Wipro Technologies will carve out a new agriculture vertical early in the next financial year, aiming to provide IT services to seed, fertiliser, agro chemical, bio pharma and commodity companies. In the backdrop of global food shortages and volatile commodity prices, Wipro sees the segment ? so far unaddressed by the IT industry ? as a multi-billion dollar opportunity for the next decade.
The vertical, expected to be operational by April 1, will be part of the fast-growing Energy Natural Resources and Utilities (ENU) strategic business unit headed by Anand Padmanabhan. In the June quarter, the unit grew 54% over the year-ago period and contributed 12% of Wipro?s overall revenue of Rs 6,405 crore.
CEO TK Kurien is busy sizing up the opportunity and putting up its building blocks. ?The IT opportunity in the agricultural commodity market itself is about $8 billion today and is growing fast,? he told FE. ?Our ENU business unit will become ENAU from the next fiscal year,? he added.
As of now, Wipro does get some business from seed and fertiliser companies, but it is a minuscule amount, the CEO said. Changing market dynamics imply that all these companies will have to grapple with more and more data where Wipro?s analytics services would be able to play a part. The firm is investing in higher value-added services like analytics to differentiate and capitalise on growth opportunities.
?The biggest issue for businesses in agriculture will be increasing price volatility. In developing countries, people are eating more meat. In China 30 years ago, 2.2 kg meat used to be consumed per person every month. That number has risen to 12 kg now. For every kilo of meat consumed, you require six kilos in terms of cereals. Multiply that by the population and you know why you have shortages in specific items on the commodity side and why you have excesses,? Kurien said.
A second trend, he added, is government intervention in commodities. ?Suddenly, sugar prices go up. Governments can ban exports; they are stepping into controlling or buying commodities which can create scarcity and again leads to price volatility,? the CEO noted.
Agriculture companies, therefore, would want to increase yields with better soil analysis and work on new fertilisers. ?With climate change going the way it is, the biggest opportunity will be around food. Food prices are going to go through the roof because the variability in temperature is going to drive either increasing shortages or surpluses in different pockets of the world. From a technology perspective, there is a lot of innovation you can do both on the delivery side and upstream, in terms of data analytics. IT can be used to increase yields and reduce wastage. In biopharma, data analytics is going to become a big game,? Kurien said.
The firm has culled out analytics and data management as a separate service line and has started reporting it from the June quarter. It currently forms 6.4% of the business. Earlier this year, soon after Kurien took over as CEO, the firm restructured to focus on six strategic business units ? Finance Solutions, Manufacturing and High-tech, Media and Telecom, Retail and Transportation, Energy, Natural Resources and Utilities, and Healthcare and Life Sciences.