses Dr. Kalyan Goswami, Director General, Agro Chem Federation of India who isn’t satisfied with the way Pesticides Management Bill 2020 has been drafted.
Dr. Goswami said, “PMB 2020, under discussion currently, needs to fix a few issues so as to distinguish itself from the existing Insecticide Act. The transparency and efficiency in the functioning of the registration committee is paramount to the registration of new chemical molecules. However, despite the Standing Commission’s recommendation in 2008 on registration of chemical applications to be dealt within one year, it hasn't been reflected in the bill as there is no fixed timeline for the registration. It doesn't talk about sorting lakhs of ghost registrations happening. The bill doesn't have anything on bringing the newer and better chemicals. The bill doesn't talk about the regulatory data protection which doesn't augur well with the companies that are making huge investments into R&D. Misuse of power by inspectors has not been addressed in the bill. Again, there has to be defined criteria or standard for testing of chemicals. If this continues then how can the farmers expect the quality crop protection chemicals? Industry associations have strongly recommended to the 11th Standing Committee to address the shortcomings of the previous bill.”
Leading stalwarts of the industry spoke at the E-conference on "Agrochemicals: The Next Growth Enabler for the Indian Chemical Industry" organized by Indian Chemical News (ICN) on August 27, 2021. The event was supported by Agilent Technologies. The E-conference was moderated by Pravin Prashant, Editor, Indian Chemical News.
Prashant Hedge, CEO - Agchem Brands, Pl Industries said, “Indian crop protection industry is one of the largest in size with a revenue of over Rs. 40,000 crore, divided equally between domestic consumption and exports. But in spite of its huge size, the agrochemical consumption is meagre 0.6 kg per hectare as against 13 kg in China and 9-10 kg in the US. It is significantly lower to global standards. One of the reasons for low yield is perhaps attributed to inadequate crop protection measures. Besides the export of agrochemicals, the domestic consumption too can be increased in India if the right strategies are employed and new technologies are adopted. The role of the agrochemical industry in achieving the US $5 trillion economy can't be undermined as it rightly increases food security and agricultural production besides providing impetus to service sectors. The government interventions like improving chemical testing infrastructure and improving sampling processes will boost the growth."
Sanjay Vats, Vice President, Marketing, Insecticides (India) Limited, said, "Just 20 years back nobody was talking about R&D but things have improved in the last nine years as the top companies have started investing heavily into research. The companies have rightly invested in process development of off-patented molecules. There are many examples where processes have been improved for chemical molecules, resulting in the increase in yield and purity. It finally led to a decrease in the cost. Another area where Indian companies are jointly working are combination products as we saw a lot many products such as fungicides getting launched in the market. Third area is backward integration for intermediates that were being heavily imported from China."
"The two important intermediates such as CCMP and MIA are now being manufactured here and it has reduced the import dependency. The development of safer formulations is also on the agenda of industry. Now foreign partners are available for partnerships to develop new molecules in India due to availability of technology, affordable and low cost labour. Industry needs government support on infrastructure and the regulatory system to take it forward," added Vats.
Viswanathan Rajendran, Partner, Kearney India, said, "This is a golden era for the chemical industry in India with improved market valuation, and global traction. In the agrochemical industry, we have seen India genuinely emerging as an alternative to China. Since there have been a series of crackdowns on the chemical industries operating in China due to environmental non-compliances, a lot of the MNCs decided to diversify their presence into other locations such as India. When you look at specialty chemicals in particular, India is one of the most viable substitutes to what China can offer today. While in sectors such as manufacturing and assembling, South America, Eastern Europe, Malaysia and Vietnam are the competitors, in agrochemicals India has an edge due to a large pool of chemical engineers, cost effectiveness and portfolio of companies that are ready for the next scale right now. As per our analysis, in the next seven years, there will be at least 30 companies in India that will cross the US $1 billion revenue mark. That will change the face of the chemical industry in India and a lot of action will be in agrochemicals. There is also an opportunity worth US $5 billion in agrochemical contract manufacturing.”
Raju Kapoor, Director, Corporate Affairs, FMC Corporation, said, “Among the mega trends driving the agriculture industry, there has been a strong growth in horticulture industry that now has overtaken food production. It is one segment that due to the sensitive nature of produce requires significant crop protection chemicals. The commercial crops all over are becoming viable for the farmers. Also, there is a lot of money being pumped by the government as the Rs. 1 lakh crore infrastructure fund will essentially go into processing. The enhanced processing will lead to shifts in crops with farmers moving from paddy and wheat to more value added crops. That will drive the demand further. Also, the climate change that will make the invasive pests more regular and thus lead to demand for agrochemicals. Other more important factors such as increasing commodity prices, lower productivity rates, dwindling land size, integration of farmers through FPOs which will drive the need for crop protection. The geo-political realignment involving China will turn the global attention towards Indian capabilities to produce good quality agrochemicals.”
Simon Wiebusch, COO - Crop Science Division, Bayer - India, Bangladesh & Sri Lanka, said, "Indian agriculture is evolving and Covid-19 pandemic has further accelerated this evolution. The developments are much broader and long-lasting, ensuring that Indian agriculture will witness a lot of new changes. With growing awareness, most farmers will prefer quality and with the government focus on FPO's, we can observe mechanisation processes with new machines and even drones for pest management. Only a sustainable farmer can increase the quality of products. The questions such as how has the mango grown or whether the rice is carbon efficient will drive the farmers to do better. Collective agronomic practices, documentation of traceability and use of digital tools as well as processing applications will be the key. Indian agriculture will collectivize, digitize and it will become increasingly sustainable. We are striving to help the Indian farmers to navigate through the changes.
Raghavan Sampathkumar, Chief Manager, Corporate Affairs & Communications, Indofil Industries Limited, said, “The future growth of the agrochemical industry is aligned with evolving policies and regulations. We are looking at the US $5 billion target but the question is whether the industry is getting the right support. The good thing happening is that the intent from the government is clear. Make in India, Atmanirbhar Bharat and PLI scheme are conducive and these will propel us towards the next phase. We may not replace China but we can certainly tap a lot of opportunities. There are pitfalls if the policies are not made on science but propaganda. Therefore, these have to be framed in an inclusive manner. While we are getting emails from departments asking for feedback, India needs to accelerate its pace. At the moment a lot of consultations are happening with the concerned ministry and hopefully the momentum will continue.”
Speaking about the technology solutions offered, Dr. Manoj Surwade, Sale Development Manager - Chemical & Energy Market, Agilent Technologies said, “We have been continuously developing innovative applications to check the authenticity of pesticides. As the chemical industry is looking at increasing their R&D capabilities in the near future, we are well prepared with our chromatography solutions to drive the growth. As a part of our efforts, we are also open for joint ventures with industry to develop the customized technology solutions. On the financial side, we are also offering technology on a rental basis for smaller labs in the SME sector with lower Capex.”
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