Agrochemical maker Insecticides India Ltd (IIL) anticipates good demand in the forthcoming kharif season on expectations of good rains this year.
IIL partially resumed operations last week at all its manufacturing locations in Gujarat, Rajasthan, Jammu and Uttar Pradesh to meet the demand in the ensuing cropping season.
“We have started operating at a 30 per cent capacity. However, the availability of raw materials, manpower and the disruption in logistics is a big challenge,” said Rajesh Aggarwal, Managing Director, IIL.
Supplies from China
Aggarwal said production at IIL has been disrupted for over a quarter now as the raw material supplies from China has stopped for over two months now due to the coronavirus situation in that country.
While China resumed the shipments recently, the containers are not getting cleared at the Indian ports due to the prevailing lockdown, he said. IIL depends on China for about 30 per cent of its raw material requirement.
Further, the flight of migrant labourers back to their villages has triggered a shortage of manpower.
“It is not just the labourers, even the mid-level staff such as machinery operators have gone back to their villages on fears of the spread of virus,” Aggarwal said.
The availability of trucks, for both short and long distance movement has been a challenge, Aggarwal said.
“Even if the trucks are available, there are no drivers to drive long-distance cargo. To overcome the logistics challenge, IIL is looking at using the Railways to move the agrochemicals and pesticides, especially to the eastern parts of the country,” Aggarwal said. The pipeline with distributors and retailers is empty and the seasonal demand has started coming in.
Demand for herbicides
“To start the season, we are expecting a good demand for herbicides, seed dressing molecules, insecticides and fungicides,” Aggarwal said.
“Last year the rains were good and there was good demand for herbicides. If the same situation persists, there will be good demand for herbicides as farmers find it cheaper to use than manual weeding,” he said.
Herbicides account for about 30 per cent IIL’s revenues, while pesticides contribute to around 60 per cent and fungicides 10 per cent.
IIL’s revenues stood at ₹1,125 crore in first nine months of the current financial year.