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PresentationOn

“ INDIAN SEEDS INDUSTRY ”

Presented By:-

Rajan Patel Mo.:9099963456

MBA (AGRIBUSINESS)-III

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The Indian Seed Industry in Brief

SEED is the most important input component for productive agriculture.

The expansion of seed industry has occurred in parallel with growth in agricultural productivity.

Demand would depend more and more on the pace of development and adoption of innovative technologies.

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The Indian seed industry is currently valued around Rs 4300 crores and is proposed to be around 4650 crores by 2010.

There are about 150 organized seed companies in India today.

The share of research hybrids in total turnover of crops like pearl millet, sorghum-Sudan grass, sunflower, maize, sorghum and cotton.

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Types of Seed

Breeder seed: (directly controlled by the originating or

sponsoring plant breeder of the breeding programme)

Foundation seed: (Foundation seed shall be the progeny of Breeder

seed) Certified Seed: (Ultimate Seeds for Commercialization)

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The Role of Public Sector in Indian Seed Industry

The Role of public sector seed is now mostly confined to certified seeds of high volume, low value segment of high yielding varieties of cereals, pulses, and cotton with a limited presence in the high value hybrid sectors of cotton, cereals, and vegetables.

Public Sector involvement in the seed industry with the responsibility of promoting seed industry development from production through processing, storage and marketing, and establishing a system of quality control.

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Breeder

Public Sector Variety’s Supply chain

Seed Production

Coordinated Variety Release Committee

DEVELOPMENT & TESTING

State variety release committee.

Certified Seed

Marketing

Foundation

Notification by sub-committee on crop standards, release an notification.

The Role of Private sector in Indian Seed Industry

The Private seed industry is now undergoing a transition following the Indian government’s focus on biotechnology research, as a means of increasing agricultural production and also driven by trends in the domestic and world seed market.

The Private seed sector now comprises some twenty or so large players (with sales turnover exceeding Rs. 200 million), several medium companies (sales turn over between Rs. 200 million and 20 million), and a large number of small, unorganized players (sales turnover less than Rs. 20 million) with local presence.

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Private Sector Variety’s Release supply chain

I) Testing of public variety’s release

Seed production

Marketing

Certification

II) Development and Testing of private sector developed varieties

[NO SYSTEM OF RELEASE AND NOTIFICATION THROUGH PUBLIC SECTOR CHANNELS]

[NO SYSTEM OF RELEASE AND NOTIFICATION THROUGH PUBLIC SECTOR CHANNELS]

Seed Production …..

Marketing

The Competition level between Public &

Private sector in Indian Seed Industry

Availability of breeder seeds by Public and private sector.

New varieties are developed by SAUs, ICAR institutes, and private seed companies.

Effectiveness in getting the research result out to farmers by Genetically Modification technology

Considering licensing/royalties/exclusive rights by public and Private sector.

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Continue….

Mainly focus on mainly on hybrid seeds by both Sector.

Source: Advanta India Ltd.

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Current structure of Indian Seed Industry

Source: Advanta India Ltd.

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Market share of Major seed player in India

Market share of key Indian seed industry

Ankur, 4%

Pioniar , 5%

Syangenta, 5%

Advanta India, 5%

Ganga kaveri, 6%

Nuziveedu, 8%Namhhari, 8%

Proagro, 8%

Monsanto, 11%

Emergent , 14%

Mahyco, 14%

Indo-American, 3%Nath, 1%

EDI parry , 1%

Seminis, 3%

JK, 4%

Mahyco

Emergent

Monsanto

Proagro

Namhhari

Nuziveedu

Ganga kaveri

Advanta India

Syangenta

Pioniar

JK

Ankur

Seminis

Indo-American

EDI parry

Nath

Source: Advanta India Ltd.

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Main Market Segments of Indian Seed Industry

• Food Grains seed market

• Vegetable seed market

• Oil seed market

• Cotton seed market

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SWOT analysis of Indian seed industry

Strengths

Round the year availability of raw materials.

Support from the central government and state Government.

Vast network of dealer facilities all over the country. Vast domestic market for farmers.

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Weaknesses

High requirement of working capital.( Farmer)

Low availability of new reliable and better accuracy instruments and equipments.

Remuneration less attractive for talent in comparison to other Agriculture industry.

Inadequately developed linkages between R&D labs and Seed industry.

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Opportunities

Large crop and material base in the country due to agro-ecological variability offers vast potential for seeds industry.

Integration of developments in contemporary technologies such as electronics, material science, computer.

Opening of global markets may lead to export of our developed technologies.

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Threats

Competition from global players.

Loss of trained labour to other industries.

Rapid developments in contemporary and requirements of the industry may lead to fast obsolescence.

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Five Force analysis of Indian Seed Industry

Buyer Power: (High)

There are a number seller available in the Indian seed market.

Farmer who needs to input seed at low price and high Quality.

If buyer is not satisfied with existing brand of seed so the buyer switch over to other company’s brand.

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Supplier Power: (Moderate)

Plant breeding, including genetic research and cultivar assessment.

Seed Production either in companies own dependences or by Products..

The industry is organised in public & Private entities with the objective of roles of research, production, Quality Control and Marketing.

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Threat of New Entrance: (Medium)

Research has provided new technologies

Special relevance of genetic engineering, essential component of biotechnology.

DNA technology, today the breeders dispose of all the genes of nature and also of artificial genes created in the laboratory.

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Substitute Product:

There is no Substitute available in the seed industry.

Rivalry among Industry: (High)

There are approximately 223 Companies engage in production of seed in India.

In the seed industry major players are which is covered by Mahyco is app.14 %, Emergent cover 14%, Monsanto cover 11% of the total market share.

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PEST analysis of Indian Seed Industry

Political factor

National seeds policy

Assistance for Boosting Seed Production in Private Sector.

National Commission on Farmers.

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Social factors

Seed Village Scheme.

To upgrade the quality of farmer-saved seed which is about 80-85% of the total seed used for crop production programme.

Under this programme an amount of Rs.14.77 crore has been provided during 2005-06.

Economical Factors

Inflation Interest rate

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Technological factor

R&D activity

Technology incentive

Breeding and Creation of new varieties

Production and seed technology

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Ratio Analysis of Seeds Industry ( Gujarat State )

Net Profit Ratio: Net profit (After tax) * 100

Sales

11.24

18.25

12.53

0

5

10

15

20

Figure in (%)

2006 2007 2008

Year

Net Profit Ratio

2006

2007

2008

High sales of Cotton , Oil & Vegetable Seed Produced by new Technology & New Variety which Boost the sale of seeds with low cost & High profit margin.

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Earning Per Share

Earning Per Share: Profit Before Dividend

Shareholder’s Share Capital

158

150

146

140

145

150

155

160

Figure in (%)

2006 2007 2008

Year

Earning Per Share (EPS)

2006

2007

2008

This ratio fluctuated by demand and supply of the share of seed industry.

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Expense Ratio: Expenses * 100 Sales

10

9.74

10.45

9.29.49.69.810

10.210.410.6

Figure in (%)

2006 2007 2008

Year

Expense Ratio

2006

2007

2008

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In seed industry of Gujarat expense ratio was going because day by day up-down due to cost of production decrease of new farming method adopted by the farmer’s for the seed production above graph refers as from 2006 to 2008 expense ratio is decrease-increase to 1 to 3%.

Current Ratio: Current Assets Current Liabilities

0.80.64

0.86

0.66

0

0.2

0.4

0.6

0.8

1

Figure in (%)

2005 2006 2007 2008

Year

Current Ratio

2005

2006

2007

2008

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In above graph refers that current ratio of seed industry of Gujarat state was an around 80% and it was down to 64% due to decrease in assets and liabilities in the industry. And it was higher after 2006 in 2007 upto 86% due to new entrance in the industry and in 2008 was 66% here 20% ratio down from assets and liabilities side.

Impact of WTO on Indian seed Industry

WTO concentrate on protecting the interests of the farmer in his role as producer as well as consumer of seed almost all agricultural research and plant breeding in India is financed with the taxpayers money.

UPOV introduces legal and economic restrictions on farmers’ livelihood practices for quality control in seed production.

UPOV was providing an incentive for making slight changes on existing varieties and calling them “new” and worthy of protection for seeds.

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They would also protect the rights of the farmer to sell seeds of a variety protected by a Breeders Right but the special Advantage conferred by the registered name would be available only to the breeder, not the farmer.

This right and freedom to function as the biggest, most de-centralized supplier of locally well-adapted seeds has helped India to make the transition from a grain deficient to a grain surplus nation.

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The impact from genetic modification technology

on seed industry

o Bio-safety and environmental safety infrastructure before commercial release of GM crops.

o Inter-alia, calls for up gradation of the post-release monitoring infrastructure which is the responsibility of Department of Agriculture & Cooperation In particular.

o Quality Control of GM Seeds and Crops.

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Seed supply chain in seed industry:

Source: www.seednet.com

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Factors affecting seed industry in region

Improvements in the agricultural sector in general.

Seed production.

Trade and international agreements.

Liberalization reforms.

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The expertise in public sector.

Lake of clear seed strategy.

Deficient marketing policies in some region.

Availability of trained personnel.

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Role of Contract Farming in Indian seed Industry

Since organized farming practice has become the need of the hour in the world of rapid industrialization.

The rapid industrialization process in India has created shortage of farmland, which in turn has necessitated organized farming practice in India.

Contract farming generally involves: a pre-agreed price between the company and the farmer, along with measures of quality, quantity, acreage to be farmed, and/or duration of the contract.

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Objectives of promoting contract farming

To reduce the load on the central & state level procurement system.

To increase private sector investment in agriculture. To bring about a market focus in terms of crop

selection by Indian farmers. To generate a steady source of income at the

individual farmer level. To reduce migration from rural to urban areas

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Findings:

The role of Seed Sector has been Substantial. The expansion of Seed industry has occurred in parallel with growth in agricultural Productivity.

Buyer’s power is high; suppliers are moderate, where threat of new entrance is at medium level and with no substitute product rivalry is high in the Indian seed market.

R&D expertise high in private sector comparatively than public Sector.

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Government intervention is high in Seed industry.

Technology up gradation is rapidly growing.

Contract farming helpful to Indian seed industry in terms of reduce the risk from buyer as well as supplier side.

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Continue..

Limitation of Research:

Due to this is a secondary research report to finding a proper data is taking so much time.

Due to non-availability of whole Seed industry financial data we analyze only Gujarat state as represent the Seed industry.

Some data is still we will add for future research and for further study.

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THANK YOU