2024 industry trends in the agrochemicals (Fertilizers, Fungicides, Insecticides, and Herbicides) industry?  

Industry trends of the last 6-8 months were not favourable and have gone through fairly difficult times rather difficult times from March 2023 onwards for the agrochemicals industry globally. The prices of almost all technical were drastically reduced & the reductions were varying from 40% to 60%.  

After Covid, since the prices were going up and up slowly & continuously, naturally there was a trend to buy more quantity during 2022-23 and to some extent agro climatic condition and commodity prices were also favourable. However, after March 23, due to normalisation of production world over including China, the prices starting dropping quickly. This has resulted in having high cost inventories of technical & finished products with the manufacturers as well as large traders & distributors world over had  high inventories as well as that also purchased at a high price. 

Since the price of technical & finished goods started dropping around March 23, there was a panic situation and everyone wanted to dispose of their high cost inventory & hence there was a sudden southward drop in prices. 

The situation became even worst because demand in North & South America (especially Brazil) seemed to have almost halved partly because of unfavourable agro climatic conditions and even lack of rain/water in many parts of the world.  Naturally the distributors & dealers then wanted to dispose of their inventory even at cost or even at loss. 

This is evident from many companies’ financial results of year 2023 and 2024. Even today after a gap of 15 months from March 23, the demand seems to be fairly slow in international business.  

As far as Indian Agro chemical market is concerned, it was stable but again the price drop made it bit difficult for most of the Indian manufacturers. What helped Industry was average last year rainfall and good commodity and crop prices hence most companies could manage well around +/- 5 to 10% of their March 23 turnovers. 

However, we are hopeful that from July 2024 things should look better and we expect reasonable turnaround & demand for exports also.  

How has SML Group (SML Limited, SUMIL, R3 Crop Care, and Nourish Ag) performed in terms of revenue and profit during FY 2023-24? What's your revenue and profit forecast for FY 2024-25? 

As already explained above, SML as a group has fared well in comparison to many of our similar industries, specially keeping in mind the market conditions.  However, SML groups export was sizably affected & the export turnover reduction was about 45% during March 24.  Naturally, the SML group’s overall profitability reduced from around Rs. 225 crore (2022-23) to Rs. 175 crore in year 2023-24. 

Capex invested by the company in FY 2022-23 and projects where investments were made? Capex investment for FY 2023-24 and projects where it would be invested?  

SML Group is continuously investing huge sums into R&D, with a completely new greenfield seven acre R&D site for various new compounds. This is one of the only kind of research site which is primarily developed for testing of new molecules which are being developed for the first time by SML group. 

SML also opened a new R&D site at New Bombay for synthesizing new chemical entities (NCE). Of course, this is a beginning but it may be difficult to calculate ROI’s for such large 3 R&D centres now being operated. 

As regards to Capex, the sixth new site at Panoli is under construction with an estimated investment of Rs. 50 crore in the first phase. 

What's SML Group strategy with respect to Biological products (Plant based or Microbial)? Biological products which you would be launching in the first phase?  

We will soon be launching innovative biological products from our own R&D facility. Hopefully, these products will be launched by Oct -Nov 2024. 

SML Group has more than 500 patents (applied and granted). How will these patents help SML Group in terms of revenue and profitability?   

SML has over 500 patents and some of these will be used by SML Group for marketing, some may be licensed or given on a royalty basis.   

Initiatives taken by SML Group for enhancing process safety across all facilities/processes to make operation intrinsically safe?  

All the SML group manufacturing facilities are world class and safety is accorded top priority at SML Group.  

Sustainability roadmap of SML Group and key sustainability initiatives of the company?  

SML has just recently received the FICCI Sustainable Agriculture award on 30th November, 2023 on the initiatives taken for agriculture based decarbonization and reduction in greenhouse gas emissions thereby increasing farm productivity. 

Major CSR initiatives being undertaken by SML Group in FY 2023-24?  

SML Group spends a sizable amount of CSR money on education and healthcare. The company printed 1.8 million notebooks of 200 pages and distributed them pan-India in more than 3,500 rural schools. Similarly, during two years of COVID-19, SML Group made two million masks and distributed them pan-India free to farming communities, dealers, and employees.