OREANDA-NEWS. Tata Strategic Management Group (TSMG), the largest Indian-owned management consulting firm, today published the 2013 Agrochemical Report as the Knowledge and Strategy partner for FICCI’s Third National Agrochemicals Conclave 2013. The report highlights the current scenario regarding consumption patterns and future growth potential of crop protection industry in India, and showcases the strategic imperatives for its growth.

Publishing of the report is highly relevant as the Government of India is discussing the introduction of new Pesticide Management Bill (first proposed in 2008) to address some of the gaps from previous regulations.

As per the report, Indian crop protection market was estimated at USD 3.8bn in FY12 with exports constituting 50 percent of the market. The market is expected to grow further at CAGR 12-13 percent to reach USD 6.8bn by FY17.

Announcing the findings of 2013 report, Raju Bhinge, CEO, TSMG, said, “This report focuses on the agrochemicals market and highlights the future trends with focus on opportunities and challenges along with strategic imperatives for the industry players. We hope it acts as a guiding light for the players in the crop protection chemical industry in India.”

The industry has shown an inclination towards adoption of Integrated Pest Management (IPM) approaches and use of biopesticides. Biopesticides currently represent only 4.2 percent of the overall pesticide market in India and are expected to grow at 10 percent annually in the coming years.

TSMG analysed that Indian crop protection market is supported by strong growth drivers. Current low consumption of crop protection products in India is at 0.6kg/ha compared to world average of 3kg/ha; this offers immense opportunities for future growth. The sector is also driven by huge opportunity for contract manufacturing and research for Indian players due to large availability of technically skilled talent pool. The industry also has ample opportunities to innovate new products by leveraging large scientific pool available in the country.

Despite the strong growth drivers, the Indian agrochemicals industry faces challenges in terms of low awareness among farmers. With large number of end-users and wide geographic spread, managing availability and in turn distribution costs is a challenge for all the major players. Apart from this, leading industry players believe that the rising sales of spurious pesticides and spiked bio-pesticides pose a major threat to industry growth.

Manish Panchal, practice head of chemicals, added, “Current low consumption of crop protection products in India, 0.6kg/ha, compared to world average of 3kg/ha, offers immense opportunities for future growth. To gain market share, product availability and speed to market would be key to success. To achieve this, companies need to re look at their SCM strategies”.

The special feature as part of the report, titled Strategic Supply Chain Management for Agrochemical Companies, raises vital questions about the effectiveness of current SCM practices in agrochemicals and uncovers innovative ways and new practices from within the industry adopted by a select set of more nimble, progressive companies who are setting new benchmarks in supply chain performance.

TSMG recommends simplified registration norms for pesticides exports and increase scope of regulation to include all types of pesticides (including biopesticides). Regulators should increase their inspection staff to ensure regular checks to contain the growth of spurious products. There is also a need to encourage R&D and ease registration process for development of new molecules. Large MNCs can look at strategic alliances with Indian counterparts to increase their marketing and distribution presence. Smaller Indian companies can look at tie-ups with MNCs to explore opportunities in contract research and manufacturing.

Key highlights of the Agrochemicals 2013 report:

Indian crop protection market estimated at USD 3.8bn in FY12, with exports constituting 50 percent of the market, and expected to reach USD 6.8bn by FY17.

Current low consumption of pesticides in India, 0.6kg/ha compared to world average of 3kg/ha offers significant opportunity for growth.

Biopesticides, which currently account for 4.2 percent of the market are expected to grow at 10 percent pa.

Industry to face challenge from the high sale of spurious / spiked products.

Large availability of technically skilled labour and patent expires in near future to stimulate the contract manufacturing and research in agrochemicals.

Strategic alliances and M&As to be the trend in near future.

Regulations need to be simplified and its scope should include all types of pesticides (including biopesticides).

Effective supply chain management to become a key success factors for the industry players.