We expect rapid growth of agrochemicals sector
Marketing wizard SP Mohanty was assigned additional charge of CMD in July 2016 and he transformed the company with several initiatives. He spoke about challenges and prospects of the company. Excerpts:
As Director (Marketing), you had already introduced several new initiatives for the growth of the company, what challenges you faced initially as CMD and how did you overcome those?
There were several challenges. First of all, there was an urgent need to go for modernisation with automation and digitisation. Average age of the employees ranged between 56 to 58, hence a large number of people retiring every year.
So we focused on infusing motivation to existing staff and new recruits to adopt modern tools and we implemented that very effectively. Now we fully adopted automation and other technological innovation and are getting rich dividends. Second major challenge was cope up with private sector players which dominated the agrochemical business with huge imports of IPR products from China. Now with insecticide regulator Central Insecticide board (CIB) restricting imports, HIL is comfortably pushing ‘ Make in India’ campaign with adding new molecules and producing off-patented products/ solution for the farmers. These measures are adding up for revenue growth.
How do you see the financial growth of the company?
When I had joined the company couple of years back, though it was not in red but profit was flat and it was going through a tough phase. Moreover pressure was to do away with DDT which contributes
nearly 25 percent to our total revenue. With new initiatives and internal reforms, the financial health improved considerably. For 2016-17, with a turnover of Rs 382 crore, we earned net profit of nearly Rs 3.28 crore and would pay 30 percent dividend to the government. In 2015-16, HIL’s turnover was Rs 334 crore and for 2017-18, our target is to cross Rs 500 crore.
Better financials, diversification, innovations and smart working came because of your wide experience in the agrochemicals sector, what are your future plans ?
As I said, the company targets a turnover of Rs 500 crore in the current fiscal and focus would be on Public health and new businesses such as fertilisers, biopesticides and organic fertilisers.
Broadly, HIL business verticals include Public Health, Agrochemicals and Seed. We are all set to market fertliser products under its own brand name ‘ Jivan’ and sourcing will be done through imports and tie-ups with Indian & global companies.
We have signed agreements with National Fertilisers Ltd (NFL) and Rashtriya Chemicals and Fertilisers (RCF) to sell and market their urea in domestic market. We have now complete crop cycle in our product portfolio- from seed, fertlisers to insecticide and HIL will move to next level with very strong presence in this very competitive sector.
What are those breakthroughs
We would introduce new molecule to replace DDT by April 2018. The new molecule would be safe and internationally patented. Secondly we would be launching Long Lasting Insecticide Net (LLIN) which is being developed at our own Research Centre. With LLIN and new molecule, we would be able to phase out DDT. The Net project would be a great help for rural populace and we see huge domestic demand for this innovative product which would be affordable.
The HIL’s R&D centre has the Motto as “Green Environment and Clean Environment’ and that motivates the company to innovate. The Company focuses on development of safe, economical and environment friendly recipes for the existing pesticide formulations, to improve cost efficiency by using locally available indigenous raw materials and inerts.
How do you see the growth of Agrochemicals sector in the country
The Agrochemicals sector in India is growing at 10 percent annually. Huge outlay, earmarked by the government this year, for Agriculture and allied sector would also have great impact on the growth of the sector. Sale of agrochemicals are bound to increase. Moreover, new regulations issued by CIB to also push Indian companies including HIL to innovate and emphasise on new indigenous formulations and solutions and that would boost domestic production and import will be restricted. Overall, we expect rapid growth of the sector with quality products and solutions.
However, robust checking mechanism needs to be put in place by the States to control sale and use of spurious crop protection solutions. Use of spurious pesticides has risen upto 40 percent and that is a big challenge. Stringent actions need to be taken against those involved in the trade of spurious products.
Farmers also need to be educated for judicious use of fertilisers and pesticides.
Broadly, HIL business verticals include Public Health, Agrochemicals and Seed. We are all set to market fertliser products under its own brand name ‘ Jivan’ and sourcing will be done through imports and tie-ups with Indian & global companies
SP Mohanty Chairman and Managing Director, Hindustan Insecticides Ltd.