Q. How has been the performance of the company over the past 3 years, especially during 2008-09, when the global as well as the domestic economy was undergoing a major slowdown? A. Due to the recession, the year has been very challenging for the industry. However, Insecticides (India) Ltd - IIL registered an impressive topline and bottomline growth despite the recession and an adverse economic environment by expanding its client base and introducing new products. IIL has done exceptionally well during the last 3 years. In FY09, its turnover increased by 33% to Rs 2,945 million from Rs 2,215 million recorded during FY08. The company continues to grow and in the first half of the current fiscal year its turnover was Rs 2,453 million. We are hoping to maintain a 40% growth rate this year too and cross Rs 4,000 million. Q. The company has a dedicated R&D centre that focuses on manufacturing high value added complex new molecules for the generic market. How has the R&D undertaken by the company influenced its competitiveness relative to others in the industry? A. At IIL we have adopted a strategic combination of doing our own in-house R&D and buying and leasing global brands and this strategy has propelled IIL into a league of serious players in a short time. Global companies have always focussed on high-end specialty products and dominated the market for patented new molecules. However, since the patent regime was introduced in India in 2005, IIL has been increasingly spending on R&D to compete effectively. IIL has developed more than 20 technical processes in its in-house R&D centre, nine processes have been commercialised in the technical plant and 2 have been applied for process patents. Now, the other processes are likely to be commercialised in 2010 in the new plant. These (processes) products have not only helped IIL to strengthen its brands but also have helped the company in gaining the reputation of a quality manufacturer. All the leading companies, including the MNCs, are in our list of customers today.

Q. How has the company's R&D expenditure changed as compared with other cost centres or budget categories in recent times?

A. IIL has been aggressively focusing on R&D and is planning to invest Rs 60-70 million in the next 3 years. IIL has also started its R&D in biotechnology at Chopanki for its new pilot plant. The new biolab is already established and is working well. IIL also plans to establish a new state-of-the-art R&D centre at Dahej in Gujarat in the next fiscal year.

Q. IIL has a technical collaboration with American Vanguard Corporation, California, USA, for manufacturing and marketing THIMET in India and Nepal. How has this collaboration benefited the company?

A. Acquiring the exclusive rights to manufacture and market Thimet in India and Nepal from American Vanguard Corporation, USA in 2006 has been another big achievement for IIL. Thimet is the most popular generic brand worldwide and today, Thimet is one of the most successful brands of IIL that enjoys a handsome market share. Moreover, it has helped IIL expand its reach among farmers.

Q. Could you list out factors that provide a competitive edge to the Indian pesticide industry in the global pesticide industry?

Q. What are the opportunities and the challenges faced by the Indian pesticide industry?

A. The opportunities and challenges faced by the Indian pesticide industry:
1. Approximately 30% food grains in India are wasted due to plant pathogens, pests, weeds and rodents, stressing on the role of pesticides in the economy
2. With more awareness, farmers will opt for advanced agriculture, which means they will opt for use of hybrid seeds, fertilisers & agrochemicals for plant protection Mr Rajesh Agarwal Managing Director Insecticides (India) Limited 114
3. The government is increasing its investments in irrigation projects, which means advanced agriculture is likely to increase in future
4. As the availability of cultivable land is either limited or is shrinking due to development of infrastructure, towns and industries and the steady rise in population, the pesticide consumption is expected to increase in future. Thus there is a good potential for players, both domestic and overseas, in the coming years
5. Globally, due to consolidation in the industry, the top 5 global MNCs control almost 50% of the market. In India, the industry is very fragmented with about 30-40 large manufacturers and about 400 formulators
6. Bio-pesticides and integrated pest management are the two major areas of growth in future, as there is growing awareness of environmental concerns. Thus, the potential for joint ventures and for the entry of foreign majors is high

Q. What according to you should be the government incentives for development of pesticide industry?

A. For the development of the pesticide industry, the government should lower the CENVAT on both technical grade pesticides and formulations used in agriculture. The CST also should be brought down to 1%, as the delay is unnecessarily causing double taxation. As the government works for the welfare of farmers, the VAT charged by some states only increases the cost to farmers.

Q. Given that environment protection issues are becoming an important challenge for the industry, what measures are undertaken by IIL to overcome these challenges?

A. Environment protection issues have been top priority for IIL. Its dedication to preserve the environment and various actions taken as per international norms has enabled the company to get the prestigious ISO 14001:2004 certification. Health and safety of employees are one of our major concerns and the company has also adopted a system for occupational health and safety for its employees by being OHSAS 18001 certified. We believe in establishing the green belt both inside and around all our plants. Our plants do not release water into the environment but treat it and reuse it for agricultural purposes. In the new plant at Dahej, more than 1,000 trees will be planted within the factory.

Q. What are the segments that are going to drive the growth of the company in the near future? Would you like to share some details regarding the future plans of the company?

A. The technical plant offers staunch support to the growth of the company, as it contributes directly in increasing the sales. It also makes our brands more cost-effective and ensures regular availability, which gives us an edge in the market. We have seen that the volume of brands multiplies for the products that we have made the technical for. It helps us in providing value for money to the farmer. Having made its presence across the country, IIL now plans to maximise its reach by connecting to a large section of its aspirational audience based in remote rural areas. To reach out to vast demographic and psychographic profile of market share, IIL always has been aggressively aiming at spreading its footprints across the country by introducing new brands, strengthening its brand presence and appointing new distributors. Moreover, to reach out to the community of farmers, the company plans to spread its awareness towards the prudent use of pesticides and its safety measures. IIL plans to spread awareness campaign 'Jagrukta Abhiyan' to all states.

Q. What are the future plans for the company, any other issue that you would like to share with us.

A. The company is growing at a steady speed; we look forward to our forthcoming technical plant and the formulation plant at Dahej (Gujarat) and Udhampur (J&K), respectively. With these plants, we will be fully geared up to render the best quality products to even small and marginal farmers at an affordable price in the domestic market. Moreover, it will also ease our entry into the international market. Thus, we see good growth in future years and I foresee 50% growth in 2011.