Nagarjuna Agrichem plans capacity ramp up

Nagarjuna Agrichem Ltd (NACL), one of India’s leading crop protection companies, has undertaken a massive expansion programme at an investment of Rs 350 crore.

Under the plan, NACL proposes to increase its production capacity by 9,000 tonnes of which 1,000 tonnes will be added to its existing 8,000 tonnes of manufacturing facility at Srikakulam and Ethakota facilities through de-bottlenecking. While another 8,000 tonnes of greenfiled production of active ingredients facility is being set up at Special Economic Zone near Vishakapatnam, within the Petroleum, Chemicals and Petrochemical Investment Region (PCPIR). Both de-bottlenecking and greenfield projects will entail an investment of Rs 75 crore and Rs 250 crore respectively.

The company is setting up a world class R&D center in Hyderabad at a cost of Rs 25 crore, in collaboration with Indian / Overseas Universities. This center will work on innovation to commercialisation, substitutes for generics, basic and applied research and contract research

It is planning to commence commercial production on these projects by January 2012.

Ashok Muni, Director and Chief Operating Officer of NACL said that the company seeks to raise Rs 100 crore through private equity and qualified institutional placement (QIP) while Rs 200 crore will be raised from debt. The remaining Rs 50 crore will be funded through internal accruals.

Meanwhile, NACL has launched seven new products to cater to the rabi and kharif seasons, for grapes, onions, potato, vegetables, chili, tea, and cotton. To ensure a wider market reach for the existing and new products, an extensive distribution infrastructure has been created through 33 warehouses. Twenty new sales territories have been added taking the total to 350 sales territories and 1,500 new dealers have been added to take the total to 10,000 sales point.

“The company has robust and sustainable growth plans for the near future. Our vision for 2017 is to create a strong domestic brand equity having the highest market share of more than 12 per cent, while being a global player in branded products. Inorganic growth opportunities through Mergers & Acquisitions are also being explored to help make NACL a US$, One billion company in the next seven years,” Muni said.

NACL's Vision 2017 includes rapid growth in domestic and global markets by launching new branded products and entering untapped domestic and global markets.

NACL will continue to play dominant role in contract manufacturing, and also enhance brand equity be promoting branded products. The company is also exploring and evaluating opportunities to expand in the international through M & A and forge strategic alliances.

The company will also diversify to synergistic applications of agro -chemical intermediates. In the export markets, NACL has enjoyed the fastest growth rate in the last five years among all Indian companies with a CAGR of 14 per cent per cent from 2004 - 2009. NACL’s exports grew from Rs 54 crore to Rs 293 crore.