LETTER TO THE SHAREHOLDERS
RESILIENCE IN THE FACE OF A TOUGH YEAR
Our recipe for growth is also our blueprint for success. Our focus has expanded frombeing a large scale grower of roses to a major food producer.
We have acquired agricultural lands in Ethiopia, Africa, developed these intocultivatable land, built infrastructure for irrigation, installed best of class machineryand we are sourcing best of class agricultural inputs like seeds from Pioneer Seeds, USA ,fertilizers from Yara of France, weedicides and pesticides from several global majors likeBayer, Monsanto, Syngenta, Etal.
We have been very thoughtful and decisive about our plan to grow both organically andthrough partnerships in Ethiopia, Kenya and India. We have deeply analyzed the globalagricultural market dynamics and our own portfolio and have put together a plan that willemphasize the areas where we have our strengths.
ON ADDRESSING GLOBAL FOOD SECURITY
We are part of the solution to global food security. The number of people which theworld must feed is expected to increase by another 50% during the first half of thiscentury.
When coupled with significant nutritional improvements for the 2.1 billion peoplecurrently living on less than $2/day (World Bank 2008), this translates into a verysubstantial rise in the demand for agricultural production.
GLOBAL FOOD CRISIS: Established trends that are affecting both global demand andsupply.
DEMAND SIDE: Addition of 70 million people per year to the earths population
4 billion people moving up the food chain consuming livestock products
Demand for grain to produce ethanol.
SUPPLY SIDE: Limited new land to be brought under agriculture.
Prime crop land is being used for industrial and residential construction
Difficulty for farmers to keep pace with the growth in demand
CHALLENGES AFFECTING FOOD PRICES:
Higher consumption per capita
Cost of production
Insufficient production vs. demand
ADDRESSING KEY CONCERNS
The Successful and bountiful harvest of maize this year after the devastating floods of2011 had vindicated the vision of the company to take the bold and courageous step ofchoosing to enter large scale commercial farming.
The flood reminds one of the Patalganga project, where Reliance executed the megaproject ahead of schedule only to be devastated by floods. The flood did not stop theCompany from building Reliance into a global power house that it is today; neither will itstop us from accomplishing our mega visionary project that will supply 5% of incrementalworld food demand.
Finally no strategy is meaningful without outstanding execution; we are investing increating the factors that will accelerate the kind of growth we are looking for.
We are convinced that factors that made us very optimistic earlier are still presentand stronger than ever. Growing global demand for agricultural products, our abundantwater, land and labour resources as well as our expertise are factors that are going todrive our present and future growth
SAI RAMAKRISHNA KARUTURI
Chairman & Managing Director