Sharda Cropchem Ltd Management Discussions.

Economic Overview


The world economy rebounded at a healthy 6% in CY 2021, after a 3% decline during the COVID-19 pandemic in CY 2020. The reduction in pandemic-related limitations and lockdowns, and the increased vaccination effort across countries, contributed to this fast-paced recovery.

Global commerce recovered sequentially throughout CY 2021, not only in terms of products but also in terms of services, with the former reaching pre-pandemic levels in Q4 CY 2021. Altogether, global commerce hit a new high of US$ 28 trillion in CY 2021, up 25%, from CY 2020 and 13% higher than the pre-pandemic level of CY 2019.

(Source: insights/global-trade-growth-likely-to-be-subdued-in-2022-after-hitting record-high-of-28-5-trillion-in-2021/articleshow/89715595.cms)

Besides the loose monetary support policies during rising inflationary pressures, the fiscal support was partially extended in CY 2021 for complete resumption of economies. A significant upside recovery was witnessed among the advanced market owing to high vaccination rates. Advanced economies grew at 6% in 2021, more than making up for the cumulative drop in GDP in 2020. However, the Russia-Ukraine conflict further hindered global economic progress. It contributed to economic downgrades for 186 countries, although most of them will continue to grow. The war disrupted global trade in energy and grain, leading to higher risk of food shortages in Africa & the Middle East.


The economic performance of emerging market has varied considerably, since the onset of the pandemic. The goods exporters have generally fared relatively well, while service exporters have struggled amid the lack of tourism. Moreover, vaccination rates and policy choices have added to this variation. Higher rates of vaccination can ward against pandemic-related shocks to domestic demand. They also reduce risks for potential tourists and enabled policymakers to impose fewer restrictions on mobility and border controls, given better protection of their population. Although, growth in emerging market economies is likely to continue this year and the next, risks remain weighted to the downside. Another wave of infections may possibly lead to weaker economic growth, particularly for countries with low shares of fully vaccinated populations. Government balance sheets, meanwhile, have mostly weakened as the pandemic-induced recession reduced revenue. Whereas, expenditures grew as countries provided support to their populations, while their economies stalled. Further rising interest rates in the United States can weaken emerging market currencies and exacerbate inflation.


India was one of the fastest-growing economies in the pre-pandemic world. The year FY 2022 witnessed several positive moments, as compared to the crosswinds faced in the earlier fiscal. The economic growth in CY 2021 has been dented due to COVID-19 and other geopolitical reasons. The Indian economy is expected to rebound and is likely to regain its tag of one of the fastest-growing economies globally, in the medium-term.

Indian economy is expected to maintain robust growth momentum in the medium term largely driven by consumption and investment wherein consumption is anticipated to grow by 9% in FY 2022, which is slightly below previous forecast of 9%.

(Source: Fitch solutions)

Moreover, rural and urban unemployment levels continued to improve after the worst phase of the crisis. Rapid urbanisation, rising consumer aspirations and increasing government support for digitisation, Production Linked Incentives (PLI) and other similar policies are anticipated to push the growth further. At this pace, India is forecasted to be among the world?s fastest-growing economies in CY 2021. Going forward, IMF forecasts India?s GDP to grow at a faster pace than other economies.


The Indian economy is poised to maintain robust growth momentum over the coming quarters, largely driven by consumption and investment. Consumption is expected to grow at a healthy rate, underpinned by the recent easing of restrictions and a slow strengthening of the labour market. Economic headwinds could start to mount once again as several factors come together. On an average basis, oil prices will remain elevated, weighing slightly on purchasing power. The anticipation of monetary tightening over the coming quarters will lead to a slight tightening of financial conditions, and base effects will prove less flattering.

Industry Overview


In CY 2021, the worldwide Crop Protection Chemicals market was worth US$ 84 Bn. Looking ahead, the market is estimated to reach US$ 111.4 billion by CY 2027, with a CAGR of 4% from CY 2022 to CY 2027. The world population is predicted to approach 9 Bn people by CY 2050, up from roughly 8 Bn at present. Furthermore, with increased urbanisation and more people living in cities compared to the countryside, the amount of agricultural land is diminishing. In the next few years, crop protection chemicals are projected to gain higher significance in enhancing agricultural output. These chemicals are predicted to increase agriculture productivity by eradicating pests that diminish yields. This leads to higher productivity per acre and reduces the need to transform natural areas like woodlands and forests, native grasslands, marshes, grasslands, and other wildlife habitat into farmland. The Crop Protection Chemical industry has been transforming over the years, over robust growth coupled with changing crop mix trends and environmental regulations. Growing population, declining arable land, food security, and the need for augmented agricultural productivity are the significant factors driving the demand for higher agricultural output. This will lead to growth augmentation in the Crop Protection industry, globally. Brazil, the United States, China, Japan, and India are the largest Crop Protection Chemicals market in the world. The market size of Brazil crop protection chemicals in CY 2020 was valued at US$ 10.01 Bn. India has the fifth-largest market in the world, with US$ 2.59 Bn in CY 2020.


The market has been divided into four regions: Europe, North America, Latin America and Rest of the World (ROW).


The European Crop Protection industry (ECPA) made a series of bold pledges to support Europe?s new Green Deal, including a € 14 Bn investment in innovative technology and more environment-friendly products by CY 2030. The Crop Protection market in Europe is expected to register a CAGR of 4%. Increased knowledge, changes in agricultural techniques, and technology are few of the reasons for Europe?s large crop protection market share.


North America is the world?s third-largest Agrochemicals market, with the United States contributing the most income and volume. Pesticides and fertilisers are the two most important segments of the agrochemicals business, with fertilisers accounting for about 70% of sales.

(Source: release/2021/04/19/2212128/0/en/North-America-Crop-Protection-



The Latin America market is now being driven by strong development in the Agriculture sector, and the extension of cropland. Additionally, as people consume more plant- based foods, crop protection agents are becoming more necessary to increase agricultural production and promote food security. Rising levels of urbanisation and limited farmland availability, notably in Brazil and Argentina, are driving up demand for crop protection chemicals. Many government entities in Latin America are working to reduce the need to convert natural areas such as forests, native prairies, wetlands, and animal habitat to farming. As a result, crop protection agents are increasingly being used to provide high agricultural yields per land.


The Crop Protection Chemicals market in India was valued at US$ 3 Bn in 2020 and is projected to reach US$ 4 Bn by FY 2026. The market is projected to witness a CAGR of 6% during the forecast period. In India, synthetic pesticides have been extensively used for alleviating the estimated 45% gross loss of crops due to the infestation of pests and diseases. Major factors driving the Indian market, includes greater demand for food grains and limited availability of arable land, along with increasing exports, growth in horticulture and floriculture, and increasing public awareness regarding pesticides and biopesticides. The Biopesticide market is likely to witness the fastest growth in comparison to synthetic chemicals in India. It is expected to witness double-digit growth during the forecast period. This segment has more relevance today since trends show that people prefer more eco-friendly options over noneco-friendly products. Moreover, they are becoming more health-conscious.

In India, several Government agencies, such as the Ministry of Agriculture and Farmers Welfare, the Department of Biotechnology (DBT), and the Ministry of Science and Technology, have been promoting the research, development, and commercialisation of biopesticides.

Thus, with increasing demand for food grains, reduction in arable land, and increasing agricultural exports, the Pesticides market in India is booming during the forecast period. However, a shift from synthetic to bio-based fertilisers is expected to be seen in the long-run.

Global Crop Protection Market Category-wise


Herbicides is the largest type-based sub-segment of the market studied. It was valued at US$ 26 Bn in FY 2020, and is expected to reach US$ 34 Bn by FY 2026, witnessing a CAGR of 4%. Herbicides are chemical agents that are used to kill or inhibit the growth of unwanted plants, such as residential or agricultural weeds and other invasive species. The ease of application is a big advantage of chemical herbicides over mechanical weed control methods. This also helps save labour costs.


The fungicides sub-segment of the market studied, was valued at US$ 17 Bn in FY 2020, and is expected to reach a value of US$ 21 Bn by FY 2026, witnessing a CAGR of 3%. Fungicides are mostly used in fruits, vegetables, and cereals. The demand for fungicides is majorly driven by cereals and vegetables across the world. During the forecast period, the fungicides sub-segment of the market studied is expected to expand at a slower rate, than the insecticides sub-segment of the market. This is due to lesser development and lower adoption of fungus-resistant crops as compared to insect-resistant crops.


The insecticides sub-segment of the market was valued at US$ 15 Bn in FY 2020, and is expected to reach a value of US$ 19 Bn by FY 2026, witnessing a CAGR of 4%. The growing population, the rising demand for food, contracting agricultural land area, and the loss of crops, owing to the incidence of pests and diseases, are the significant factors that are driving the market for crop protection chemicals.


The bio-based sub-segment of the market was valued at US$ 5 Bn in FY 2020, and is anticipated to reach US$ 12 Bn by FY 2026, witnessing a CAGR of 15%. Increasing concerns among people regarding the food products they are consuming, along with the consequences of those on their health and the environment, is pushing the market players to shift from synthetic to bio-based chemicals. Farmers using biopesticides in their agricultural produce, lessens the chances of toxicity in the food chain. Additionally, simple residue management techniques and low R&D investments in developing new biopesticides is driving the bio-based sub-segment of the global market.


The Other Crop Protection Chemicals segment of the market is valued at US$ 1.53 Bn in FY 2020, and is estimated to reach at US$ 1.82 Bn by FY 2026, registering a CAGR of 2.4%. Other crop protection chemicals include molluscicides, plant growth regulators, dessicants, rodenticides, and acaricides, of which molluscicides, acaricides, and rodenticides form the largest share.

These products can be applied as foliar spray, granular formulation, seed treatments, or for any form of soil treatment except for rodenticides, to which they are applied as baits. Molluscicides, includes metaldehyde, methiocarb, ferrous phosphate, among others of which, metaldehyde accounted for the largest market share, followed by methiocarb. Metaldehyde is widely used in molluscicide products, because of its easy availability and inexpensiveness.


European region is stepping toward the reduced usage of chemical pesticides, which are harmful for the environment and animal population in the region. For instance, in CY 2018, EU banned neonicotinoids to protect the bees. However, this led to an increase in focus on Integrated Pest Management (IPM) practices, coupled with rising R&D on biological control substances in the region. This has substantially increased the popularity of bioinsecticide products in the recent years.

The Europe Crop Protection market was estimated at USD 27.73 billion in CY 2021 and is projected to reach USD 32 billion by CY 2026, at a CAGR of 5%, from 20222027. Crop protection is the widely used chemical across Europe to safeguard crops against various insects. The growing demand for food safety is due to stringent quality regulations that is driving the market. Increasing awareness in farming practice and technology are the reason for Europe to hold significant demand for crop protection.

The demand for biopesticides is increasing, owing to the increase in demand for organic and completely natural foods.

(Source- crop-protection-pesticides-market)


Farmers in the North American Region have increased the usage of insecticides on major crops, especially corn, as it accounts for most of the harvested acreage in the region. Thus, to address the growing concern for reduced harvest, along with environmental and human health, the farmers are judiciously increasing the usage of insecticides, fuelling the crop protection chemical sales. Besides, the United States is also a major contributor to the increase in global demand for fungicides in the crop protection division.

The North America Crop Protection Chemical markets origin is synthetic and bio-based that includes insecticide, fungicide, herbicide, and other crop protection chemicals. The North America Crop Protection Chemical market is expected to clock at USD 43 billion by CY 2026 at a CAGR of 5%, from 2022-27. The worldwide pesticides consumption is more than two Mn tons per year and

North America accounts for 25% of the global share.

This chemical is used for crops, including cereals, grains, pulses, fruits, vegetables, oilseeds, and non-crop plants like ornamentals and turfs.


Latin America is the world?s second-largest contributor, accounting for more than a quarter of worldwide market share. The Agricultural industry in this region has had enormous growth, with substantial increase of farmland, allowing the Crop Protection Chemical market to grow at a record pace of 6%. Crop protection chemicals are predicted to reach a market worth of USD 20,000 Mn in Latin America. The herbicides category, dominated the market, accounting for more than half of the sales. This category is predicted to develop at the quickest rate throughout the forecasted period, with a CAGR of 4%. Despite its large market share, this area is very susceptible to exchange rate and value fluctuations owing to political and economic factors. Closed economies and tax increases have an indirect impact on the crop protection business. Due to its large market share, the herbicide business in the region has experienced multiple mergers and acquisitions by various corporations.



According to the Food and Agriculture Organization (FAO), the world population is expected to grow by over a third, or 2 billion, between 2009 and 2050. At the same time, per capita income is also projected to grow across the world. With the increasing per capita income and growing population, the demand for food is also estimated to grow, globally. For instance, as per FAO, the food demand in the United States is expected to increase by 50-90% by 2050. Many factors, such as climate change, the outbreak of pests, lack of investments, and limited agricultural land, makes it challenging to produce enough to ensure food security. Due to the increasing population, global food production needs to increase by about 70% by 2050 to meet the growing food demand globally.


In response to the growing need to meet food sufficiency and the importance of safe farming practices, the global Organic Food industry has recorded exponential doubledigit growth rates. Over the last three decades, organic food and farming have continued to grow across the world. Since biopesticides are chemical-free, they are used on a large scale in organic farming. Hence, the market demand for biopesticides is increasing with the growing popularity of organic food and beverage products across the world.


Genetically Modified (GM) crops were first introduced in the United States in 1996. At presently, these crops are widespread in the United States and worldwide. Many products, including corn meal, oils, and sugars, are derived from these crops and are being commonly used for food preparation worldwide. Famers have accepted GM seeds, as their benefits exceed their costs. However, the adoption of these crops boosted the use of crop protection chemicals, due to the increase in difficulty to kill insects.


The number of pests in different crops across the world is rising, and there is a tremendous increase in the number of pesticide-resistant pests. Crop protection chemicals can be used to control a variety of pests. However, over time, they lose their effectiveness as pests develop resistance, which reduces the field performance of the pesticides. Reliance on insecticide-based pest management of insect pests often leads to the development of insecticide resistance.

Business Overview

Sharda Cropchem (The Company, We) is engaged in marketing and distribution of formulation and generic active ingredients in 80+ countries, 500+ third-party distributors, and 400+ sales force. We are among the fastest-growing global agrochemicals company among the similar performing ventures. The Company has adopted an Asset-Light business model, which enables us to offer diversified range of formulations without incremental manufacturing capex. The business drives into 2 business verticals - agrochemicals business and non-agrochemicals business.

We are also involved in order-based procurement and supply of non-agrochemical products, including variety of conveyor belts and v-belts that are mainly used in mining projects, dye intermediates and general chemicals dyes. The Company has business across Europe, NAFTA, LATAM and RoW.


The Company aims at penetrating deeper into both agro chemical and non-agro chemical space, basis enhanced capacity and stronger marketing and distribution network, spanning across advanced and high-barrier market.


At Sharda Cropchem, our core business to protect crop with generic active ingredients and formulations, via strong marketing and distribution channels.

Third-party manufacturers provide the Company with completed formulations and generic active ingredients for resale. The Company obtains generic active ingredients for the development and marketing of formulations, outsourcing the formulation preparation process to third- party formulators. This allows us to provide a diverse range of formulations and generic active ingredients in the fungicide, herbicide, and insecticide segments to protect various crops. Besides, we also serve turf and specialty markets, and disinfectants in the biocide segment, thereby, meeting a wide range of market demand.


In Non-agrochemical division, Sharda Cropchem has built portfolio with supply of belts, general chemicals & dyes and dye intermediates. We procure non-agrochemical products from Chinese and Indian manufactures and supply to our channel partners.

Business Strategy and Outlook


We at Sharda Cropchem, have distinct business model that enables us to stand out in the industry, capitalise on scale and quickly re-deploy our resources. With the help of the model we continue to identify generic molecules going off-patent and investing in preparing dossiers and seeking registrations in own name.


We are leveraging our market presence and execution capabilities. The Company is adopting the factory-to- farmer approach and aspires to be a one-stop solution provider. We actively boarded our strategy in Mexico, Poland, Italy, Portugal, USA, India, Colombia, Hungary, and Spain.


Our business is growing year-on-year, backed by expansion of geographical reach using existing library of dossiers.

We are tracking and penetrating in the existing markets and entering new markets. We are using two-fold strategy approach to pull our business.

Focus on operational efficiencies

We are moving our focus on revenue generating investments and margin improvements. The Company measures the proportion of costs incurred during an economy or financial activity, where lower costs equate with greater efficiency. Our business is highly scalable that makes it more attractive with efficiency. With this we are eliminating Non-value added (NVAs) and moving towards better cost management.


Increased productivity and value-addition in food systems

Enhanced natural resources and used efficiently

Fostered inclusive economic growth and improved livelihoods

Enhanced the flexibility of communities, people and ecosystems

Adapted governance to new challenges

Sustainability is a macro-term that comprises human right, quality of life and health. The Agrochemical industry is directly or indirectly connected with the environment, ecosystem, food system and community as a whole.

The advancement in technology is driving sustainability across value chain and Agrochemical industry. Agricultural institutes and R&D are taking a step ahead and practicing towards sustainable agrochemical practice. The demand for organic food is increasing by double-digit because of multiple health benefits. The growth is mainly due to the companies resuming their operations and adapting to the new normal while recovering from the pandemic. The Organic market is expected to reach USD 380.84 billion in FY 2025 at a CAGR of 14%.



Agrochemical industry forms a macro part of growing economies with new technology globally, that is changing face of food production. It is providing wide scope in terms of smooth functioning of value chain and also helping for job opportunities globally. There are a lot more opportunities for the Company to tap into as the demand for food is increasing due to increase in global population. Further, demand for eco-friendly pesticidies, which led to an increase in adoption of herbicidies for plant growth regulators and fungicidies gives additional opportunities for the Company. Agriculture has always been a bright spot and the demand for agrochemicals is expected to continue.


At Sharda Cropchem, we strive to be an inclusive workplace where our employees reflect the community, find purpose in their work, are valued, and grow and contribute to their full potential. We strive to meet the needs of our employees, shareholders, and customers through competitive rewards, policies, and practices. This supports the Company, as an employer of choice, in every market where we compete for talent.

Women are undervalued in workplace and organisations, that do not recognise this, are missing out. Not just in India, but also internationally, Sharda Cropchem employs 70-80% women. More women increase Company?s success in addition to tripling the talent pool. Women are rising to the occasion as strong leaders and taking on the extra work that comes with it, compared to males at the same level.

Women are doing more to assist their teams and promote diversity, equality, and inclusive efforts.

We onboard the right talent, that empowers Sharda Cropchem to run independently. At our management level, we carry top notch experienced people, who propels the Company with a significant competitive advantage in the emerging market and to the newer geography. In a nutshell, we believe that HRM is the key, when it comes to successfully and strategically managing people.


Foreseeing the risk and fencing it with silver lining plays a crucial role in our business. It drives in stability and adds value to the business and community as a whole. Our Risk Management System (RMS) is crafted with more than one factor, which includes, technology issues, strategic management errors, natural disasters, and adding more with changing era. We follow holistic approach to manage our risk and dilute it.

Risks Impact Mitigation
Environmental Risk Climate plays an essential role in driving our business. Foreseeing the climatic change and predicting the demand for certain chemical is tricky. We hold decades of experience in Agrochemical industry and have gained strong insights about the countries, where we operate.
Delay in Product Registrations The delay in product registration and extension of patent, may cause delay in commencing business activities. Formulations and generic active ingredients, due to the law, differ from country-to-country, leading to higher risks for the Company. We have taken multiple registrations in different geographies and are also expanding our product portfolio.
Operational Risk The value chain of our business comprises of people, system, process, external and internal events, legal and compliance risk. These are integral to the business operations. Any lapses thereon may lead to business interruptions. We have process in place to review these operational risks periodically and align our business strategy to mitigate such risks.
Changes in Government Policies The mandatory rules and regulations might affect our decisions. Polices, like contraction of incentive and subsidy, new export policy for crop, impacts on business activity. The constant change leading to continuous modifications is the challenge. We have a global presence, which empowers us, while also giving us locational advantage.


The internal controls of the Company are continually reviewed from a leading and reputed external agency. This results in an unbiased and independent examination of the adequacy and effectiveness of the internal control systems, to achieve the objective of optimal business functioning of the Company. The scope of activities includes, safeguarding and protecting the Company?s assets against unauthorised use or disposition, maintenance of proper accounting records and verification of the authenticity of all transactions.

The Company has an effective compliance management system, which gives preventative warnings in case of any violations. To ensure that the management system is in conformance with the overall corporate policy and in line with predetermined objectives, the independent Audit Committee and/or the Board of Directors regularly review the performance of the Company. The Company has renowned Internal Auditors, who provides guidance in smooth functioning of risk management policies. The Internal Auditors do so by building an organisation wide awareness of risks across businesses and corporate functions, developing formal reporting and monitoring processes, building risk management maintenance plans that would keep the information updated and refreshed, deploying an ERM framework in key business areas and corporate functions, aligning risk management with the business planning exercise and aligning the role of assurance functions.