PMFAI to take on competition with modernisation

Vijay Trivedi in Mumbai

PESTICIDE industry represented by Rs 3,600 crore worth of players claim they are geared-up to meet competition after 2005, when the patent regime becomes applicable. Currently, the industry is said to be relatively stagnant at around five per cent growth rate.

For various reasons, the past four years saw business suffering. During 1999-00, the industry had a negative growth of more than 10 per cent. Despite the setbacks, in the current year the industry expects growth of around 5-10 per cent growth. The forthcoming two-day ‘Third Asia-Pacific Crop Protection’ to be held in New Delhi from September 6 and 7, will focus exclusively on preparing the industry players to meet the emerging competition. This is being organised by Pesticides Manufacturers and Formulators Association of India (PMFAI).

For one, top industry sources say, mergers and acquisitions, joint ventures are likely to begun within the domestic industry during the year ahead. What is more, spot business of around Rs 400 cr too is likely to be transacted at the seminar.

According to PMFAI president Mr Pradeep Dave “There is a strong possibility of several joint ventures, mergers and acquisitions taking place during and after the seminar.” Mr Dave said, APCPC has organised with the clear focus of reorienting domestic players for the post WTO regime. This seminar will also provide a platform for multinational companies, an insight to the dynamics of domestic pesticides market, which can soften their entry into our market. Hence, we have set out ‘Vision 2007’, by which the size of the industry is expected to jump threefold to around Rs 10,000 crore. India is already one of the largest producers of pesticides in South-east Asia and leader amongst producers of generic molecules used in manufacture of pesticides.

One of the major benefits for the industry, as in other segments, is the low labour cost. This, Mr Dave feels, will help the industry to be an important player in the pesticides market Further, PMFAI plans to launch B2B, through its existing website pmfai.org. Mr Dave claims that this would help industry to ‘widen the market’ and bridge the gap to attain our Vision 2007. The existing website will offer a new antidote facility to the end-users. The agro-chemicals business is estimated to be around Rs 3,600 cr, of which exports are estimated at around Rs 1,500 crore and is expected to reach over Rs 1,800 cr in 2001-02. Imports are stagnant at around Rs 180-200 cr.

Mr Dave said, due to timely and sufficient rainfall in various parts of the country, it is expected to touch agro-chemical business over Rs 3,750 cr. “The agrochem industry needs a new product portfolio”, Mr Dave says. These should be aimed at meeting the following areas: Potential for exponential growth in exports of agro produce, processed foods’ need for low residue chemicals and need to increase productivity of land.

According to one leading pesticides player, Indian farmers are still behind in the use of new technology, like water management and drip irrigation, pesticides spraying etc. Pesticides like monocrotophos, endosulphan, metasystox and dimethaote etc. are mainly used by Indian farmers. Though the technology available to Indian farmers, they are not in a position to implement in a correct way due to lack of knowledge of the same. Further, there will be surely growth of various sectors like food processing, agriculture, horticulture, and floriculture increases demand for crop protective chemicals. But, it is over optimistic to touch over Rs 10,000 crore, despite demand in the local market.

He firmly claimed that the industry has witnessed cases of Endosulfan usage, the health problems reportedly affecting the resident of Padre village in Kasargode, Kerala.

However, Mr Dave said, Endosulfan is extensively being used in almost all Indian states for the last 30 years for a variety of crops including wheat, cotton, paddy, tobacco, soyabean, mango, cashew, coffee, tea, sugarcane among other.

The Central Insecticide Board of India (CIB) is the regulatory agency for all pesticides used in the country. The CIB had laid down a stringent regulatory process under which every formulation has to go through around 67 safety regulations, over a minimum period of four years before being granted a registration. The industry claims it is open to scrutiny and keen to assist the Central and state governments with their investigations.

In the APCPC, over 500 delegates representing leading domestic and MNC’s from India and countries from the Asia-Pacific region including China, Singapore, Thailand, South Korea, Malaysia, Australia, New Zealand and UK, Europe, Canada and other countries are expected to attend. The issues that will be covered among others are: Biotechnology, GM crops, sustainable agriculture, recent developments in crop protection, agro- chemical market scenario, future trends in agro business, judicious use of pesticides, environment protection, building up confidence among farmers, consumers, researchers and regulators of the industry by communicating with each other.