IIM UDAIPUR

Assignment 1 RALLIS INDIA

K BHUVAN PRASHANTH-111019 MOHINA CHADHA RAHUL R RAM MANOHAR VINAY DHOK -111026 -111039 -111041 -111059

Executive Summary-:

Rallis India, a Tata Group company, is a leading manufacturer of generic agrochemicals, otherwise known as pesticides, in India. It also sells other farm inputs such as agricultural seeds and plant growth nutrients. Although definitive recent data on the Indian pesticides industry is unavailable, it is generally believed that in the domestic market for branded agrochemicals, Rallis occupies the second position in terms of sales, next only to Bayer CropScience.

Rallis India has covered major market share of pesticides because of its strong distribution network and ability to understand farmers needs. Rallis provide assistance to farmers regarding use of pesticides that helps them in increasing their productivity. It has extensive research facilities to provide its customer the best product of their need at a very low cost. Rallis India has tie-ups with international brands to bring latest products to Indian market.

Rallis India can have better market penetration . Rallis is badly prepared for new technological development in the field of Genetically modified crops.

Rallis has extensive research capabilities but it needs further improvement to develop more useful products. Supplies should not be limited to few states in India but should reach every part even far-flung areas. Export capacity can be increased by having tie-up with different international firms.

Development in the field of genetically modified crops is threatening the market of pesticides as that will wipe out the whole market of pesticides.

Rallis India is second in terms of sales in Indian market. Next target is to increase market sales and move into bio-fertilizers, bio-pesticides. Rallis is also planning to increase capabilities in chemically developed seeds.

RALLISINDIA

Rallis India Limited is one of India's leading agrochemical companies with a century-old tradition of servicing rural markets and a comprehensive portfolio of pesticides for Indian farmers. The Company is known for its deep understanding of Indian agriculture, sustained relationships with farmers, quality agrochemicals, branding and marketing expertise along with its strong product portfolio.Rallis has specialization in Pesticides, Seeds, Plant Growth Nutrients,Polymers. Rallis occupies the second position in terms of sales in domestic market for branded agro chemicals. Rallis has a market share of 11-12% and export consists of over 32 % of its total revenue. Rallis product portfolio comprises some of the best-known brands in the Indian pesticides market, including some that were introduced decades back and are still going strong e.g., the organophosphorus insecticide Rogor. In the most recent makeover at the turn of this century, Rallis sharpened its focus on pesticides while divesting other, noncore business lines and emerged as a leaner, more profitable company, now eyeing new opportunities for growth in and around its core business.

MACRO ENVIRONMENTAL TRENDS -:

India ranks second worldwide in farm output. Agriculture and allied sectors like forestry, logging and fishing accounted for 15.7% of the GDP in 200910, employed 52.1% of the total workforce, and despite a steady decline of its share in the GDP, is still the largest economic sector and a significant piece of the overall socio-economic development of India. Majority of people depends on agriculture for their income thus indicating huge market for pesticides. Rallis is low cost manufacturer of pesticides and very competitive in export market. Within India the major consuming states are A.P, Punjab, Maharashtra, Gujarat and Karnataka Analysis of farmer economics suggests that rising minimum support prices(MSPs) lead to fairly healthy margins for farmers, increasing their ability to investing their farms. Spending on pesticides varies considerably across states; however sizeable profit margins suggest an ability to absorb increased investment in productivity-enhancing tools like fertilizers, pesticides and seeds. This should hold true even if prices of complex fertilizers rise moderately over the next few years as a consequence of the governments nutrient-based fertilizer subsidy policy.

Amount Spent on Pesticides in four states (Rs)

Gujarat
Bt Non-Bt 2,586 3,153

Maharashtra
Bt Non-Bt 3,242 4,120

Andhra Pradesh
Bt 7,806 Non-Bt 10,878

Tamil Nadu
Bt Non-Bt 1,909 4,195

The general conception is that the pesticides are harmful in nature but they are important ingredient in farming. The future of Rallis is bio-pesticides which are not be harmful to environment.

Rallis has tie-ups with some international brands in exports and imports pesticides from these brands thus providing technological advantage to farmers. Some of the major companies they are having tie ups with include FMC USA, Syngenta, etc.They have an excellent R&D centres which specialise in process development and chemical intermediate. This department support the manufacturing team in troubleshooting in day to day operations, cycle time, transfer of technology from lab to production level.

MICRO ENVIRONMENTAL TRENDS-: As agriculture is the main work force of the majority in India, there are so many manufacturers in the agricultural industry. There are companies which produces pesticides, fertilizers, seeds etc. Rallis is performing very well compared to their Indian counterparts like Monsanto India, PI industries, United Phosphorous etc. Rallis is having a net profit of Rs.126.21 cr. The main customers of the products are the farmers. Rallis has always been Indian farmers close friend. The comprehensive range of agro products and services are spread across 80% of Indias districts through an extensive distribution network. The network consists of 5 zonal officers, 33 area sales officers,23 depots, 190 sales territories,1500 dealers & 30,000 retailers. The extensive database of farmers enables rallis to send newsletters & mailers. Through these mailers Rallis educate the farmers on good farming practices and the correct usage dose of the products which is very important for better results. The supply chain for the raw materials is very vast including Indian and International partners.

Opportunities leading towards the success of the company-: Farmer incomes have been on the rise in India, due to higher minimum support prices. The resultant increase in disposable incomes should, we believe, disproportionately benefit the agrochemicals industry. Rallis has a very Strong distribution network which enables it to have a very strong market
penetration which is close to 80%.

It has tie-ups with international firms which enables it to introduce wider range of pesticides. Rallis believes in creating trust among farmers and it does that by having constant interaction with farmers. Rallis adheres to international standards and packaging is done according to U.N regulations, and the packaging is very customer friendly.

FUTURE CHANGES EXPECTED The market moving towards bio-chemical and bio-fertilizers and Rallis having ventured into this market and is looking to consolidate it further by marketing this product as its main product Rallis seeds business is currently very small, representing only 1% of total

revenues. However, Rallis believes there is a strategic reason for being in the seeds business: it is typically the first point of contact with farmers. Hence, Rallis is exploring ways to acquire seed traits from other companies. Keeping this in view Rallis is partnering with various seed company like nuziveedu seeds and other companies to expand their market throughout the company. Extensive research capabilities should be used to fulfil the needs of the farmers. As every states has different environmental condition keeping that in view different product should be introduced. Farmer will be given assistance to increase their production capabilities.

LEADING AGRO-CHEMICAL COMPANIES

Last Price Bayer Cropscien Rallis India Monsanto India PI Industries DhanukaAgritec Insecticides In Sabero Organics MeghmaniOrgani Excel Crop Care Excel 835.15 160.25 1,643.70 951.75 103.45 354.00 127.40 10.90 157.30 68.00

Market Cap.
(Rs. cr.)

Sales Turnover 2,139.27 1,074.22 362.12 719.30 407.53 477.90 412.72 865.83 731.15 275.94

Net Profit 131.54 126.21 42.85 64.12 36.34 32.22 10.62 47.18 43.69 13.42

Total Assets 781.49 595.73 351.57 450.17 230.67 148.12 197.01 857.60 330.67 162.63

3,298.74 3,116.36 1,418.71 1,191.99 517.45 448.98 431.45 277.20 173.12 74.16