By Ritwik Sinha
India-based crop protection major United Phosphorous Limited (UPL) is expecting a significant surge in sales in the domestic market in the near- to medium-term due to the government’s ambitious target to raise farmers’ incomes and robust growth in farm exports.
UPL, which is among the top five global agro chemical companies after acquiring Florida based firm Arysta Life Sciences last year for $4.2 billion currently, earns about 18 percent of its revenue (Rs 9,376 crore in 2018-19) from the domestic market.
“The government’s target of doubling farmers income by 2022 and doubling of agri exports entail an exciting spell for companies like us which are in the agri-input space,” Rajju Shroff, Chairman and Managing Director of the company, told Indoasiancommodities.com in an interview.
“We expect our domestic sales to shoot up considerably in the coming years. It may not make a major difference to our country specific percentage earning. But the volume of our sales will definitely go up,” he said.
In terms of earning from different geographical pockets, Latin America with a contribution of 32 percent to UPL’s revenue currently leads the pack.
The company, which has a broader portfolio in agrochemicals, industrial chemicals, chemical intermediates, specialty chemicals, and crop protection solutions, runs several farmers’ engagement programmes in the country.
Shroff said enhancing yields by guiding farmers to use the right inputs is possible and stakeholders in the business need to evolve a more collaborative approach.
“In many pockets, we have helped farmers to improve their yield. The doubling of farmers’ income target can be achieved if we can encourage them to adopt scientific and advanced means of farming,” he said.
Shroff rejected criticism that the use of pesticides is leading to cancer among farmers in areas such as Punjab’s Malwa region.
“Such controversies are created by NGOs with vested interests. There is no empirical evidence to suggest that pesticides are resulting in cancer,” he said, adding that India today was a bigger producer of agriculture commodities than the US.
“While the US is using 4 lakh tonnes of pesticides, in India its consumption is close to 60,000 tonnes. The theory that we are over-using pesticides has no merit,” he said.
Commenting on the biggest bet of his entrepreneurial career – the acquisition of Arysta Life Science, Shroff said the merger process has been completed and the big ticket buyout will reflect in the financial numbers of the group soon.
The deal has pushed the group in the league of global majors such as Syngenta, Bayer, BASF, DowDuPont, and the company is expecting its top line to cross $5 billion after the operational amalgamation of Arysta.
Arysta has a strong sales and distribution network in Africa, Russia and Eastern Europe and its buy out is expected to give UPL access to new geographies outside of its current strongholds of Americas and Western Europe apart from domestic sales.