Nagarjuna Agrichem (NACL), part of the Rs 3,400-crore Nagarjuna group, is making strategic efforts to switch from a contract manufacturing...
Nagarjuna Agrichem (NACL), part of the Rs 3,400-crore Nagarjuna group, is making strategic efforts to switch from a contract manufacturing model to a market-oriented setup. V Vijay Shankar, MD, NACL, in an interaction with BV Mahalakshmi, says the Rs 635-crore company is eyeing a Rs 1,000-crore turnover by next year, with the domestic market contributing 65% of the revenue. Excerpts
What are your plans for the domestic market given the constraints for the industry?
We see 2015-16 as a year of profitability. Despite the many unique constraints faced by us, we have not wavered from the growth path. Domestic sales have been witnessing linear growth. Though 2010-11 saw a 5% dip, the consecutive year saw 32% growth. In FY14, sales went up by 14% and the team met the targets despite supply constraints. In H1 of FY15, the domestic market faced challenges such as a delayed monsoon, lack of supplies and cash crunch in some markets. Subsequently, improved weather conditions prolonged the season.
We are working on introducing new products. We have launched a new advanced water-dispersible granule (WDG) formulation rice herbicide, Sirius. It is imported from Nissan Chemical Industries, Japan, and exclusively distributed in India by us. Early this year, we also launched NIPiT, a nematicide that is a bio-product in wettable powder (WP) formulation. We launched Kadak 10% EC and Dicaught 70% WG in the herbicide category last year, through the co-marketing model. We will continue to launch more exclusive products in India in coming years.
What are your plans for improving the export formulation business?
We are exploring African and Southeast Asian markets. In partnership with Marlarmyiang Company, we launched our own brands — four crop-protection molecules, namely Profex, Nagarjuna Chloro, Nagarjuna Cyper-10 and Pace — in Yangaon and Mandalay in Myanmar. Six more product registrations are in the pipeline. Brand registrations are in the process in Zambia and Ethiopia.
Tell us about your R&D initiatives. What kind of investments are you looking at for developing a product pipeline?
The Shadnagar R&D centre, set up for Rs 25 crore, commercialised a technical and two formulations. There are technicals and formulations ready for commercialisation and new combination formulations are in the field-trial stage.
Our R&D focuses on improving processes and making them cost-effective. Analytical method development is also part of R&D. The department has also received requests from foreign customers to develop processes for new technicals.
Are you well-equipped to manufacture for both domestic as well as export markets?
Despite the 2012 fire accident, all contract manufacturing customers continue to be with us. Block 1 and 4 in Srikakulam resumed production in November 2012, and Block 2 and 3 commenced production in January 2013. Block 6 commenced operations in June 2013 while Block 5, which was affected, resumed operations in March 2014.
A new product was made for a customer in Q1 2014-15. Block 5 accounts for almost 50% capacity of the Srikakulam manufacturing unit. Most recently, Cyclone Hudhud affected the plant’s operations for a few weeks.
Various initiatives have been undertaken during the year for growth at home and in exports. In Ethakota, powder/granule capacity has been enhanced to meet growing requirements. The Ethakota plant posted its highest-ever production of 3,200 million tonne in July. New projects are under way for capacity enhancement and warehousing.