June 13, 2018
Kaveri Seed Co. Ltd, which competes with Monsanto Co. to sell hybrid seeds in the South Asian country, is seeking a bigger share of the food crop market to reduce dependence on cotton seed, its breadwinner product.
The company gets about 60 percent of its revenue from cotton seed sales and the remainder from vegetable seeds and grains including paddy and corn. It aims to reverse the proportion in three years, enticed by profit margins that are almost double that of the cotton segment, Executive Director C. Mithun Chand said.
“Rice looks very lucrative and a big product for us in the coming years” as hybrid seeds currently cover just 6 percent of the rice paddy area, he said. “We are working hard on vegetables and want to triple our revenues in vegetables over the next 3 to 4 years.”
Due to repeated pest attacks, prospects for cotton in India have slowed despite planting hybrid varieties, while food crops have been gaining prominence due to the government’s drive to boost production. India is the world’s second-biggest producer of rice and wheat, and top grower of cotton.
Kaveri expects to grow its profits by 15 percent to 20 percent this year as higher revenues from the food crop segment offset the impact of a government-mandated cut in cotton seed prices, Chand said.
Kaveri is also looking to expand its footprint in Indonesia, Thailand, Vietnam and the Philippines where the cropping pattern is similar to India. It has set aside 3 billion rupees ($45 million) to 4 billion rupees for possible acquisitions in germplasm and other technology areas, he said.