UPL Business India Article

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BUsi n e ss i n di a u the m aga zi n e of the cor por ate wor LdCover Feature

conquering the globe

Having acquired scale and geographical spread, UPL is

increasingly focussing on profit margins and generating free cash

Rajnikant D. Shroff chairman, upl group

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BUsi n e ss i n di a u the m aga zi n e of the cor por ate wor Ld Cover Feature

in the early 1990s, post liberal-isation, many indian compa-nies across various industries like steel, automobiles, pharma, etc, with an appetite for growth

moved to the global platform with the hope of becoming multinational companies (mncs). few have tasted success. one company that managed to do so is upl Ltd (formerly United phosphorous) which, as opposed to indian producers mainly acting as contract manufacturers for western players, has adopted an aggressive business model.

Led by 80-year-old rajnikant (rajju) d. shroff, upl embarked on globalisation in 1994. since then, as chairman of the upl group, rajju has not looked back. he believes that rural prosperity can be brought about by training farmers to adopt better agricultural processes, using high yielding seeds and appropriate appli-cation of fertilisers and pesticides. an advocater of the philosophy ‘local roots – global pursuits’, he has grown upl from a mere specialty chemicals player focussed on the domestic mar-ket to moving up and occupying an international seat, as one of the top five worldwide producers of generic crop protection chemicals (see chart: generic companies).

to be precise, as a serial acquirer in the last two decades, beginning with the first inorganic growth opportu-nity in 1994, rajju has lapped up over

40 targets in 20 years. in the process, upl has forward integrated to all key parts of the value chain, acquired a number of off-patent product lines and directly entered markets in europe, the Us and Latin america. “the inorganic route has been our key element of growth. we have used our local base of intellectual talent to penetrate global markets,” explains rajju, who founded upl in 1969 to produce phosphorus and its deriv-atives. this has seen the company grow from $55 million (`215 crore) in sales in 1994 to close to $1.91 bil-lion (`10,580 crore) in 2014, at a com-pounded annual growth rate (cagr) of 22 per cent.

“success has not been easy. we have taken our low cost manufactur-ing base in india, and added it onto the front end – product registration, marketing and distribution. these are the key components needed to take the products directly to end user markets. what would have otherwise taken us more than a decade (if we adopted an organic entry into new markets) we achieved in a short span of time, through timely acquisition,” explains Jai shroff, the 49-year-old ceo of the company since 1997 and rajju’s eldest son. Jai, always on the move, is actively involved in build-ing the global businesses of upl, while younger son Vikram, aged 41, looks after the indian operations of the group. the shroffs control 29.81

per cent of upl’s equity, while for-eign institutional investors (fiis) hold 46.77 per cent, mutual funds and insurance companies another 6.80 per cent, while the public holding is 16.62 per cent.

“till the early 1990s, we were india-focussed, mainly developing products for the domestic market. however, we realised that india has a

Jai: building the global platform

Reposo acquisition for entry intoArgentina Advanta acquisition forexposure to seeds business anddiversification- Seeds, the future of Agriculture

1996

1994

2012

2005

2006

2007

1969

Started RedPhosphorus

Acquisition of MTMAgrochemical UK-First international acquisitionfor entry into Europe,Herbicides portfolio

Devrinol acquisition for entryinto US, Japan and ROWmarkets- US Distribution AccessStarted Caustic Chlorine Plant

SWAL acquisition for scale anddistribution in India- ParallelDistribution network in IndiaFirst EMR registered (SAAF)

Acquisition of Cerexagri boosting revenuessignificantly- Global Distribution Network

DVA Agro and SIB acquisitionin Brazil- Entry into Brazil thelargest single country market

Rice Co helped leverage global sales andmarketing network in taking product offeringsto global rice markets- Crop FocusMancozeb Fungicide Business along withmanufacturing and formulation productionfacilities- Segment Diversification

2010

1976

Entry into AgrochemicalsFirst Exports

1980

Started productionof Yellow Phosphorus-Ankleshwar

2014

Stake Sale- SIPCAM UPLIncrease in stake-UPL Brazil (73%)Revenues crossed `10,000 cr

KEY ACQUISITIONS

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JULY 7-20, 2014


competitive cost advantage in manu-facturing while we built global scale manufacturing units for some of our products. this was when we realised the global manufacturing opportu-nity,” says Vikram. during the same time (1990s), the chinese chemi-cal manufacturing boom happened, with expanded activities of state-owned chinese chemical enterprises and exports to india. “i don’t know whether they (chinese) were cheaper in their manufacturing costs, but they seemed less focussed on gener-ating a return on capital and making money,” observes Jai.

the chinese onslaught was an eye opener for the shroffs and upl changed its strategy. Building on its competitive advantage against the chinese in manufacturing, they decided to create a global platform and added distribution and retail, thus tweaking upl’s business model. “we started accessing the farmers ourselves and sold products under our own brand. the reasoning was that if you are in the whole value chain – manufacturing, the regu-latory package, access to the mar-ket and distribution to the farmers, then hopefully you make better profit margins. our first acquisition,

mtm confirmed this strategy. in cer-tain segments of the global busi-ness, we are able to make twice the net margins we make in the home market,” says Jai, who then decided to pursue the global business model and make a string of small and big international acquisitions (see chart: Key acquisitions).

“Before we acquire a company, a team is sent to study the target for six months. after understanding the opportunity and the associated prob-lems, we are in a stronger bargaining position. we don’t borrow but use our cash flow to close the acquisition and then refinance the acquisition after closing the deal,” says a conser-vative rajju, speaking about his first overseas foray when he acquired UK-based mtm agrochemicals, a small organophosphate-insecticides and herbicides maker. “it had good tech-nology but the company was bank-rupt and the md was in jail. i saw this as an opportunity but had a tough time convincing the rbi to release the forex in 1992. finally, they understood the logic. this gave me confidence in acquiring and turn-ing around companies in the Us and Latin america.”

“normally, when we make an

acquisition, we aim to integrate the business, including manufacturing and try to transfer manufacturing to our plants in india to capture the cost advantage. however, we also try and retain maximum people from (par-ticularly the front customer facing end staff) the acquired company as they teach us a lot about their local markets,” adds Jai.

the real big leap for the shroffs came in november 2006, when upl purchased french pesticide maker cerexagri from the chemical group arkema. the same year (february), upl also acquired seeds producer dubai-based advanta from pe fund fox and paine through a financial mix of internal accruals and debt. for upl, advanta added an impor-tant ingredient in the value chain of agricultural inputs.

another big market for upl was Brazil, the fastest growing agri mar-ket in the world. “Brazil has gained importance of late of being recogn-ised as among the largest and fast-est growing agricultural markets replacing Us and eU. upl had expo-sure in every key agricultural market around the world except Brazil,” says a research report by Kolkata-based ashika group that sees Brazil as a key geography to fuel upl’s growth.

Annual revenue ($ million)

*As on 31st March 2014 @ 2012 data. # Latest Annual data.Source: Phillips Mcdougall

Annual revenue ($ million)

M h 2014 @

Rallis*

Amvac#

Chemtura#

Nihon#

Mitsui Ch@

ISK

Sipcam

Cheminova

Arysta

UPL*

Sumitomo

FMC

Nufarm

MAI

GLOBAL GENERIC COMPANIES

2,876

2,297

2,020

2,146

1,501

1,101

514

500

478

451

449

381

306

1,909

Vikram: works on domestic turf

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JULY 7-20, 2014


the big opportunity came in June 2011 when upl acquired a 51 per cent stake in Brazilian firm dva agro do Brasil (dva agro Brazil) from germa-ny’s dva group and other sharehold-ers. dva agro Brazil is engaged in the production and marketing of crop protection products. this was upl’s second such acquisition in Brazil. in march 2011, upl had acquired a 50 per cent stake in sipcam isagro Brazil, a 50:50 joint venture between the sip-cam-oxon group of italy and isagro.

Well reportedin may upl decided to restructure and rationalise the Brazilian operations. “we had two entities, so there were often duplication of costs centres,” says Jai, who has sold one and retains upl’s presence in Brazil through another subsidiary in which it hiked its holding. upl has sold its 50 per cent stake to italian firm sipcam in the Brazilian agrochemical company sipcam upl Brasil sa for $58.80 mil-lion (`351 crore) and made a profit. upl had acquired the stake in 2011 for close to €20 million (around `170 crore) and had invested `30-35 crore more in the company. “the trans-action is completed and will help release funds for new opportunities and meet growing business require-ments. it will also help upl to have a more focussed approach for Brazil.”

“upl sold its sipcam stake as part of a strategy to consolidate its assets (acquired inorganically) in key geographies. the stake sale would release resources and enable the company to focus more on dva

agro Brazil (which has planned for new product launches and reduction in working capital cycle) in which upl holds a controlling 73 per cent stake. from the transaction upl will get a gross consideration of around `351 crore which is nearly double of what the company had paid to acquire the stake in 2011,” states a sharekhan report.

“Brazil outlook: upl has got the highest number of registrations in the country in the last 2-3 years, which it considers a key competitive advan-tage which should help it retain its strong growth momentum,” observes a Quant research report.

“most of upl’s global peers have a light manufacturing base and considerable sourcing from china. with a focus on environment, the cost of doing business in china is increasing. upl’s high backward inte-gration would strengthen its com-petitive positioning,” says a motilal oswal report.

“with extra cash, in the last two years we have implemented two tranches of buybacks and also repaid debt of `786 crore,” explains cfo anand Vora. in december 2012, upl bought back 1.92 crore shares at an average price of `116.67 per share and in January 2014, it purchased 1.40 crore shares at an average price of `202.29 per share. thus it spent around `507 crore in buybacks alone and shored up the promoters, stake from 27.67 per cent to 29.81 per cent.

most of upl’s international com-petitors have entered Brazil much before it, and they have witnessed high growth rates. “we did not jump in early. why? Because we could never find a good fit. Valu-ations were always too high. we think it has become a more mature market in terms of financial, legal, and operating systems and in terms of the scale and state of develop-ment of farming. the government’s focus on agriculture is also differ-ent compared to a decade back. Basi-cally, the regulatory environment has changed and the government realises that farmers need com-petitively priced crop protection – chemicals products,” feels Jai.

FINANCIALS (` crore)

EBITDA

FY14

FY13

FY12

FY11

FY10

FY09

FY08

FY07

FY06

FY05

Net Profit

FY14

FY13

FY12

FY11

FY10

FY09

FY08

FY07

FY06

FY05

Net Worth

FY14

FY13

FY12

FY11

FY10

FY09

FY08

FY07

FY06

FY05

5

Revenues

FY14

FY13

FY12

FY11

FY10

FY09

FY08

FY07

FY06

FY05 1,423

1,802

2,471

3,762

4,973

5,495

5,898

7,764

9,294

10,902

356

136

793

490

201

1,277

588

261

1,500

737

257

2,244

987

456

2,682

1,033

526

3,006

1,207

558

3,744

1,476

555

4,423

1,762

775

4,879

2,151

950

5,419

SHARE PRICE

139

343

1 Jul 2013 – 3 Jul 2014

3

(`)

100

150

200

250

300

350

00000000

1313131313333333333999999999999999999

334444444444443333333333

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JULY 7-20, 2014


the sale and restructuring of the Brazilian operations by upl has gone down well with the stock market. and this is one of the reasons for the scrip doing well. over the last year the share price has more than dou-bled from `121 (august 2013) to `343 (July 2014).

“upl has outperformed the bse sensex by 56 per cent over the last year. we continue to remain posi-tive on upl and reiterate our ‘Buy’ rating premised on the expected launch of new r&d-driven products and the geo-graphical extension of existing products driving 11 per cent cagr in revenue and 18 per cent cagr in eps over fY14-16e, strong operating lever-age and cost saving initiatives driving ebitda margin expan-sion and inexpensive valua-tion at fY15 p/e of 8.7 times as against the last three-year range of 5.6-12.4 times,” states an equity report by deutsche Bank on the company.

in the last decade alone, with a growing geography and product range being the key pillars of upl’s globalisa-tion strategy, the shroffs have

completely transformed the profile of the company. from 2004 to 2014, upl’s revenue grew by over 10 times from ̀ 1,097 crore to ̀ 10,580 crore), at a cagr of 25 per cent. while the oper-ating profit (ebitda) also kept pace, net profit grew by over 10 times from `86 crore to `949 crore (see: finan-cials). the break-up of upl’s revenues for march 2014, in terms of markets shows that 26 per cent comes from

Latin america (Latam), north amer-ica (20 per cent), india (21 per cent), europe (19 per cent) and rest of the world (14 per cent). in fact 10 years ago, upl was not present in Latam, while today that is the largest con-tributor to upl’s topline.

Focus on brandingin terms of upl’s products, herbicides constitute 28 per cent of the topline in fY14, while insecticides (another 28 per cent), fungicides (25 per cent) and fumigants and others (19 per cent). “our global presence de-risks us from an excessive geographical dependence on a particular area. so we are looking at more geographies. ditto with the range of products which keep increasing,” says Jai. “a focus on branding has given us bet-ter margins,” adds Vora.

upl’s rising numbers over the years has attracted many new pro-fessionals to the group. for instance, sagar Kaushik, coo, global business, joined upl three years ago. he was previously with Bayer. Like Kaushik there are other professionals from mncs that have joined upl, in the last few years. “upl has moved on from a small sales oriented regional player to become a global marketing player with 80 per cent of its business outside india. and from a technical manufacturer to a branded formula-tions business, besides it has become

a patent driven proprie-tary generics crop solu-tion company. together with its subsidiaries, it has filed for 107 patents within india and 222 international ones. of this, it has been granted 48 and 45 respectively. it has the complete agri-culture chain. this is what hit my eye,” says Kaushik.

as per the latest num-bers compiled by philips mcdougall (an inde-pendent firm provid-ing data and analysis on the global agrochemical industry) in 2013 (latest international data avail-able), amongst its global

Kaushik: saw upl move up the value chain

A DECADE OF TRANSFORMATION IN UPL REVENUEIn terms of product portfolioIn terms of p

2004 2014

2004 20142014

Latam26%

2004

Rest ofworld24%

Rest14%

EuropeanUnion19% European

Union 19%

NorthAmerica

25%

NorthAmerica

20%

India32%

India21%

4 222222220222

RRRRRResRRR t14%India

32%

Other27%

Other19%

Fungicide5%

Fungicide25%

Herbecide24%

Herbicide28%

Insecticide44%

Insecticide28%

In terms of geographical spread

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JULY 7-20, 2014


peers, upl has been a clear leader. over the eight years, from 2004-2012, sales of upl logged a cagr of 23.4 per cent as opposed to the industry average of 8 per cent. the only other player to witness double digit growth during this period was fmc which grew at 12.2 per cent, fol-lowed by mai (8.7 per cent), arysta (8.6 per cent), nufarm (8.2 per cent), syngenta (7.5 per cent), chemin (6.9 per cent), and dow (6 per cent). the rest in the pack – isihara, basf, dupont, monsanto and Bayer – were all below 5 per cent.

“as an indian mnc going over-seas upl has fared well. we believe that venturing into developed mar-kets (like the Us and europe) would be difficult for other indian compa-nies, as the agrochemical market is already matured and all the big six mncs or innovators – Bayer, basf, dow, dupont, syngenta and mon-santo – have a strong presence in these geographies. however, in emerging, markets the growth opportunities are huge for new players despite the presence of the innovators,” explains manish mahawar, manager, edelweiss financial services. global mncs like Bayer and syngenta are already com-peting with indian companies like rallis india, pi industries, upl, dha-nuka, based on their strong r&d backing from global par-entage. “however, indian players are competing based on their strong distribution network which is a constraint for global mncs except Bayer. Bayer has the largest distri-bution network in india.” in terms of rankings in india, upl is clearly the leader, as per latest data available for 2013 (see chart: indian agro-chemical companies)

interestingly, the domes-tic agrochemical market in india has been growing at a cagr of 12-14 per cent over the past 4-5 years com-pared to the global indus-try growth of 5 per cent. the sector has increased its share in the global agrochemical industry to 9-10 per cent of the world market, which was

6 per cent in 2008. “an increase in food demands and reducing arable land in india is pushing the demand for higher yield which has become a key growth driver of the industry. an increase in farmer awareness of the various scientific technologies avail-able and reducing manpower has also

helped drive growth in the indus-try. exports of agrochemicals from india have also shown tremendous growth; which has helped the indus-try. the erratic monsoons have in many cases forced indian companies to maintain high levels of inventory making the sector highly working

capital intensive. this has mainly affected a lot of generic players who play on small volumes. the increasing inventory days have a strong bearing on the profitability of the low margin generic play-ers,” explains n.K. aggar-wal, chairman of the north india-based crys-tal group.

“india’s agrochemi-cals industry, which is the second largest in asia (behind Japan), and with a size of over `20,000 crore (with almost 50 per cent of production getting exported) has huge unre-alised potential. Judicious use of pesticides involves using the right product of correct dosage and with appropriate application

Vora: working on improving the financials

Bhagiradha Chem.

Astec Life

Bharat Rasayan

Monsanto India

Sabero Organics

Dhanuka Agritech

Insecticid.India

Nag. Agrichem

Meghmani Organ.

Excel Crop Care

P I Inds.

Rallis India

Bayer Crop Sci.

Syngenta India

UPL

Sales turnover in 2013 (` crore)

Source: Capitaline/Company Reports

INDIAN AGROCHEMICAL COMPANIES

4,136

3,032

2,839

1,419

1,313

816

809

702

650

646

542

460

204

185

160

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JULY 7-20, 2014


methodology to ensure minimal impact on non-target species. it is not only the responsibility of the government but also the responsibil-ity of manufacturers to work closely with farmers to educate them on safe and judicious use of pesticides,” states K.c. ravi, vice-president, com-mercial acceptance and public pol-icy, south asia, syngenta.

according to the 2013 agrochem-ical report released by tata strate-gic management group (tsmg), over the Xiith plan period, the agrochem-ical segment is expected to grow at 12-13 per cent per annum to reach $6.8 billion (`39,000 crore) by fY17, with domestic demand growing at 8-9 per cent per annum and export demand at 15-16 per cent per annum. “we see great potential of growth in india. Because essentially indian agriculture has a fundamental need to become much more productive and sustainable in the years ahead. there is no question that there is a real need to improve the sustain-ability and productivity of indian agriculture and a huge population growing rapidly and with lot of eco-nomic growth as well, but some real sustainability challenges particularly around water which is probably the most extreme challenge that agricul-ture has. the question of food secu-rity for a spiralling population in india becomes even more pertinent after the facts highlighted by Un’s

intergovernmental panel on climate change,” says ravi. “and there is no reason why india cannot play much more significant role in terms of agri-culture supply not just to meet its own needs, but the needs of other countries as well. so we think that with the adoption of new technology, with the adoption of better farming practices, indian farmers can become more profitable, more successful but also more productive and sustainable in their core activities.”

Exports marketeven the market for agrochemical exports looks attractive with many of the mnc majors keeping india as a base for exports. as per the tsmg report, the indian crop protection market was estimated at $3.8 billion in fY12 with exports constituting 50 per cent of the market. “indian com-panies need to reinvent their port-folio to meet the changing demand, and options can be in the bio pesti-cides and herbicide markets which are expected to grow at more than the average global agrochemical market growth,” says manish panchal, prac-tice head, chemicals & energy, tsmg, pointing out the key growth drivers for bio-pesticides: increasing demand for residue-free crop protection prod-ucts, easy registration compared to conventional pesticides, stringent regulations and increasing concern of safety and toxicity aspects, lower

cost of development ($6 to $10 mil-lion) compared to synthetic pesticides ($150 million to $200 million) and lower product development time (3-4 years compared to 7-8 years in tradi-tional pesticides) while for herbicides it is the increasing labour costs and a labour shortage.

panchal is reluctant to comment on any particular company, he feels growth through the inorganic route has been a trend amongst agro-chemical companies to expand their presence. “the top three global com-panies constituted 60 per cent of market in 2012 as compared to 35 per cent in 1998. indian companies can look at various inorganic growth opportunities to expand their global presence,” he says, suggesting strate-gies companies can adopt, including vertical integration opportunities into seeds and bio-technology which are upcoming growing segments. “some of the international players which followed this route are synge-nta – acquisition of mayagro seeds; mri, devgen; basf – acquisition of enzyme biotechnology company Verenium; monsanto – acquisition of dieckman seeds (parts); and rosetta green, agradis.

“companies can also consolidate their presence in existing businesses,

upl’s R&D spend is close to 2 per cent of its turnover

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JULY 7-20, 2014


enter new segments and obtain access to new geographies through inorganic growth opportunities,” he adds. some of the notable exam-ples are the acquisition of isagro’s insecticide business by cheminova, acquisition of isem’s fungicide tech-nologies by Belchim crop protection and acquisition of biopesticide com-panies – agraQuest by Bayer, pasteu-ria Bioscience by syngenta, Becker Underwood by basf.

“we announced our integrated strategy in 2011. through this strategy we began to build on the combined strengths of our crop pro-tection and seeds businesses to focus more comprehensively on the chal-lenges farmers face and started devel-oping fully integrated offers on a global crop basis. we have been able to build a very different set of con-nections with our growers and our stakeholders as a result of our inte-grated strategy. with this we look forward to gain at least 10 per cent of the indian market share and also to become a complete solution provider for the seeds to harvest needs of the farmer,” says ravi of syngenta.

Future valuein this regard, as early as 2006, upl diversified into related activities with its entry into the seed business, by acquiring advanta, and has thus built an integrated business model. “obvi-ously we realised this was an area that could generate future value, and we had been looking at the industry for five years when the opportunity to acquire advanta came up. we saw it could be interesting but difficult,” explains Jai, who even questioned upl’s plans to compete against some of the biggies in the industry. “as it turned out, this is a fabulous busi-ness. it has grown three fold since and clearly has the potential to grow 10 times.”

today, the upl group, starting with advanta in seeds, has a pres-ence across the value chain, with products like herbicides, insecticides, fungicide, fumigants and storage housed in the parent company and post harvest and adjacent technolo-gies like neofog for hot and cold fog-ging , warehouse disinfection, vector

control, etc.on the domestic front, the core

competency of indian agrochem-ical companies still remains their high penetration into the remot-est of areas and the vast distribution and marketing network. many mncs are taking advantage of this vast net-work by entering into co-marketing arrangements with indian firms. also the vast network has helped many indian companies to introduce new brands by way of new registration and through entering strategic joint ventures with agrochemical firms and researchers across the world. similarly, upl has also entered into marketing alliances with various companies like aventis to cater to mexican, american and french mar-kets, mitsui to cater to the Japanese markets, etc. “the nature of these tie-ups is country specific where we may be distributing each other’s products in one market and in another mar-ket we would be slugging it out,” explains Kaushik.

“in spite of the various challenges the prospects of the indian agrochem-ical industry looks very bright and the industry is expected to continue its growth of 12-14 per cent fuelled by growing demand and increased penetration in untapped territo-ries and markets. indian companies have also been entering into strate-gic alliances and partnerships as well as aggressively bringing in new regis-trations thus investing in improving the product-mix. some factors like increased labour costs have increased the consumption of agrochemicals, mainly the herbicide segment. the indian market, which predominantly comprised insecticide sales, is slowly showing a shift towards greater usage of herbicides. the industry has been proactive in registering and bring-ing new herbicides thus ensuring a steady growth,” adds aggarwal of crystal, who sees many indian com-panies over the years investing in r&d. however these companies are still at hardly 1 per cent of the bud-get on r&d while the global r&d bud-get is almost 15-20 per cent. this was mainly due to the heavy cost and time involved in developing com-pletely new technologies. however,

u Gnyan Dham trust, Vapi

u Gujarati and English Medium Schools, Vapi, Ankleshwar

u Community library, Ankleshwar

u 60 school buildings in different villages in Gujarat

u Supports Arts, Science & Pharmacy, Vapi

u Smt. Sandra Shroff Nursing College and Management School, Vapi

u Chemical Engineering College, Ankleshwar

u Supports many needy children with financial aid in & around factory locations in Gujarat

u Tribal development project, Dangs, Gujarat

u Large scale planting of trees, Vapi and Ankleshwar

u Rural electrification and tube wells for drinking water supply projects in villages around Vapi and Ankleshwar

u Social activities to reclaim saline soils and fund water pipelines (Kutch, Gujarat)

u Active participation in natural disaster relief operations

Lighting up lives

Sandra Shroff, vice chairperson at upl spearheads the group’s csr activity

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JULY 7-20, 2014


indian players are slowly realising the importance of such long-term investments and planning and have thus started to invest into r&d. cur-rently, upl’s r&d spend is close to 2 per cent of turnover.

aggarwal is also looking at r&d to grow his `1,000 crore empire. “we are coming up with an r&d centre at sonepat in haryana, which will be working to develop new envi-ronment friendly molecules – both chemical and biological – as well as on technologies to increase the effectiveness and efficiency of our current products. we will also be working on more efficient formula-tion technologies,” he says. “in the short-term we are expecting almost 20 new registrations to come across in the next couple of years. these are highly efficient molecules and we look forward to increasing our market share in all the agrochemi-cal segments including insecticides, herbicides and fungicides. we have also entered into multiple strategic alliances with international players and are investing rapidly into gain-ing registrations across the globe in many markets including, southeast asia, Latin america and europe. we also are increasing our presence in the african sub-continent.”

although competition is hotting

up and even smaller indian compa-nies are looking at overseas markets, the shroffs have plans to launch a slew of patented products in the next 2-3 years. “the focus of the manage-ment has also shifted to quality of growth and profitability. to achieve this, the company aims to focus on organic growth with higher mar-gin differentiated products and by realignment and optimisation of the supply chain to drive synergies,” states an ashika research report.

Seeing a revivalmeanwhile, over the last few years, the global agriculture sector has seen a revival on the back of rising food prices. the global importance of increasing food grain production implies secular growth for agrochem-ical companies like upl. again, with a rising population and declining arable land, the focus globally is on increasing yield and food security.

“during cY13, the global crop protection market has increased by about 8.5 per cent. south amer-ica and asia, particularly Brazil and india, will drive market growth in the coming years. these two regions still have the potential to increase produc-tivity with the significant crop inten-sification with farm inputs. further, attractive crop commodity prices

with new products introduction and further market driven innovations will keep the growth momentum in the crop protection market in the future to come,” observes Kaushik, who feels the players with poten-tially new product pipelines, along with market driven innovations, can aspire to grow in the coming future. “further, there shall be continuous expansion in the off-patented space of the market giving stronger oppor-tunities for companies operating in such a market space. in particular, those players increasing their mar-ket participation in emerging mar-kets like india and china could also aspire for higher growth.”

“in order to meet the food grain requirements of the nation, the agri-cultural productivity and its growth needs to be sustained and further improved. Judicious usage of agro-chemicals is very important for the sustained growth of indian agricul-ture and economy,” concludes rajju, who is all set to take upl to more geog-raphies in africa and closer to home in countries like indonesia, Vietnam and thailand; besides the continued growth in Latam and india.

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The upl group: global pursuit

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