Insecticides India to hike product prices by 5 per cent

Currency situation not that great, says company MD Rajesh Aggarwal

Agrochemicals manufacturing company Insecticides India Limited (IIL), which had already implemented a price hike of 10 per cent in the last couple of months, is gearing up to further go in for a 5 per cent price jump across its product portfolio during August, said managing director Rajesh Aggarwal.

“The currency situation is not that great. Also, there is supply tightness internationally while the demand pressure for pesticides is high owing to good monsoon this year,” he told mediapersons here on Friday.

The Indian pesticide sector is estimated to have grown  8-15 per cent a year to  $4.1 billion currently, with the growth primarily driven by exports, which account for more than 30 per cent of the total market.

IIL, in which the promoters hold close to 75 per cent, is also contemplating diluting 10-20 per cent of the promoter stake to part-finance its expansion and brand acquisition plans. According to Aggarwal, the company has been receiving offers and is also open to divest stake to Japanese research firm Otsuka.

IIL had formed a 20:80 JV with Otsuka last year. The JV is setting up a research and development (R&D) centre at Chopanki in Rajasthan that will be operational during October-November this year.

Launching the company’s three new broad-spectrum insecticide brands Xplode, Gama and Logo, in the Andhra Pradesh market today, he said ILL was seeing huge opportunity in the state as the sowing areas were increasing 10 per cent over last year, against 52 per cent country-wide.

“Sowing, however, is 33 per cent more in Telangana and the prospectus of a good kharif harvest, especially for paddy, soya and maize, is in the offing due to recent rains,” he said.

ILL registered sales of Rs 155 crore in south India, including Rs 101 crore in Andhra Pradesh last year, cornering a market share of 6%. It expects to cross the Rs 200-crore mark down south (Rs 130 crore in Andhra Pradesh) this year.

Stating that the Xplode and Logo brands together would fetch Rs 70 crore in the first year of launch and Rs 200 crore in the next two years, Aggarwal said the company was expecting to garner revenues of Rs 850 crore this financial year, as against Rs 650 crore last fiscal.

ILL’s scrip plummeted 2.22% to end the trade at Rs 385.05 on the BSE on Friday, over the previous close of Rs 393.80 a share.