“We are market leaders in maize, sunflower, bajra and varietals rice. Says Mithun, executive director.
Kaveri Seed Company was established in 1974 by Mr. G. V. Bhaskar Rao, CMD, just after completing his graduation in agriculture. He is the main promoter of the company. Mr. Mithun is the executive director. He has done his MBA. “It is our family business but I am there in the company from 2005,” he says. The company is headquartered in Secunderabad, Andhra Pradesh.
When asked what made the company focus on seeds, Mr. Mithun says, “Seed is a living entity and it is the most vital input in agriculture. If you do not have a seeds which does not have the potential to give enough yield then the inputs like fertilizers pesticides etc will not help the plant.”
The company started its operations in Andhra Pradesh and Karnataka. It later on expanded its operation across India to have pan India presence. “We are market leaders in maize, sunflower, bajra and varietals rice. And we have presence in crops like cotton, jowar, vegetables, hybrid paddy etc. and we hope that we will have a good market share in all the crops in the coming years,” avers Mr. Mithun.
Source of Seeds
Mr. Mithun maintains, “We have got a huge collection of germplasm and from them we breed for the desired traits and after getting the right combination we will enter into an agreement with farmers for taking up production. After that it is transported to our processing plants and there we clean, grade it and sometimes we even treat it with some chemicals to avoid soil born diseases and then we supply it to distributors. Retailers in turn supply it to farmers. To do the above mentioned activity it takes a minimum of 6 to 8 years. Supplying of the seed mainly depends on the forecast of the demand and taking up the production. For example if you want to sell the seeds in 2015, you need to start your activity now. These are the entry barriers in the industry.”
The company does not cultivate vegetables but breed them. “We have got farms in and around Hyderabad and we have got farms across India for example if we want to take traits in wheat we go to north India. Based on the crop we choose our farm. We have got more than 450 acres of land in our company’s name dedicated for R&D and we even take some lease farms based on the crops,” maintains Mr. Mithun.
Shelf Life of Seeds
Speaking about the shelf life of seeds, Mr. Mithun says, “Shelf life of each crop seed varies. For example in maize it is 6-8 months, whereas in cotton it can go upto 2 years, but in maize if you take up proper procedure like artificial cob drying, which brings down the moisture level to 8% from a usual 12-13% and storing it in optimum conditions like 11 degree centigrade and maintaining optimum humidity we can store upto 12-14 months.”
He further maintains, “We have cob drying facility and we have ultra modern cold storage facilities. We have invested to a tune of Rs. 80 crores in past one year in constructing processing facilities which will help in increasing the vigour of seed germination and as well as the shelf life.”
He adds, “We breed for good quality hybrids and each hybrid we release is an output of R&D. We are having bio technology lab where in we check for BT gene and do research related to DNA marker technology.”
Marketing of Products
When asked about the difficulties in marketing the products, Mr. Mithun maintains, “To sell our products we need to show the performance of our hybrids comparing it to competition. We need to have a strong research base to give a better hybrid and we have to anticipate the need of the farmer. The R&D should be a need based R&D which can address the problem and we never try to push the product without trials and we have got a strong Q&A to ensure top most quality.”
The company has not yet entered the export market but has sent some samples to countries like China, Bangladesh and Pakistan for future prospects.
Indian seed market
Commenting on the future prospects of the Indian seed market, Mr. Mithun says, “Indian seed market has got huge potential compared to overseas. In India most of the crops are yet to be hybridized. If you see the total area under rice cultivation is around 42 million hectares and the hybridization is in less than 1 million hectare.
And we see a huge growth in coming years. Indian hybrid seed market is estimated at around 5000 crores and it is growing at a pace of 12% year on year. With introduction of new techniques in breeding and storing we anticipate it to grow at a pace of 15-18% in the coming years. Regarding MNCs they are present in the Indian market from late 80s but the domestic companies are doing better than them. What we feel is the companies who are having a better R&D can have a better market share.”
There are around 500 permanent and around 1500 temporary employees in the company. “We are doing a turnover of around Rs.125 crores,” avers Mr. Mithun
Suggesting initiatives to the government to support the seed industry, Mr. Mithun says, “They need to provide proper infrastructure to do testing and trials. The government also needs to encourage seed companies to invest in R&D by providing capital subsidy and relaxation in tax.”
He further advices, “Government should start a program for educating farmers and demonstrating the advantages of using hybrids compared to conventional varieties and they should try to reduce the subsidies given to farmers on fertilizers or farm loan waivers and try to invest that in constructing irrigational projects and in developing new cultivating techniques in agriculture.”
In terms of future plans, the company has released new hybrids. “They are performing well and we see a minimum growth of 20% year on year for next 3 years,” says Mr. Mithun.
Source : Agriculture & Industry Survey[/hidepost]