Though the Indian pesticide and insecticide industry is fourth largest in the world and the second largest in the Asia-Pacific region only after China, it is still highly unorganised. Around 20% of the domestic pesticide products are spurious. Started in 2002, Insecticides India is now a formidable player in the market. With monsoon just round the corner, FE?s Ankita Rai spoke to Insecticides India managing director Rajesh Aggarwal about his expansion plans, the second quarter outlook and industry scenario in general. Excerpts:

What are your expansion plans for this fiscal?

Currently, we have three operational plants ?? two formulation units in Chopanki (Rajasthan) and Samba (Jammu) and a technical plant in Chopanki (Rajasthan). We are coming up with two new plants, a formulation unit in Udhampur (J&K) and a mega technical synthesis plant in Dahej (Gujarat). We will be investing around 56 crore in these plants. Of which, a major chunk (Rs 55 crore) will go into Dahej plant. The plant is likely to operational by November this year. The Udhampur plant will be operational in the second quarter.

How do you plan to finance such big-ticket expansion?

Expansion will basically be funded through internal accruals and IPO proceedings. We have also taken a short-term loan of Rs 10 crore.

How demand has been during the first quarter? What are your expectations from this fiscal?

The April-May period was not very encouraging. However, we are betting big on the second quarter. Last year, our turnover was Rs 396 crore. We are growing at the rate of 30-35% per annum. We are targeting a top line growth of 40% this fiscal.

Giving the sensitivity of your business to monsoon, how much increase in sales do you expect from June onwards.

The pesticide business is highly seasonal. But so far, forecasts are of a normal monsoon. Monsoon has already reached Southern and eastern regions. We are expecting increase in demand from June onwards.

Can you tell us more about your research and development work?

Currently, we have 35 products in the process of getting registered. We have applied for process patents for three products. We have a registered R&D centre in Gujarat. Our vision is to get international GLP accreditation for Gujarat.

Are you looking at foreign markets as well?

We are looking at the West Asia, southeast Asian countries, South America and Africa as potential markets. In two years, our exports should reach Rs 50 crore from Rs 3-4 crore at present.

How much is spurious pesticide eating into your revenue?

Spurious pesticide is about 20% of the market. There are products called bio pesticides in the market which are basically chemical pesticides and are spurious in nature. There is no law to govern these chemicals. I hope the Pesticide Management Bill 2008 looks into the issue.

How do you see that growth of the pesticide industry in India?

Pesticide is a small industry. It is about $1.2-billion market in India.

Of which, $0.6 billion accounts for exports. The industry is likely to cross the $2-billion mark with in the next three years.