IIL, Otsuka likely to pump Rs 500 cr to develop agrochemicals

Both the companies have recently entered into a joint venture to set up a modern R&D centre in Rajasthan

Agro-chemical manufacturing company Insecticides India Ltd (IIL) and Japan-based Otsuka AgriTechno (OAT) are expected to invest about Rs 500 crore to develop new agro-chemicals over the next five years.

Both the companies have recently entered into a joint venture to set up a modern R&D centre in Rajasthan.

IIL Managing Director Rajesh Aggarwal said that the centre is expected to start its operations from April, 2013.

"...$20 million (about Rs 100 crore) is required to develop a single molecule (for an agro-chemical)," OAT Board Member Tetsuya Imai told PTI.

The centre aims to invent five new molecules over the next five years, he added.

The Japanese firm would provide the technology and research know-how to invent new agro-chemicals.

Imai also said India's growing agro-chemicals market has attracted the Japanese firm to enter the country.

"This is the OAT's first R&D centre outside Japan. India has a huge market. Agriculture sector is growing at a rapid pace here. We see lot of opportunities in India," he added.

The market size of Indian agro-chemicals industry is expected to more than double to $5 billion by 2017 on rising agri production and ncreasing awareness among farmers.

Currently, the market size of the sector stood at about $2 billion.

Per capita pesticide consumption of less than 500 gm of per hectare in India --  far below the world average of about 3 kg per hectare. "The figure reflects that huge potential exists here," Aggarwal said.

Shares of IIL on Friday closed at Rs 412.55 apiece on the BSE, valuing the company at Rs 523 crore.