Rallis India, a Tata Enterprise, is one of India’s leading agrochemical player with 13% share in domestic market. Company is engaged in manufacture, trading and export of pesticides, plant growth nutrients (PGN) & seeds and seeds chemicals in India and internationally. Rallis is known for its quality agrochemicals, branding, marketing expertise and its strong and comprehensive product portfolio catering to a wide variety of crops. Its biggest strength is connection with farmers. Company has excellent manufacturing capabilities and ability to develop new processes and formulations supported by capability to register new products. On institutional side, Rallis provides technical and bulk of various molecules to leading companies like Bayer, Syngenta, Excel, UPL, Gharda, Cheminova, Dhanuka, Nagarjuna and other Agrochemical manufacturer.ñ Shortage of area under cultivation, increasing population, higher demand from emerging markets, usage of land to produce biofuels and feeds for animals etc. has led to food shortage. To improve food output, there will be increased focus on improving crop nutrition as well as crop protection. Moreover as food prices continue to remain high, farmers will invest more in fertilisers and agrochemicals. Agrochem industry, which is ~ Rs.4,000 crore, has good scope to grow. Rallis has taken a number of initiatives for sizeable growth in domestic as well as export sales of agrochemicals and high margin seeds / PGN segments and is all set to take advantage of emerging opportunities in growing agrochem industry.ñ In line with its thrust on new product development, Rallis has introduced 3-4 new products every year since last 3-4 years. In FY08, company launched 5 new products including Takumi, Sedan, Ishaan, Royal and Tebuconazole which were well received. New products constituted 30% of FY 2008 turnover. Company has obtained registration for 5 new products, of which 4 has been commercialised. 3 dossiers have been submitted for registration. Several products are at various stages of development and improvement plans for exiting products are also underway to improve company’s competitiveness.
It has entered into strategic long term alliances with research based MNC agrochemical companies and Japanese companies like FMC, Nihon Nohyaku, DuPont, Syngenta, Makhteshim Chemical Works and Bayer India, Borax International for bringing in new molecules and new formulation technologies for commercialization in India. Going ahead Rallis will continue to focus on growing and building its existing alliances which will enable it to continuously enrich its product offering based on changing market needs and enhancing value of its service to customers.
Company has around 25-28% stake in Advinus Therapeutics Pvt. Limited, a TATA group company engaged in Pharma and Agro Chemicals R&D. Advinus will be undertaking business of Drug Discovery and Pharmaceutical Development Services. There are major products under development.ñ To de-risk its domestic business, Rallis is focusing on growing its international business and aims to invest in registrations, which will bring more scalability. In FY 08, Rallis broke new grounds and obtained a joint registration for one of its key product in the US market. In FY 2008 exports were Rs 160 crore (Rs 153 crore) which represents ~23% of Net Sales. In next 5 years, Rallis aims to increase exports to ~50% of sales. Further company is strengthening its international presence and establishing new capacities for contract manufacturing.ñ Company is planning to set up formulations unit in Jammu & Kashmir @ capex of Rs. 20-30 crore and agrochemical facility in Dahej. This is a big project where Rallis plans to manufacture pesticide intermediates. New facility at Dahej may also act as a contract manufacturer for overseas agrochemical makers as well as for manufacturing pharmaceutical ingredients.ñ Rallis is planning to enter household pest control market, estimated at Rs 1,600 crore, and is dominated by companies like Godrej Sara Lee, Reckitt Benckiser, SC Johnson and Jyothi Laboratories. Earlier, company use to market insecticides under “Tik20” brand. Now it has stopped selling Tik20 and Moosh Moosh, rodent controller in the market. However, it does contract manufacturing for leading house hold pest control companies and recently launched Termex (insecticide for white ants control), Sentry (for mosquito control) and Ralli Gell (for cockroaches) catering to government institutions. Company has posted fantastic results for FY 2008. Net sales increased by 7.6% to Rs. 692.15 crore. OPM% improved significantly to 11.5% (5.8%) driven by higher volumes of its key brands during the year along with continued focus on value creating processes. Higher Sales, improved margins coupled with lower interest cost of Rs.3.66 crore, led to 300.2% spurt in PBT (before extraordinary items) of Rs 63.79 crore. After accounting for higher exceptional income (net of accelerated depreciation) due to profit on sale of land of Rs. 82.38 crore (Rs.39.07 crore), PAT zoomed to Rs.125.19 crore.