Bayer says India's agriculture economy stressed, banks on new products

Focuses on launching new products to beat the slowdown in India's agriculture economy

Crop science major Bayer CropScience is banking on a new business model for growth as it sees India’s agriculture economy being stressed in the near term, and also as the company’s bottom line has taken a hit due to a weak Rabi season. Now, it is implementing a new business model and launching new products to improve sales and profits.

D Narain, vice-chairman, managing director and chief executive officer (CEO) of Bayer CropScience, said: “Adverse weather and drought led to a weaker-than-expected Rabi season. Overall crop economics will remain stressed in the near term and we are convinced about the long-term potential of the market.” The company incurred a loss of Rs 79.8 crore in the March quarter on revenues of Rs 128.8 crore. For the entire fy19, the Bayer arm’s revenue was Rs 2,685.7 crore, up from Rs 2,749 crore in the previous financial year. The company logged a profit of Rs 237.6 crore in FY19, a decline of 20.8 per cent from Rs 300 crore in FY18.

Bayer CropScience is banking on new initiative wherein company has focused on working with several small holder farmers and partners including International Finance Corporation to develop value chain and entrepreneurship opportunities for many people.

Bayer has launched Aqua K-Othrine, a new product in the vector control segment under its environmental science business. This is the company’s first launch in twenty years in the Indian vector control market. Aqua K-Othrine is a water-based insecticide that cuts costs by 80 per cent. Most products in this segment use oil-based diluents such as diesel.

When asked about Bayer and Monsanto’s merger in India, Narain said:“Our focus will be on product innovation, digitalisation and partnerships. Based on the anticipated completion of the merger in India, we envisage new market opportunities and operational synergies from the integration with Monsanto.”

Sources, however, said that the merger is likely to be completed by September-end if all expected approvals come on time.

Bayer CropScience and Monsanto India are listed companies and markets regulator Securities and Exchange Board of India’s (Sebi) nod is expected before September.

Monsanto has two unlisted firms in the country. One is Monsanto Holdings and the other Mahyco Monsanto Biotech (MMB) — a 50:50 joint venture (JV) with Mahyco. In case of a JV merger, the partner company has to be given the right to continue. So, Mahyco’s decision is another condition for the merger to go through.