American Journal of Economics and Business Administration 2 (2): 160-168, 2010

ISSN 1945-5488
© 2010 Science Publications

Strategy in Turbulent Environment: A Case Study of

Indian Domestic Company
1
Sapna A. Narula and 2K.M. Upadhyay
1
Department of Policy Studies, TERI University,
10, Institutional Area, Vasant Kunj, New Delhi, India
2
Department of Finance, Jaipuria Institute of Management, Noida, India

Abstract: Problem statement: This case deled with an Indian pesticide company in the turbulent
environment, which had to adopt a strategic shift due to changing environmental factors such as
increasing competition from multinationals, regulatory forces, changing technologies. The case
presented environmental situation in the industry and also described the events which led to the
turbulency. Approach: This is a teaching case written with the objective to familiarize the students
with concept of environmental forces affecting the industry in general and a company in particular.
The students were also expected to work out strategies for the said company under a given strategic
situation. The case had mainly used secondary data published in website, annual reports of the
company and also the articles and interviews published in business dailies. Results: The findings
indicated the competitive forces affecting the pesticide industry and the said company. The results
described how the domestic company had to reorient its strategies in order to cope with environmental
turbulence created by regulatory, competitive and market forces. Related diversification, restructuring,
international market entry and concentration and new product development were some of the strategies
adopted by the company. Conclusion/Recommendations: The case discussion evolved the strategies
for the company in corporate, business and functional domain and hence provides useful implications
for managers. This is a useful resource for academicians, researchers and students and can be used in
strategic management and business environment courses as a teaching case. The study opens new
vistas of business management research for the Indian as well as international pesticide industry.
Further, both case studies based as well as empirical research could be taken up to find the impact of
environmental forces on industry and the strategic reaction of the firms in the industry.

Key words: Strategy, turbulent environment, India, Indian pesticide industry, competitive forces,
corporate strategy, business strategy, strategic options, environment

INTRODUCTION marketing toxic molecules in the market. The domestic

firms had also realized the threat and turned towards
It was difficult time for the pesticide companies acquiring new products and markets and diversified
during 1995-2005, when the competitive, regulatory, into related businesses to face the competition. The
environmental, technological forces were changing fast management of Excel Crop Care was worried about the
to pose a threat to the domestic pesticide companies. future, as the present products and markets did not offer
The environmental situation changed so fast that firms many promises. Obviously, the situation demanded a
had to struggle hard for maintaining market share and strategic change in order to win the competitive race:
profits. Excel Crop Care, a domestic firm, also found it
hard to thrive amidst this turbulent environment with its The recent worldwide spurt in food grain
reliance on only a few maturing generic molecules, prices and food grain shortages have brought
traditional sales force and marketing practices. It was farming into sharp focus. The agriculture
difficult to match the competition posed by sector is expected to receive due importance,
multinationals with new generation molecules and funding and growth impetus. With forecast of
strong marketing capabilities. Also, by this time, the near-normal monsoon in the current year, the
environmental stakeholders started criticism of firms short-term outlook for the agrochemicals
Corresponding Author: Sapna A. Narula, Department of Policy Studies, TERI University, 10, Institutional Area, Vasant Kunj,
New Delhi, India Tel: 91-11-26122222
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industry and your company appears reasonably consumption of pesticides, followed by fungicides
good. Exports continue to remain focus area of (18%), herbicides/ weedicides (16%) and others (5%).
growth for the company and it continues to Any insecticide which is to be manufactured, marketed,
make efforts to strengthen its presence the exported or imported in the country has to be registered
existing export markets and penetrate new with the Central Insecticide Board. A Registration
markets (A.C. SHROFF, Chairman, Excel Committee (RC) has been constituted under Section 5
Crop Care Mumbai, 30th April, 2008) of the Insecticides Act, 1968 to register insecticides
after scrutinizing formulae, verifying claims of efficacy
MATERIALS AND METHODS and safety to human beings and animals. The per
hectare consumption of pesticides in India is estimated
This case study deals with the situation of the at 0.5 kg which is not uniform and varies vastly across
company faced during 1995-2005. The data for the case the country with the agro-ecological settings, cropping
has been collected from mainly secondary sources. The pattern, irrigation facilities, intensity of pests and
data on pesticide industry has been collected from diseases, resistance and resurgence of insect pests.
Indian Crop protection Association, Directorate of Plant Cotton, paddy, vegetables and fruits are major crops
Protection & Quarantine, Indian Chemical Statistics etc. where pesticides are used. Cotton accounted for 45% of
The data on the firm has been collected from last ten pesticide consumption in India, followed by rice (23%),
years annual reports and websites and other relevant f1(9%), vegetables (7%), wheat (6%) and pulses (4%)
literature of the company. The data has also been in 2001-2002, whereas presently paddy is the highest
collected from media reports and mangers’ interviews. pesticide consuming crop with 29% share followed by
Through the given data on pesticide industry and firm, cotton with 26%. Oilseeds, fruits and vegetable markets
we present a situation in the industry as well as the said are growing.
firm in order to find out how managers (students) will The industry has mainly two strategic groups i.e.,
react to this particular strategic situation. Domestic companies and multinationals. Domestic
companies are mainly fully to partially integrated,
RESULTS manufacture mainly generic molecules and market their
products in both domestic as well as export markets.
The pesticide industry in India: The products of the Indian companies are also having low cost
Indian pesticide industry are used as agricultural inputs manufacturing base for generics, which give them a
to protect the crop from harmful pests and diseases competitive edge in global markets. Besides this,
besides having other professional uses such as public domestic firms have innovated in process based
health, animal health and construction purposes. The research and possess the knowledge to manufacture the
industry has been essentially involved in the production product at very low cost. At home front, these firms
of generics and is the second biggest producer of active have strong marketing capabilities backed by intensive
ingredients in Asia, next only to Japan and is ranked distribution channels and field force. Multinationals
12th in the world. Around 80-85% of indigenous enjoy the strong research capabilities of their parent
production and balance of technical pesticides are being companies and had innovative patented solutions.
imported. The pesticide industry in general has large These are not backwardly integrated companies, but
domestic market, but a wide export market also exists. quite lately they started recognizing India as a
Insecticides are the largest product sector contributing manufacturing base and set up manufacturing facilities
to 59% of the total market. Around 144 insecticides are for supplies across the globe. The MNC’s spent heavily
approved for use on crops. The key crop outlets for on brand promotion, which helped them establish in the
insecticides are cotton and rice, which account for market within a very short period (Narula and
about 45 and 23% respectively of the total value of Upadhyay, 2008a).
insecticide sales (Narula and Upadhyay, 2008a).
It is one of the most dynamic generic pesticide The paradigm shift in pesticide industry (1995-
industries in the world having a total installed of 2005): The pesticide industry passed through a phase of
technical grade pesticides to the tune of 125 thousand paradigm shift during last decade, which was induced
MT .It has ten multinational companies and 400 by environmental pressures due to maturing products,
pesticide formulators (large, medium and small Scale). outdating technologies, rising environmental concerns
Pesticides are classified into insecticides, fungicides from society and other concerned stakeholder groups.
and herbicides/weedicides. Insecticides dominate The entry of multinationals with new generation
consumption with around 59% of estimated products in the market during early nineties also posed
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a threat to Indian firms already fighting with mature During 1995-2005, the prices of generic molecules
products and regulatory concerns. A major sector of the crashed down in the market. These molecules were
Indian market was also dominated by unorganized either at the mature stage or were facing competition
sector. The hypercompetitive situation due to brand from new molecules. New molecules which were being
clutter and alternative products and solutions had launched by multinationals or other Indian giants
squeezed the company margins. Introduction of Bt commanded premium price. Their bargaining power of
Cotton in the market had also ushered in technological the consumer was increasing alongside
revolution negatively impacting the sale of pesticides. hypercompetition in the market owing to increase in the
The last decade had also seen consolidation in global number of brands offered. The usage pattern of
pesticide industry which has strengthened their Indian different product lines was continuously changing.
multinational arms with respect to product portfolio and Insecticides had been occupying a major share in the
market functions. These companies such as Bayer, pesticides sales. The use of weedicides in India was
Syngenta, BASF, Monsanto in fact had expanded their initially less because of cheap availability of manual
portfolio through mergers and acquisitions. Similarly, labor to remove the weeds. This trend was in contrast to
realizing the need for having more innovative solutions world pesticide market, which had a major share of
rather than mere generic ones, Indian companies had herbicides in total pesticide sales. Out of the total 144
also started acquiring product/brands in India as well as pesticides registered, there are 63 insecticides, 23
other markets. The firms were also looking for herbicides, 37 fungicides, which also show the
opportunities in other related sectors such as seeds, dominance of insecticides in pesticide use scenario. But
hybrid seeds, biotechnology products. during late nineties, the sale of weedicides and fungicides
Companies were being criticized by environmental grew up with commercialization of some crops such as
groups for manufacturing harmful pesticides which soyabean, oilseeds, fruits and vegetables. These
gained the public voice since the report on segments offered new opportunities for new molecules.
contamination of cold drinks and mineral water with The statewise consumption pattern shows UP., West
pesticide residues by Centre for Science and Bengal, Uttarakhand, J and K as emerging markets of
Environment (CSE). Due to rising environmental pesticides. Top five pesticide consuming states in 1995
concerns in society and among consumers, there was a were Andhra Pradesh, Uttar Pradesh, Punjab, Haryana,
Gujarat and Maharashtra which contributed to 56.55% of
great hue and cry to withdraw use of persistent
the total pesticide consumption. Whereas in 2005, top
molecules. With a view to review the continued use of
five pesticide consuming states were Punjab, Haryana,
pesticides in India that are either banned or restricted UP., West Bengal and Maharashtra. (Narula et al.,
for use in other countries, the Government of India set 2008a).
up an Expert Committee, which took a few important The industry had huge installed capacities for
measures during last few years, as it reviewed many generics with very low capacity utilization. Insecticides
pesticides and banned/phased out some of the toxic dominate the production dominated by fungicides and
molecules. The fate of some important molecules such as herbicides. The industry manufactured 43 molecules in
Monocrotophos and Endosulphan was under the preview 2005, most of which were off-patent products like
of the expert committee. The threat intensified with the Malathion, Monocrotophos, Phorate, Endosulfan,
entry of new technological substitutes such as Bt cotton, Acephate, Chlorpyriphos, Mancozeb and Isoproturon.
which had established themselves in the market. (Table 1-3).

Table 1: Usage pattern of pesticides tech grade for domestic agriculture use (000 MT)
Year Insecticides Fungicides Herbicide Others Total
1995-96 35.9 (53.1) 19.1 (28.58) 10.5 (15.71) 1.46 (2.18) 66.9
1996-97 32.4 (48.54) 20.8 (31.26) 10.6 (15.93) 1.84 (2.80) 65.6
1997-98 40.0(48.87) 26.0 (32.18) 12.9 (15.77) 2.8 (3.43) 81.7
1998-99 62.4 (57.99) 30.2 (28.06) 13.7 (12.81) 1.20 (1.12) 107.5
1999-00 59.1 (59.15) 28.2 (27.98) 11.6 (11.54) 2.0 ((2.20) 90.9
2000-01 25.7(60.47) 8.3 (19.52) 7.3 (17.17) 1.2 (2.82) 42.5
2001-02 28.5 (61.15) 8.3 (17.81) 7.3 (15.66) 2.5 (5.36) 46.6
2002-03 28.5 (57.00) 8.5 (17.00) 8.5 (17.00) 2.5 (5.00) 50.0
2003-04 35.4 (70.80) 7.9 (15.8) 3.9 (7.80) 2.8 (5.60) 50.0
Compiled from sources such as Indian chemical statistics, 1995 and 2000 and directorate of plant protection and quarantine, 2005. Figures in
parentheses indicate the percentage shares of product lines

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Table 2: Major world exporters of pesticides

Value of exports (US$ mn) Share of world exports (%)
------------------------------------------------------------- -------------------------------------------------------------
2001 2002 2003 2001 2002 2003
France 1,477 1,573 1,861 13.9 15.3 15.0
Germany 1,510 1,539 1,796 14.2 15.0 14.5
US 1,547 1,547 1,457 14.5 15.1 11.7
UK 981 1,023 1,098 9.2 10.0 8.8
China 549 592 730 5.2 5.8 5.9
Switzerland 598 460 696 5.6 4.5 5.6
India 288 306 375 2.7 3.0 3.0
Others 3,695 3,231 4,410 34.7 31.5 35.5
TOTAL 10,644 10,271 12,423 100.0 100.0 100.0

Table 3: Exports of pesticides from India

Exports-MT (9M) Exports-Rs. million (9M) Realizations-Rs. kg−1 (9M)
----------------------------------------------------- --------------------------------------------------- --------------------------------------
FY 2002 2003 2004 2005 2002 2003 2004 2005 2002 2003 2004 2005
Insecticides 37,816 42,978 49,072 35,255 12,197 13,305 14,562 10,751 323 310 297 305
Fungicides 7,515 7,682 12,083 10,568 722 814 1,362 1,558 96 106 113 147
Herbicides 2,237 2,093 3,032 2,641 381 436 424 383 170 208 140 145
Others 2,517 2,940 4,794 3,601 264 320 1,107 718 105 109 231 199
Total 50,085 55,693 68,981 52,066 13,565 14,875 17,456 13,410 271 267 253 258
Compiled by INGRES, 2005

Table 4: Financial performance of Excel Crop care Ltd. (Rs. mn) The company was equipped with fully integrated
Mar. 05 Mar. 04 Mar. 03 production linked to the development of process
Sales turnover 4154.80 3169.10 2825.20 technology appropriate to the needs of its customers.
Total income 435.42 321.00 295.19
Profit before interest, 45.95 30.32 22.69 Excel is known for acting as a responsible corporate
depreciation and tax citizen and is also known for recognizing the need to
Profit after tax 22.22 10.38 3.84 have sustainable and environmental friendly agricultural
Source: Annual reports processes. The research processes at Excel has helped
minimize some of the effects of chemical fertilizers and
About Excel Crop Care Ltd: Excel Crop care is one insecticides in farms. The company’s initiatives in the
of the major domestic players in the pesticide industry field of Integrated Crop Management Systems (ICM),
and is also one of the leading exporters of technical and Integrated Pest Management Systems (IPM), Good
formulations. Excel Crop Care came into existence Agricultural practices (GAP), Total Water Management
when agribusiness division of Excel Industries was and Drip Irrigation have been well known in the field of
hived off in 2002 into a separate arm. Earlier, the agribusiness. The company has also been trying to
pesticide business of the company was under Excel harness the power of leading technologies in the field of
Industries Ltd. which used to primarily manufacture agricultural biotechnology for the betterment of farmers.
high quality chemicals relevant to the needs of The company was also supported by the other businesses
Industry and agriculture. The products of the of the group company Excel Industries Ltd (Narula et al.,
company, which are pesticides and pesticide 2008b).
intermediates, are marketed all over India and are
exported to over fifty countries around the world. History: Excel Crop Care was formed after the crop
Excel has expanded its activities to provide the protection of Excel Industry was hived off to form
farmers with a broad range of products and technical Excel Crop Care. The erstwhile Excel Industries
guidance. This ranges from initial conditioning of the Limited started off in a kitchen laboratory in 1941 as a
soil, through preparation for planting, seed selection, private limited company and became Public Ltd.
irrigation, pest and insect control, maximizing Company in 1965. Earlier Excel Industries Ltd handled
productivity and harvesting and post harvest the pesticide business. Excel Industries was originally
management. Excel was also the first company in Asia incorporated as a partnership firm in 1941 and became
and third in the world, to make Endosulfan technical public in 1964. The pilot plant for the manufacture of
and first in Asia to make butene diol-a major Endosulfan was commissioned in 1976. A plant was put
intermediate of Endosulphan. It is second in the world up for the manufacture of aluminum chloride in the
to develop Glyphosate technical (Table 4). same year. In 1978, the company concluded two more
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agreements for supply of technical know-how and Ltd. Though this is the main company dealing in
engineering services for the manufacture of malathion pesticides, but the integration of group activities,
with FICOM Organics, Ltd. and Khatau Jhunker, Ltd. mainly the activities of Excel Industries Ltd. becomes
Another plant was installed to manufacture glyphosate, important to study. The operations of Excel were
a weedicide was started in 1985. In 1986, the butene- organized into four divisions with agrochemicals
diol plant with 600 TPA capacities was commissioned division being the largest contributor to the sales
with an inbuilt facility for generation of acetylene gas. revenue and profits of the company. Endosulfan, a
It was proposed to set up a 16,000 TPA plant for the broad-spectrum pesticide was the major revenue earner
recovery of high-alumina refractory grade cement from of the company.
the company’s phosphorous operations.
The Company entered into new business like Chemical business: The Chemical business begins
micro-irrigation systems, seeds and biofertilizers from the extraction of Elemental Yellow Phosphorus
through a combination of marketing and manufacturing moving to downstream phosphorus based compounds
efforts. The company also started offering technology like Phosphorus Pentasulphide, Phosphorus
in tackling the ever-mounting menace of waste in cities Trichloride and DETC. Another field of activity in
and town. The capacity of the plant to produce Butene which the company is engaged in is Fine Chemicals,
Diol was expanded. The Company also undertook to primarily products like Acetyl Chloride. It has
further modernize its major plants to improve the developed certain chemical strengths, which has been
operational performance. In 1995, The Company put in good use in the area of agrochemicals. The
commissioned a windfarm project at Rajasthan with an company has the core of its strength is chemical
installed capacity of 2.7 MW. In 1996-The Company knowledge and during the last two or three years, it
had carried out expansion of production capacity of has consciously put its chemical knowledge to good
yellow phosphorous at Bhavnagar unit and Glyphosate use by looking at the portfolio available in the various
at Roha unit. In 1997, The Company also prospective market segments.
commissioned a new pesticide formulation unit at The company has been dealing in intermediates, in
Silvassa in the Union Territory of Dadra and Nagar water treatment, soaps and detergents, lubricant
Haveli to manufacture Glycel 41% SL and exports to additives, textiles, dyes and plastic additives, Mining
add facilities in future to manufacture other chemicals and specialty chemicals. In the chemicals
formulations. The company held a major market share division also the company has been looking both at the
in Endosulfan and Glyphosate pesticides. It also domestic and the export markets through alliances.
developed expertise in organic soil enrichers, drip Contract manufacturing is one of the major activity,
irrigation system and pest control products. In 1998- which the company is pursuing. In this division, the
ISRAEL’S Netafim, a US$ 200m turnover micro company is building strengths, which are already
irrigation company entered into a joint venture with available within the company and is looking at new
Excel Industries Limited, the Mumbai-based market segments, newer chemistry and widening its
manufacturer and exporter of agrochemicals and portfolio (Narula and Upadhyay, 2008b).
Jalbindu Agritech Pvt Ltd, an Umargaon-based
manufacturer of drip irrigation systems. Excel Environment and biotech: Excel developed
Industries, pioneers in recycling wastes into fertilizers, biodynamic products and processes for dealing with
planned to expand business worldwide particularly in environmental problems encompassing municipal solid
Asia and the Pacific region. Excel commissioned a pilot waste, putrescible wastes from the agriculture,
plant for herbal extraction at its production site at Lote horticulture and aquaculture industries, sewage sludge,
Parashuram and entered into a co-marketing industrial waste streams and contamination of soils and
arrangement with Danish multinational Cheminova for waters by hydrocarbons and other organic compounds.
its Glyphosate-based formulation, a systemic Its activities include sanitization, bio-conversion, bio-
weedicide. remediation and bio-augmentation. This division has
Excel Crop Care became a frontrunner in providing developed a process consisting of isolation of friendly
environment-friendly solutions and a pioneer in microbes that convert city waste into bio-organic soil
bringing Integrated Crop management in the country as enricher called Celrich. . This technology is unique in
well. The company developed a process to convert city that it solves two problems at the same time. One, it is
waste into bioorganic soil enricher called Celrich. In solving the garbage management problem. And
2002, the company’s agribusiness division was hived secondly, the product that comes out of the treatment of
off into a separate arm in 2002 i.e. Excel Crop Care garbage is a value-added product.
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The company is having unique technology through company followed many strategies to combat the
which it has provided to many others and also having environmental pressures related to the product. These
its own plants. The company has established plants by strategies have been discussed as under.
providing assistance to municipal corporations like The company was fully integrated as it
Puri, Mysore, Calicut and Trivendrum and provided manufactured technical pesticides, formulations and
technical know-how to local entrepreneurs who have pesticide intermediates, which has been the largest
set up plants in cities like Vijaywara, Ahmedabad, contributor to the sales revenue and profits of the
Calcutta and Delhi. company. The technical pesticides contributed 42% to
The company is also having a life sciences the sales revenues of the company. It was one of the
division. All these four group businesses had some largest producers of Endosulfan technical, a broad-
kind of synergy with each other. While agrochemicals spectrum pesticide in the country. Other major
formed a major part of the business handled through a products contributing to the revenues of the company
separate company, the company is not only are Glyphosate, Chlorpyriphos, Zinc Phosphide and
Aluminium Phosphide. The company is diversifying
agrochemicals-related, but it has other divisions also.
into fungicides and weedicides, whereas earlier it was
And while the chemicals division makes agrochemical
only selling insecticides. It introduced some new
intermediates, it also makes other chemicals, which products such as Profenophos including some
has nothing to do with agri business. Similarly, one of outsourced ones. The company also added
the products of the environmental division is agri biopesticides to its product portfolio and has launched
input, but its major business is waste management. some products, which can be used in Integrated Pest
Management and Integrated Crop Management
Sales performance of Excel Crop Care: Excel was practices (Narula and Upadhyay, 2008a; 2008b).
ranked among industry leaders with a turnover of The company is among the world’s leading
Rs.3924.54 million. The sales showed around 13% manufacturer of Endosulfan, Glyphosate,
increase in 2003-2004 and a further increase of 31% Chlorpyriphos, Aluminium Phosphide and Zinc
in 2004. The financial performance of the company Phosphide. In 1994, Excel became the first Indian
has been presented, which show the positive trends in agrochemical company to be certified ISO 9002. Four
the turnover of the company. Profits were also of the major plants were ISO 9002 certified and two of
increasing for the company. Performance of the the sites had ISO 14001 certification. The company had
company was encouraging in year 2003-04 due to achieved over hundred product and process
better exports resulting from the initiatives taken for breakthroughs The quality consciousness of the
the development of export markets and widespread company is not limited to the manufacturing. Each of
monsoon helping to sustain domestic sales. The the manufacturing locations had a well-equipped R and
company’s net sales during the year 2003-2004 was D facility where eco-friendly chemistries for crop care
Rs. 290.17 crores compared to Rs. 256.99 crores in and effective formulations, technologies and recipes
the previous year registering a growth of 12.91%. were explored (Table 7).
Exports were at Rs. 96.32 crores grew by 42% as
compared to Rs. 67.68 crores in the previous year. The Product mix of Excel Crop Care: At that time, the
sales turnover increased from 282.52 Rs. Crore to company was having a few technical as well as
316.91 in 2003-04 and to Rs. 415.48 crore. The profit formulated pesticides. It was manufacturing three
also showed a phenomenal increase of two and half insecticides, one herbicide and two fungicides. Some
times (Annual Reports, 2002-05). other products were only traded. But the company
enjoyed a very good market share in some of its
products such as Endosulfan and Glyphosate (Table 5).
Product line offered by Excel: The Company
manufactured only a few chemicals. As the Table 5: Share of different products in total turnover of Excel Crop
multinationals made their entry into industry, Excel Care Ltd
Product name Share of product in total
Industries was threatened as they had only a few mature turnover of the company
products viz., insecticides catering to the needs of Chloropyriphos 20 EC 5.73
farmers. Other companies not only came with new Endosulfan 35 EC 50.05
proprietary molecules, but they also tried to strengthen Profenophos 50 EC 6.53
their position in domestic market. Excel’s flagship Sulphur 80 WP 2.30
Glyphosate 41 SL 8.37
product Endosulfan was also under stakeholders’ Zinc Phosphide 20.10
scrutiny as a few deaths were reported among the Aluminium Phosphide 10.00
cashew nut farmers in Kerala. As a result of which the Source: Pesticide Association of India, 2005
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Table 6: Countries where Excel Crop Care products are exported Excel is one of the leading companies exporting to
AMERICA: USA, Mexico, Haiti, Argentina, Chile many nations across the world. Its technical actives as
EUROPE: Belgium, Bulgaria, Germany, France, UK, Spain,
Italy, Netherlands, Greece
well as the bulk and branded formulations are presently
AFRICA: Kenya, Zimbabwe, Sudan, Egypt, Ethiopia, registered and marketed in Asia-Pacific, South Asia,
Tanzania, Ivory Coast, South Africa, Djibouti West Asia, Africa, Europe (West and East including
MIDDLE EAST: Iran, Saudi Arabia, UAE, Oman, Cyprus, Turkey, CIS countries), Central and South America and the
Israel, Syria, YAR
ASIA PACIFIC: Australia, New Zealand, Thailand, Myanmar,
USA. Exports accounted for about 32% of the turnover
Malayasia, Philipines, Bangladesh, Hongkong, in 2004-2005 (Table 6).
Singapore, Japan, South Korea, Taiwan, Nepal
Source: Company Website, 2005 Strategic focus at Excel Crop Care: Integration had
Table 7: Capabilities of Excel Industries limited
been an important part of the company’s strategy after
• Safe handling and use in reactions
diversification. The company was a long-term
• Reactions of hazardous and toxic materials like Yellow integrated player as it is also in the manufacturing of
Phosphorus, Hydrogen, Chlorine, Hydrogen sulphide, Calcium raw material such as phosphorous and its compounds,
Carbide-Acetylene, Ethylene, Phosphine, Phosphorus pesticide intermediates, pesticide technicals and
trichloride, Phosphorus pentachloride, Phenol, Flammable
solvents,
formulations. This is also a part of company’s cost
• Handling of toxic wastes through, reduction at source, chemical reduction strategy, which was desirable from any
treatment, bio-reactors and incineration. pesticide company in such type of environment The
• Handling of city waste and converting into, an organic manure, focus on formulations also enabled the company to
which in addition to providing natural nutrients to plants, is also effectively leverage its solid brand equity in the rural
capable of improving soil Quality in terms of porosity and water
retention. India. The backward integration enabled it to have a
• Handling of sewage water for treatment and recycling. very competitive cost structure. Due to its low cost
• Providing guidance on Integrated Pest Management and structure many MNC’s sourced their requirements from
Integrated Crop management for optimal use of crop protection Excel (Table 8).
chemicals for better yield with less chemical residues.
Integrated Crop Management (ICM), which combines DISCUSSION
Integrated Nutrition Management (INM) and Integrated Pest
Management (IPM) together in a systematic manner, are
Challenges before Excel Crop Care: With the given
demonstrated in Excel’s Product Mix, Marketing Strategies and
Field Extension work on a multi crop, nationwide level situation during 1995-2000, it was evident that the
• Ability to provide guidance on establishing ISO 9000, ISO company had strengths such as huge installed
14001 and EHS systems. capacities, backward integration and holds over
• Ability to isolate and maintain various strains of microbes and domestic and export markets, whereas the future
Fungi.
• Using Tissue Culture Techniques for developing various species
scenario could affect its sales and turnover in long term
of fruits because of sole reliance on few products, very narrow
product range. Though there were more opportunities
In 2001-2002, the division launched three new lying in exports as well as in domestic markets, their
formulations under the brand names Celron, Hexzol and realization amidst the competitive clutter with current
Bipex and also strengthened its product range in the set of capabilities was a challenge. The management
export market. New agri product registrations were was deeply thinking to harness these opportunities, but
obtained for domestic and international markets, thus it seemed a challenging job with maturing products,
expanding the portfolio of pesticides. Some products, competitive turbulency, increased regulatory concerns,
which contributed maximum to its turnover such as incoming of new products and technologies. Hence, the
Glyphosate, Endosulfan, Aluminium Phosphide were in company undertook some strategic decisions which
mature stage. Endosulfan was getting negative publicity helped it gain the leadership in the industry even today.
by some environmental groups. The company was not
having any low dosage and problem specific product. Excel Crop Care today: Today, with three
The Company was putting in concerted efforts to manufacturing plants; over 1200 dedicated employees;
improve its packaging to compete, both in domestic and a range of market-leading brands; a distribution
global markets, by developing and improving high-tech network of 40000 dealers; a customer base running into
and user-friendly packaging. These efforts had also millions; and a turnover exceeding Rs.3000 million and
enabled it to automate packing lines in its various accumulated wisdom of six decades, Excel is the world
plants. Innovations in packaging were also being leader in generic chemicals. Excel Crop Care’s
carried out to minimize the competition from spurious Technical Actives, bulk and branded formulations
products. are presently registered and marketed in Asia Pacific,
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Table 8: Financial statement of Excel Crop Care Ltd. (2005-2009)

(Rs. in millions)
-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Particulars Mar 2009 Mar 2008 Mar 2007 Mar 2006 Mar 2005
No. of months 12.00 12.00 12.00 12.00 12 .00
+ Gross sales 7304.33 5660.18 4476.11 4214.51 4218.60
Less: Inter divisional transfers 0.00 0.00 0.00 0.00 0.00
Less: Sales returns 0.00 0.00 0.00 0.00 0.00
Less: Excise 453.33 463.21 353.89 363.19 341.39
Net sales 6851.00 5196.97 4122.22 3851.32 3877.21
Expenditure
+ Increase/decrease in stock -225.87 -90.24 -46.94 -3.10 -62.40
+ Raw materials consumed 4274.97 2846.39 2185.00 1981.78 2167.30
Power and fuel cost 139.13 99.59 98.02 112.54 108.13
Employee cost 432.23 328.90 283.60 301.02 256.72
Other manufacturing expenses 826.44 692.11 601.13 475.91 433.02
General and administration expenses 489.19 458.70 359.58 323.80 308.20
Selling and distribution expenses 116.62 346.48 250.12 185.92 161.46
Miscellaneous expenses 410.27 50.76 58.93 61.42 92.64
Less: Pre-operative expenses capitalized 0.00 0.00 0.00 0.00 0.00
Total expenditure 6462.98 4732.69 3789.43 3439.28 3465.07
Operating profit (Excl OI) 388.02 464.28 332.79 412.04 412.14
+ Other income 288.87 82.92 58.29 66.50 47.33
Operating profit 676.89 547.20 391.08 478.54 459.47
Interest 149.89 99.26 95.86 84.08 69.95
PBDT 527.00 447.93 295.22 394.46 389.53
Depreciation 80.96 71.57 63.69 53.46 47.59
Profit before taxation and exceptional items 446.04 376.37 231.53 341.00 341.94
Exceptional income/expenses 0.00 0.00 63.46 0.00 0.00
Profit before tax 446.04 376.37 294.99 341.00 341.94
+ Provision for tax 168.03 129.39 110.05 123.25 119.78
Profits after tax 278.00 246.98 184.94 217.75 222.16
+ Appropriations 372.04 308.42 266.44 292.89 279.91
Equity dividend (%) 100.00 100.00 75.00 75.00 75.00
Earnings per share 25.26 21.28 16.44 19.15 19.92
Book value 127.15 107.80 93.70 80.64 64.32
Source: www.indiainfoline.com

South Asia, West Asia, Africa, Europe (West and East manufacturing locations has a well-equipped R and D
including CIS countries) Central and South America facility-which is Government of India approved-that’s
and the USA. The exports presently account for about busy exploring newer eco-friendly chemistries for crop
25% of the turnover. Besides the necessary care and effective formulations technologies and
infrastructure at the plants, the company has a recipes. The company has also diversified into seed
subsidiary in Antwerp, Belgium manned by business, biofertilizers and soil enricher and other
professionals who perfectly understand the products, it has not only sustained its business, but has
requirements and specialties of customers in that part of increased its business multifold (Narula et al., 2008b).
the world.
Excel Crop Care adopts an integrated approach to CONCLUSION
manufacturing and has built world-scale capacities to The case study on Excel Crop care concludes how
make technical actives and formulations. To ensure a domestic firm had to face challenges amidst changing
quality and continuity of supply, key raw materials are technological, regulatory and market environment. It
produced by the company itself or are sourced from also demonstrates how the company successfully
associate companies. The company is among the managed to stand up in the turbulent environment and
world’s leading manufacturers of Endosulfan, even has grown stronger today as a result of its
Glyphosate, Chlorpyriphos, Aluminium Phosphide. The strategies.
main manufacturing plant at Bhavnagar is ISO 9002,
ISO 14000 and OSHAS 18000 certified and meets Questions:
statutory requirements on quality and safety. The more
recent plants at Gajod and Silvassa are equipped with • Perform a SWOT analysis for Excel Crop care in
state-of-art machinery and are in the process of light of the environmental situation during 1995-
obtaining the ISO certification. Each of the 2000
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 Am. J. of Economics and Business Administration 2 (2): 160-168, 2010

• Discuss how the environmental factors could affect Narula, S.A., K.M. Upadhyay and B.K. Sikka, 2008a.
Excel Crop care during the said period? Green Product Portfolio for Indian Pesticide
• What were challenges faced by Excel Crop Care? Companies: An Analysis based on Market
• What corporate, business and functional level Attractiveness Vs Environmental Attractiveness. In:
strategies were pursued by the firm in Short term as Green Marketing, Chakraborty and Rao (Eds.).
well as long term to attain the present position? Allied Publishers, New Delhi, ISBN: 81-84-24-
• What are the present challenges before the 355-3, pp: 404-414.
company? Narula, S.A., Sikka and K.M. Upadhyay, 2008b.
Strategy in turbulent environment: A case of
REFERENCES domestic pesticide firms in India. Proceeding of the
International Conference on Global Issues in
Narula, S.A. and K.M. Upadhyay, 2008a. Product and Business and Technology, National Institute of
Market Strategy Dilemma: How Firms in Pesticide Financial Management, Faridabad in Collaboration
Industry Shall Win the Race? In: Handbook on with University of Maryland, Eastern Seashore,
Management Cases, Sahay, B.S., Tojo USA and Modern Management and Technology
Thatcherkery and G.D. Sardana (Eds.). Allied Institute, USA.
Publishers, New Delhi, ISBN: 81-8424-390-1,
pp: 360-375.
Narula, S.A. and K.M. Upadhyay, 2008b. Product
strategy vis-a-vis environment: Are strategies of
pesticide manufacturers in India green? Proceeding
of the 14th Annual International Sustainability
Development Conference, Sept. 21-21, MDI,
Gurgaon, ERP Asia and University of Finland,
New Delhi.

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