In interaction with G V Bhaskar Rao, Chairman and Managing Director, Kaveri Seeds Company Ltd.
Speaking with DSIJ, G V Bhaskar Rao, Chairman and Managing Director, Kaveri Seeds Company Ltd. explains the strategy which has helped keep the company on the growth path as also the important role played by research and development. Following is the detailed discussion.
What are your top three strategic priorities?
We are a farmer-centric organisation and for us our biggest priority is the farmer’s prosperity. All that we do circles around this aspect, be it about investing in research and development to ensure seeds which increase farmer productivity and yield, investments in a robust supply chain management to ensure that the seeds reach out to the farthest of corners across the country well in time for the sowing season, and investments in relevant infrastructure to ensure longevity and germination vigour of the seeds. Over the years we have focused on building an organisation which would help the country achieve food and nutrition security while also making the farmers attain prosperity by improving productivity through unlocking the latent power of seeds via the process of ideas and science.
Today we are the only Indian seed company which has a diverse product portfolio across also all key crops like cotton, corn, rice, jowar and bajra as well as vegetables such as tomato, okra and gourds. So, we have invested significant man-hours and capital in strengthening our connection with the farmers while strengthening our research and development capabilities and infrastructure as well as diversifying our product offerings and not being dependent on one particular crop. The results of this approach are showing results.
What is the growth outlook for the coming quarters?
Our growth outlook is strong. As mentioned earlier, we have a diversified product portfolio which our vision of creating an organisation which does not have dependence on only one crop type. This has played out well given the changing climatic conditions i.e. early or late arrival of monsoons and changing commodity prices that may affect the cropping patterns for a particular year. The company has gained market share in both falling and stable markets across all crops. This determines our leadership in the entire industry.
We are encouraged by our performance and in particular the success of our new launches. Our selection rice and hybrid rice portfolios have grown strongly by over 45 per cent YoY. Vegetable sales too have grown very well on the back of strong growth in hot pepper, tomato, gourds and okra. We are optimistic of maintaining this trajectory on the back of our strong connection with the farmers, diversified product portfolio and established research and development capabilities.
What is your budget for research and development and is this expected to increase in 2021?
We know that the biggest portion of increase in agriculture production is caused by technological innovation. As a part of our sustainable growth strategy we consistently have invested in research and development. Our expenditure in research and development has doubled in the last three years. We spend close to 3.5 per cent of our revenue on research and development every year. As a strategy we blend traditional breeding techniques with advanced biotechnology, which enables us to develop superior seeds that are high-yielding under varied climatic conditions. Our research and development team comprises about 100 professionals, including more than 20 scientists and our research base is recognised by the Government of India’s Department of Scientific and Industrial Research (DSIR) since 2001.
What strategic initiatives are being taken to help improve the market share?
Our strategy towards improving market share is two-pronged. The first is at the front end which is towards engaging with the farmer and agronomists to best understand their preferences, needs and concerns and then at the back end to develop the best possible hybrids and enhance our portfolio of offerings. Along with this our thrust is towards enhancing our market reach and distribution with the objective of reaching both wider and deeper into the market.
What are your growth drivers?
Kaveri Seeds is among the top three across all crop types i.e. rice, vegetables, cotton, maize, etc. It has been our conscious endeavour to have a leadership position and significant market share in all seed segments. With the requisite infrastructure in place coupled with strong research and development we have been able to replicate our success story in cotton across other crops too. Going forward we see growth potential in the segments of hybrid rice, maize and vegetables.
We have been continuously innovating and coming up with new products to cater to the agro-climatic conditions across India and also the export markets that we operate in. We have also been expanding our geographical footprint by entering new regions and states and also countries. We had earlier expanded our presence to Maharashtra and Gujarat and have now entered the northern states with encouraging results.
What are the challenges faced on the supply chain management front?
We have over 60,000 distributor touch-points across the country. It is imperative to have a robust supply chain management to ensure timely delivery of products across the nook and corner of the country. At Kaveri Seeds we have fostered strategic partnerships within our supply chain to ensure easy and timely availability of seeds to farmers. The big challenge on the supply chain front is to ensure that the seeds retain their quality and content for as long as possible. This ensures improved output and decreasing sales returns.
Towards this objective our investments towards extensive cold chain storage infrastructure has held us in good stead and increased longevity in the life of the seed. Simultaneously, the need is towards improving the speed at which we reach the farmer with a quality product. Better packaging and improved road infrastructure combined with increased but efficient transportation helps towards addressing these challenges.