Knowledge Paper on
January, 2015, Chandigarh
Safer and Judicious use of Crop Protection Chemicals & Applications of Green Chemistry
Knowledge and Strategy Partner
Knowledge and Strategy Partner
Knowledge Paper on
January, 2015, Chandigarh
Safer and Judicious use of Crop Protection
Chemicals & Applications of Green Chemistry
Knowledge and Strategy Partner
Knowledge Paper on
January, 2015, Chandigarh
Safer and Judicious use of Crop Protection
Chemicals & Applications of Green Chemistry
Knowledge and Strategy Partner
Knowledge and Strategy Partner
Knowledge and Strategy Partner
Table of Content
1 Executive Summary. . . 03
2 Introduction . . . 05
3 Indian market overview. . . 07
3.1 Domestic consumption. . . 08
3.2 Distribution of crop protection market by Product category. . . 08
3.3 The shift towards Green Chemistry. . . 09
4 Challenges . . . 10
5 Opportunities and Growth Drivers. . . 11
6 Green Chemistry in Agrochemical Sector . . . 12
6.1 Green Chemistry. . . 12
6.2 Green Chemistry Implementation Strategies. . . 12
6.3 Short Term Strategies. . . 13
6.4 Medium Term Strategies. . . 14
6.5 Long Term Strategies. . . 17
7 Judicious use of Crop Protection Chemicals. . . 20
8 The Way Ahead. . . 23
9 Application of Make in India Concept in Crop Protection . . . 25
Chemicals Sector 9 References . . . 27
10 About Tata Strategic . . . 28
Tata Strategic Contacts. . . 28 Manish Panchal
Practice Head - Chemical & Energy Tata Strategic Management Group
manish.panchal@tsmg.com
Charu Kapoor
Principal - Chemicals Tata Strategic Management Group
charu.kapoor@tsmg.com
FICCI with support of TATA Strategic Management Group (TSMG) has been regularly tracking the trends in the agrochemical industry and supporting companies, both big and small, across various verticals to achieve business excellence. The same knowledge and experience gives us an additional advantage to realize this report.
The rising population, increasing food demand, shrinking agriculture land area and loss of crops due to the attack of pests and diseases will require us to produce more from the same farmland in coming years. To achieve the higher yield, crop protection chemicals will play an important role. Simultaneously, it will also be critical to use them judiciously in order to maximize benefits and minimize the impact on non-targeted species. Achieving both of these objectives will require companies to shift towards “specialized products” and continuously improve awareness for end users. In this report, we have highlighted the current market scenario for Crop Protection Chemicals in India and the shifts which are happening in this industry.
For a balanced growth of Crop Protection Chemicals industry, it will also be essential for companies producing crop protection products to evaluate possibilities to move to “green” processes and products. Through this report we have also attempted to highlight possible strategies to implement green chemistry practices.
With the current government's 'Make In India' campaign, the agrochemical industry is likely to benefit due to large installed capacities.
As always it was an insightful experience for the team to materialize this report. We hope it acts as a guiding light both for the players and the consumers of crop protection products.
Foreword
P S Singh
Head- Chemicals FICCI
prabhsharan.singh@ficci.com
Knowledge and Strategy Partner
Knowledge and Strategy Partner
Table of Content
1 Executive Summary. . . 03
2 Introduction . . . 05
3 Indian market overview. . . 07
3.1 Domestic consumption. . . 08
3.2 Distribution of crop protection market by Product category. . . 08
3.3 The shift towards Green Chemistry. . . 09
4 Challenges . . . 10
5 Opportunities and Growth Drivers. . . 11
6 Green Chemistry in Agrochemical Sector . . . 12
6.1 Green Chemistry. . . 12
6.2 Green Chemistry Implementation Strategies. . . 12
6.3 Short Term Strategies. . . 13
6.4 Medium Term Strategies. . . 14
6.5 Long Term Strategies. . . 17
7 Judicious use of Crop Protection Chemicals. . . 20
8 The Way Ahead. . . 23
9 Application of Make in India Concept in Crop Protection . . . 25
Chemicals Sector 9 References . . . 27
10 About Tata Strategic . . . 28
Tata Strategic Contacts. . . 28 Manish Panchal
Practice Head - Chemical & Energy Tata Strategic Management Group
manish.panchal@tsmg.com
Charu Kapoor
Principal - Chemicals Tata Strategic Management Group
charu.kapoor@tsmg.com
FICCI with support of TATA Strategic Management Group (TSMG) has been regularly tracking the trends in the agrochemical industry and supporting companies, both big and small, across various verticals to achieve business excellence. The same knowledge and experience gives us an additional advantage to realize this report.
The rising population, increasing food demand, shrinking agriculture land area and loss of crops due to the attack of pests and diseases will require us to produce more from the same farmland in coming years. To achieve the higher yield, crop protection chemicals will play an important role. Simultaneously, it will also be critical to use them judiciously in order to maximize benefits and minimize the impact on non-targeted species. Achieving both of these objectives will require companies to shift towards “specialized products” and continuously improve awareness for end users. In this report, we have highlighted the current market scenario for Crop Protection Chemicals in India and the shifts which are happening in this industry.
For a balanced growth of Crop Protection Chemicals industry, it will also be essential for companies producing crop protection products to evaluate possibilities to move to “green” processes and products. Through this report we have also attempted to highlight possible strategies to implement green chemistry practices.
With the current government's 'Make In India' campaign, the agrochemical industry is likely to benefit due to large installed capacities.
As always it was an insightful experience for the team to materialize this report. We hope it acts as a guiding light both for the players and the consumers of crop protection products.
Foreword
P S Singh
Head- Chemicals FICCI
prabhsharan.singh@ficci.com
Knowledge and Strategy Partner
Knowledge and Strategy Partner Knowledge and Strategy Partner
Figure 1: Losses caused by different pests (%) . . . 05
Figure 2: Indian Crop Protection Market, FY14 (USD Bn) . . . 07
Figure 3: Per capita consumption of pesticides (Kg/ ha), FY14 . . . 08
Figure 4: Crop protection market split, India, FY14. . . 09
Figure 5: Green Chemistry Implementation Strategies . . . 11
Figure 6: Advantages of Microwave Chemistry . . . 16
Figure 7: Global bio-pesticides market . . . 17
Figure 8: The Way Ahead. . . 24
LIST OF FIGURES
T
his report is developed by Tata Strategic Management Group with support of FICCI as the knowledge paper for the “Safer and Judicious use of Crop Protection Chemicals and applications of Green Chemistry” seminar.The Indian crop protection industry as of FY '14 stood at USD 4.25 billion and is expected to grow at a CAGR of 12% for the next five years. Going ahead, opportunities for the Indian crop protection industry will come from exports, higher production of generic products, product portfolio expansion, and growth in herbicides and fungicides.
In coming years, the need for safe and effective use of crop protection chemicals will further increase to brace with larger climatic variations and emergence of new invasive insects, weeds and diseases. Hence, it is important for companies to invest today in science and practices which promote safe and judicious use of crop chemicals.
Judicious use of pesticides implies using the right product, with correct dosage and with correct application methodology. When used judiciously, the products deliver maximum impact on the target species. Therefore, it is critical for both the government and for Crop Protection Chemicals manufacturers to work closely with the farmers and farmers associations to
Executive summary
1
Knowledge and Strategy Partner Knowledge and Strategy Partner
Figure 1: Losses caused by different pests (%) . . . 05
Figure 2: Indian Crop Protection Market, FY14 (USD Bn) . . . 07
Figure 3: Per capita consumption of pesticides (Kg/ ha), FY14 . . . 08
Figure 4: Crop protection market split, India, FY14. . . 09
Figure 5: Green Chemistry Implementation Strategies . . . 11
Figure 6: Advantages of Microwave Chemistry . . . 16
Figure 7: Global bio-pesticides market . . . 17
Figure 8: The Way Ahead. . . 24
LIST OF FIGURES
T
his report is developed by Tata Strategic Management Group with support of FICCI as the knowledge paper for the “Safer and Judicious use of Crop Protection Chemicals and applications of Green Chemistry” seminar.The Indian crop protection industry as of FY '14 stood at USD 4.25 billion and is expected to grow at a CAGR of 12% for the next five years. Going ahead, opportunities for the Indian crop protection industry will come from exports, higher production of generic products, product portfolio expansion, and growth in herbicides and fungicides.
In coming years, the need for safe and effective use of crop protection chemicals will further increase to brace with larger climatic variations and emergence of new invasive insects, weeds and diseases. Hence, it is important for companies to invest today in science and practices which promote safe and judicious use of crop chemicals.
Judicious use of pesticides implies using the right product, with correct dosage and with correct application methodology. When used judiciously, the products deliver maximum impact on the target species. Therefore, it is critical for both the government and for Crop Protection Chemicals manufacturers to work closely with the farmers and farmers associations to
Executive summary
1
Knowledge and Strategy Partner Knowledge and Strategy Partner
educate them on safe and judicious use of existing pesticides as well as advancements happening in products on a regular basis.
Internally, crop protection products manufacturers can also consider performing a process and environmental impact audit of their existing products and adopt green chemistry practices. To move to “green practices”, in the short term, companies can implement zero discharge solutions, adopt COD reduction techniques and develop collaborative platforms. In the medium term, companies can implement solvent recovery practices, explore alternate green solvents, evaluate biocatalysts and microwave chemistry technology. Over the long term, companies may focus on developing bio- pesticides, implement process innovation to achieve a better material balance and build symbiotic relationships with key stake holders.
The future of Crop Protection Chemicals industry is bright. It is expected to grow at a CAGR of 12% between FY 14 and FY 19 to reach USD 7.5 Bn. In coming years, agrochemical industry should focus on developing new processes and products with sustainability as the core principle. This requires developing a collaborative platform in which the academia, government and regulatory bodies, farmers associations, manufacturers and farmers come together to promote safe and judicious usage of pesticides.
With the government's 'Make In India' campaign it becomes imperative for the government to provide special support to this industry to enable it to achieve its true potential.
T
he world's population currently stands at 7 billion and is estimated to rise to 9.3 billion by 2050. This will require the global food production to be increased by 70% over the same time period in order to meet the demand.While there is a need to grow more food to meet future demand, the world currently is facing challenges of food shortage, increasing malnutrition, and rising food inflation. To add to the problems, 25% to 40% of world crop output is lost due to the attack of pests, weeds and diseases (Ref: Figure 1)
The estimates reveal that Crop Protection Chemicals increases crop productivity by 20-50%, which helps mitigate the 20-40% of crop loss from pest attacks. About 20%
of the entire world's agricultural production would be lost to post-harvest pest attacks if no crop protection chemicals were used. Therefore, Crop Protection Chemicals makes excellent financial sense as farmers can get back up-to 14 times their investments in Crop Protection Chemicals.
Introduction
2
Figure 1: Losses caused by different pests (%)
Rodents,
6% Others, 8%
Weeds, 33%
Insects, 26% Diseases,
26%
Source: Industry Reports, Analysis by Tata Strategic
Knowledge and Strategy Partner Knowledge and Strategy Partner
educate them on safe and judicious use of existing pesticides as well as advancements happening in products on a regular basis.
Internally, crop protection products manufacturers can also consider performing a process and environmental impact audit of their existing products and adopt green chemistry practices. To move to “green practices”, in the short term, companies can implement zero discharge solutions, adopt COD reduction techniques and develop collaborative platforms. In the medium term, companies can implement solvent recovery practices, explore alternate green solvents, evaluate biocatalysts and microwave chemistry technology. Over the long term, companies may focus on developing bio- pesticides, implement process innovation to achieve a better material balance and build symbiotic relationships with key stake holders.
The future of Crop Protection Chemicals industry is bright. It is expected to grow at a CAGR of 12% between FY 14 and FY 19 to reach USD 7.5 Bn. In coming years, agrochemical industry should focus on developing new processes and products with sustainability as the core principle. This requires developing a collaborative platform in which the academia, government and regulatory bodies, farmers associations, manufacturers and farmers come together to promote safe and judicious usage of pesticides.
With the government's 'Make In India' campaign it becomes imperative for the government to provide special support to this industry to enable it to achieve its true potential.
T
he world's population currently stands at 7 billion and is estimated to rise to 9.3 billion by 2050. This will require the global food production to be increased by 70% over the same time period in order to meet the demand.While there is a need to grow more food to meet future demand, the world currently is facing challenges of food shortage, increasing malnutrition, and rising food inflation. To add to the problems, 25% to 40% of world crop output is lost due to the attack of pests, weeds and diseases (Ref: Figure 1)
The estimates reveal that Crop Protection Chemicals increases crop productivity by 20-50%, which helps mitigate the 20-40% of crop loss from pest attacks. About 20%
of the entire world's agricultural production would be lost to post-harvest pest attacks if no crop protection chemicals were used. Therefore, Crop Protection Chemicals makes excellent financial sense as farmers can get back up-to 14 times their investments in Crop Protection Chemicals.
Introduction
2
Figure 1: Losses caused by different pests (%)
Rodents,
6% Others, 8%
Weeds, 33%
Insects, 26%
Diseases, 26%
Source: Industry Reports, Analysis by Tata Strategic
Knowledge and Strategy Partner Knowledge and Strategy PartnerKnowledge and Strategy Partner
Despite their significant benefits when Crop Protection Chemicals are not used as directed or not handled with due care, loss of yield and /or environmental and health challenges emerge. Therefore, it is essential for the farmers to be well educated about the various pros and cons of the products which they are using. For example, indiscriminate usage of urea in India in place of potash and phosphorus leads to imbalance in soil.
To successfully reap the benefits of crop protection products without compromising the environment and human health, it is essential that producers and users of crop protection products to focus the following elements:
1. Use crop protection products judiciously
2. Move towards “green” Crop Protection Chemicals 3. Shift to green chemistry manufacturing processes
The following sections of the report highlight the Indian crop protection market, the opportunities and challenges of the sector, green chemistry implementation strategies for companies and recommendations on judicious use of crop protection products.
T
he Indian crop protection industry is estimated to be USD 4.25 billion in FY14 and is expected to grow at a CAGR of 12% to reach USD 7.5 billion by FY19 (Ref: Figure 2). The exports currently constitute almost 50% of the Indian crop protection industry and are expected to grow at a CAGR of 16% to reach USD 4.2 billion by FY19, resulting in 60% share in Indian crop protection industry. Domestic market on the other hand would however grow at 8% CAGR, as it is predominantly monsoon dependent, to reach USD 3.3 billion by FY19. India is the fourth largest producer of crop protection chemicals globally, after United States, Japan & China.The crop protection companies in India can be categorized into three types -Multi- National, Indian including the public sector companies and small sector units.
Indian Market Overview
3
Figure 2: Indian Crop Protection Chemicals Market, FY14 (USD Bn)
Domestic Exports
2.25 3.3
2.0
4.2
8% 16%
Total USD 4.25 billion USD 7.5 billion
FY14 FY19
12%
Source: Industry reports, Analysis by Tata Strategic
Knowledge and Strategy Partner Knowledge and Strategy PartnerKnowledge and Strategy Partner
Despite their significant benefits when Crop Protection Chemicals are not used as directed or not handled with due care, loss of yield and /or environmental and health challenges emerge. Therefore, it is essential for the farmers to be well educated about the various pros and cons of the products which they are using. For example, indiscriminate usage of urea in India in place of potash and phosphorus leads to imbalance in soil.
To successfully reap the benefits of crop protection products without compromising the environment and human health, it is essential that producers and users of crop protection products to focus the following elements:
1. Use crop protection products judiciously
2. Move towards “green” Crop Protection Chemicals 3. Shift to green chemistry manufacturing processes
The following sections of the report highlight the Indian crop protection market, the opportunities and challenges of the sector, green chemistry implementation strategies for companies and recommendations on judicious use of crop protection products.
T
he Indian crop protection industry is estimated to be USD 4.25 billion in FY14 and is expected to grow at a CAGR of 12% to reach USD 7.5 billion by FY19 (Ref: Figure 2). The exports currently constitute almost 50% of the Indian crop protection industry and are expected to grow at a CAGR of 16% to reach USD 4.2 billion by FY19, resulting in 60% share in Indian crop protection industry. Domestic market on the other hand would however grow at 8% CAGR, as it is predominantly monsoon dependent, to reach USD 3.3 billion by FY19. India is the fourth largest producer of crop protection chemicals globally, after United States, Japan & China.The crop protection companies in India can be categorized into three types -Multi- National, Indian including the public sector companies and small sector units.
Indian Market Overview
3
Figure 2: Indian Crop Protection Chemicals Market, FY14 (USD Bn)
Domestic Exports
2.25 3.3
2.0
4.2
8%
16%
Total USD 4.25 billion USD 7.5 billion
FY14 FY19
12%
Source: Industry reports, Analysis by Tata Strategic
Knowledge and Strategy Partner
3.1 Domestic consumption
The per capita consumption of crop protection products in India is amongst the lowest in the world. Currently the per capita consumption of pesticides in India stands at 0.6 kg/ ha as compared to 5 kg/ha in UK and 7 kg/ ha in USA (Ref: Figure 3). On the other hand the per capita consumption in other Asian countries like Japan, China and Taiwan is almost 50 times as compared to the Indian consumption. Low purchasing power of farmers, lack of awareness amongst them and limited reach are some of the reasons for low consumption of pesticides in India, thus creating tremendous opportunity for the growth of crop protection industry in India.
Figure 3 : Per capita consumption of pesticides (Kg/ ha), FY14
3.2 Distribution of crop protection chemicals market by Product category
Insecticides dominate the Indian crop protection market and form almost 60% of the domestic crop protection chemicals market. The major applications are found in rice and cotton crops. Fungicides and Herbicides are the largest growing segments accounting for 18% and 16% respectively of the total crop protection chemicals market (Ref: Figure 4).
Knowledge and Strategy Partner
Figure 4: Crop protection chemicals market split, India, FY14
As the weeds grow in damp and warm weather and die in cold seasons, the sale of herbicides is seasonal. Rice and wheat crops are the major application areas of herbicides. The fungicides find applications in fruits, vegetables and rise and their increasing usage are due to shift in agriculture from cash crops to fruits and vegetables and government support for exports.
Bio-pesticides include all biological materials organisms, which can be used to control pests. Although they constitute only 3% of the Indian crop protection market, they provide significant growth opportunities due to increasing concern of safety and toxicity of pesticides, stringent regulations and government support.
The Indian Agrochemical Industry is witnessing a gradual shift towards implementation of green practices. Companies have started employing zero discharge solutions in practice which has resulted in significant benefits. For instance, a leading global company at its Gujarat plant was able to recover more than 80% of water, reduce COD levels by 40 times and TDS levels by 60 times by implementation of zero discharge solutions. This helped the company to comply with governmental norms, avoid liability costs, achieve un-interrupted production and reduce production costs.
3.3 The shift towards Green Chemistry
17
0.6
5 5
7 7
12 13
India UK
France Korea
USA Japan
China
Taiwan
Source: Industry reports, Analysis by Tata Strategic
Insecticides, 60% Herbicides,
16%
Fungicides, 18%
Others, 3% Biopesticides,
3%
Source: Industry reports, Analysis by Tata Strategic
Knowledge and Strategy Partner
3.1 Domestic consumption
The per capita consumption of crop protection products in India is amongst the lowest in the world. Currently the per capita consumption of pesticides in India stands at 0.6 kg/ ha as compared to 5 kg/ha in UK and 7 kg/ ha in USA (Ref: Figure 3). On the other hand the per capita consumption in other Asian countries like Japan, China and Taiwan is almost 50 times as compared to the Indian consumption. Low purchasing power of farmers, lack of awareness amongst them and limited reach are some of the reasons for low consumption of pesticides in India, thus creating tremendous opportunity for the growth of crop protection industry in India.
Figure 3 : Per capita consumption of pesticides (Kg/ ha), FY14
3.2 Distribution of crop protection chemicals market by Product category
Insecticides dominate the Indian crop protection market and form almost 60% of the domestic crop protection chemicals market. The major applications are found in rice and cotton crops. Fungicides and Herbicides are the largest growing segments accounting for 18% and 16% respectively of the total crop protection chemicals market (Ref: Figure 4).
Knowledge and Strategy Partner
Figure 4: Crop protection chemicals market split, India, FY14
As the weeds grow in damp and warm weather and die in cold seasons, the sale of herbicides is seasonal. Rice and wheat crops are the major application areas of herbicides. The fungicides find applications in fruits, vegetables and rise and their increasing usage are due to shift in agriculture from cash crops to fruits and vegetables and government support for exports.
Bio-pesticides include all biological materials organisms, which can be used to control pests. Although they constitute only 3% of the Indian crop protection market, they provide significant growth opportunities due to increasing concern of safety and toxicity of pesticides, stringent regulations and government support.
The Indian Agrochemical Industry is witnessing a gradual shift towards implementation of green practices. Companies have started employing zero discharge solutions in practice which has resulted in significant benefits. For instance, a leading global company at its Gujarat plant was able to recover more than 80% of water, reduce COD levels by 40 times and TDS levels by 60 times by implementation of zero discharge solutions. This helped the company to comply with governmental norms, avoid liability costs, achieve un-interrupted production and reduce production costs.
3.3 The shift towards Green Chemistry
17
0.6
5 5
7 7
12 13
India UK
France Korea
USA Japan
China
Taiwan
Source: Industry reports, Analysis by Tata Strategic
Insecticides, 60%
Herbicides, 16%
Fungicides, 18%
Others, 3%
Biopesticides, 3%
Source: Industry reports, Analysis by Tata Strategic
Knowledge and Strategy Partner Knowledge and Strategy Partner
The Indian crop protection industry is facing numerous challenges. Some of the critical challenges are highlighted below:
Knowledge and Strategy Partner
1.
2.
3.
4.
5.
6.
lStringent regulations across the world are increasing the cost of developing new products and delaying the introduction of new products in the market.
lLow focus on R&D by domestic manufacturers: Due to the rising R&D costs Indian companies are unable to invest in R&D and hence focusing on generic products.
lBuilding awareness among farmers: It is important to educate the farmers about the right kind of pesticide, dosage and application frequency.
lNeed for efficient distribution system: The lack of efficient distribution system makes it difficult for the agrochemical companies to reach the farmers to promote their products and educate them about their usage and benefits.
lSpurious products: According to recent study done by TSMG, spurious pesticides constitute around Rs. 3,000 Cr (USD 500 Mn.) and 30% by volume in 2013 of the total Indian pesticide industry.
lLong registration period: It takes almost 10 years to bring a new molecule and it can take up to 5 years to get a generic product registered.
Challenges
4 5 Opportunities and Growth Drivers
The Indian crop protection industry is facing numerous challenges. Some of the critical challenges are highlighted below:
Some of the key opportunities and drivers for growth of the Indian crop protection industry are highlighted as follows:
lExport Opportunities: High export potential due to low cost manufacturing, availability of trained manpower, better price realization and strong presence in generic pesticide manufacturing
lGrowth in generic products: During the period of 2014 - 2020 products worth USD 6.3 billion are expected to go off-patent providing growth opportunities for the Indian manufacturers.
lProduct portfolio expansion: Companies are looking to provide a complete end to end solution right from land preparation, availability of right quality of seeds and crop protection chemicals.
lGrowth in herbicides and fungicides: Labor shortage, rising labor costs and growth in GM crops has led to growth in the use of herbicides and fungicides.
lIncreasing demand for food grains and limited agricultural land availability: The focus is to increase the yield per unit area under cultivation resulting in increased usage of Crop Protection Chemicals.
lLow crop yields: The yield per hectare in India is amongst the lowest in the world, 3 million tonnes per hectare as compared to the global average of 4 million tonnes per hectare.
lRural Infrastructure and IT: Linking the production areas with the market would help in easy distribution of pesticides. IT services would help create awareness among farmers.
lAvailability of credit facilities: Easy credit facilities to farmers in the rural areas will provide boost to the agriculture industry and use of more pesticides in order to improve the crop yield.
1.
2.
3.
4.
5.
6.
7.
8.
Knowledge and Strategy Partner Knowledge and Strategy Partner
The Indian crop protection industry is facing numerous challenges. Some of the critical challenges are highlighted below:
Knowledge and Strategy Partner
1.
2.
3.
4.
5.
6.
lStringent regulations across the world are increasing the cost of developing new products and delaying the introduction of new products in the market.
lLow focus on R&D by domestic manufacturers: Due to the rising R&D costs Indian companies are unable to invest in R&D and hence focusing on generic products.
lBuilding awareness among farmers: It is important to educate the farmers about the right kind of pesticide, dosage and application frequency.
lNeed for efficient distribution system: The lack of efficient distribution system makes it difficult for the agrochemical companies to reach the farmers to promote their products and educate them about their usage and benefits.
lSpurious products: According to recent study done by TSMG, spurious pesticides constitute around Rs. 3,000 Cr (USD 500 Mn.) and 30% by volume in 2013 of the total Indian pesticide industry.
lLong registration period: It takes almost 10 years to bring a new molecule and it can take up to 5 years to get a generic product registered.
Challenges
4 5 Opportunities and Growth Drivers
The Indian crop protection industry is facing numerous challenges. Some of the critical challenges are highlighted below:
Some of the key opportunities and drivers for growth of the Indian crop protection industry are highlighted as follows:
lExport Opportunities: High export potential due to low cost manufacturing, availability of trained manpower, better price realization and strong presence in generic pesticide manufacturing
lGrowth in generic products: During the period of 2014 - 2020 products worth USD 6.3 billion are expected to go off-patent providing growth opportunities for the Indian manufacturers.
lProduct portfolio expansion: Companies are looking to provide a complete end to end solution right from land preparation, availability of right quality of seeds and crop protection chemicals.
lGrowth in herbicides and fungicides: Labor shortage, rising labor costs and growth in GM crops has led to growth in the use of herbicides and fungicides.
lIncreasing demand for food grains and limited agricultural land availability: The focus is to increase the yield per unit area under cultivation resulting in increased usage of Crop Protection Chemicals.
lLow crop yields: The yield per hectare in India is amongst the lowest in the world, 3 million tonnes per hectare as compared to the global average of 4 million tonnes per hectare.
lRural Infrastructure and IT: Linking the production areas with the market would help in easy distribution of pesticides. IT services would help create awareness among farmers.
lAvailability of credit facilities: Easy credit facilities to farmers in the rural areas will provide boost to the agriculture industry and use of more pesticides in order to improve the crop yield.
1.
2.
3.
4.
5.
6.
7.
8.
Knowledge and Strategy Partner Knowledge and Strategy PartnerKnowledge and Strategy Partner
6.1 Green Chemistry
Green chemistry is a philosophy of chemical research and engineering that involves the design of products and processes that minimize the use and generation of hazardous chemicals. Unlike the environmental chemistry which focuses on the study of pollutant chemicals and their effect on nature, green chemistry aims to reduce the pollution at the source. Green chemistry involves waste minimization at source, use of catalysts in place of reagents, use of non-toxic reagents, use of renewable resources, improved atom efficiency and use of Solvent Free or Recyclable Environmentally Benign Solvent systems.
Implementation of Green Chemistry practices can help the companies in achieving material and energy efficiency and reduce the hazards involved in the entire life cycle of the product.
6.2 Green Chemistry Implementation Strategies
Based on the implementation time, resources involved and associated implementation risks green chemistry strategies can be categorized into three types: Short term implementation strategies, medium term implementation strategies and long term implementation strategies. (Ref:
Figure 5)
Green Chemistry in Crop Protection Chemicals Sector
6
6.3 Short Term Strategies
On a short term basis the industry should look for possible ways to optimize their current business practices by developing zero discharge solution, developing means for reducing the COD (Chemical Oxygen Demand) levels in the wastewater generated and by developing collaborative platforms so as to learn from the best practices employed in other companies.
The conventional wastewater treatment processes do not remove salinity in the treated effluent. Discharging the saline waste water pollutes the ground and surface waters, also impacting the nutrient value of the soil. In order to overcome the scarcity of water, impact of saline water discharge and regulatory pressures associated, zero liquid discharge solutions have been developed which mean zero discharge of wastewater from industries. It involves advanced wastewater treatment technologies to recycle recover and re-use the 'treated' wastewater, ensuring bare minimum discharge of wastewater to the environment. Apart from reducing the environmental waste discharge, it helps in 90-95% of water recovery and recovery of by- products from the salts resulting in operational savings.
Industrial wastewater containing organic and inorganic impurities are toxic and can't undergo direct biological treatment. The industrial wastewater resulting from the spills, leaks, product washings and effluents discharged from the chemical plants differ in characteristics amongst themselves and from the domestic wastewater. Some of the key waste generating sectors are pharma, Crop Protection Chemicals and pigment industries. In order to meet 6.3.1. Zero Discharge Solution
6.3.2. COD Reduction
Figure 5: Green Chemistry Implementation Strategies
Strategy Implementation Time Resources Required Associated Risks
Short Term 6 months to 18 months Low Low
Medium Term 18 months to 3 years Medium Medium
Long term 3 years to 10 Years High High
Knowledge and Strategy Partner Knowledge and Strategy PartnerKnowledge and Strategy Partner
6.1 Green Chemistry
Green chemistry is a philosophy of chemical research and engineering that involves the design of products and processes that minimize the use and generation of hazardous chemicals. Unlike the environmental chemistry which focuses on the study of pollutant chemicals and their effect on nature, green chemistry aims to reduce the pollution at the source. Green chemistry involves waste minimization at source, use of catalysts in place of reagents, use of non-toxic reagents, use of renewable resources, improved atom efficiency and use of Solvent Free or Recyclable Environmentally Benign Solvent systems.
Implementation of Green Chemistry practices can help the companies in achieving material and energy efficiency and reduce the hazards involved in the entire life cycle of the product.
6.2 Green Chemistry Implementation Strategies
Based on the implementation time, resources involved and associated implementation risks green chemistry strategies can be categorized into three types: Short term implementation strategies, medium term implementation strategies and long term implementation strategies. (Ref:
Figure 5)
Green Chemistry in Crop Protection Chemicals Sector
6
6.3 Short Term Strategies
On a short term basis the industry should look for possible ways to optimize their current business practices by developing zero discharge solution, developing means for reducing the COD (Chemical Oxygen Demand) levels in the wastewater generated and by developing collaborative platforms so as to learn from the best practices employed in other companies.
The conventional wastewater treatment processes do not remove salinity in the treated effluent. Discharging the saline waste water pollutes the ground and surface waters, also impacting the nutrient value of the soil. In order to overcome the scarcity of water, impact of saline water discharge and regulatory pressures associated, zero liquid discharge solutions have been developed which mean zero discharge of wastewater from industries. It involves advanced wastewater treatment technologies to recycle recover and re-use the 'treated' wastewater, ensuring bare minimum discharge of wastewater to the environment. Apart from reducing the environmental waste discharge, it helps in 90-95% of water recovery and recovery of by- products from the salts resulting in operational savings.
Industrial wastewater containing organic and inorganic impurities are toxic and can't undergo direct biological treatment. The industrial wastewater resulting from the spills, leaks, product washings and effluents discharged from the chemical plants differ in characteristics amongst themselves and from the domestic wastewater. Some of the key waste generating sectors are pharma, Crop Protection Chemicals and pigment industries. In order to meet 6.3.1. Zero Discharge Solution
6.3.2. COD Reduction
Figure 5: Green Chemistry Implementation Strategies
Strategy Implementation Time Resources Required Associated Risks
Short Term 6 months to 18 months Low Low
Medium Term 18 months to 3 years Medium Medium
Long term 3 years to 10 Years High High
Knowledge and Strategy Partner Knowledge and Strategy Partner
the specifications for discharge or for recycling the industrial effluents have to be treated. Various methods have been developed to reduce the COD of the industrial waste water. COD can be reduced by using H2O2, subcritical water oxidation, thermal-liquid phase oxidation, isolated bacteria and using adsorbents like activated carbon, fly ash and neem leaves.
Instead of competing with each other, by building up collaborative platforms across various levels of management companies can learn from the best practices prevalent in other companies. Such platforms build trust amongst the companies resulting in sharing of knowledge and expertise which is important for dissemination of green chemistry practices resulting in development of greener processes and products cost efficiently. The collaborative platforms can be developed across various dimensions like procurement, marketing and distribution, energy, water, waste disposal and safety. For instance, development of a collaborative platform by the top six Indian pharmaceutical companies has helped them to share the best practices amongst themselves. This has resulted in energy cost reduction of Rs 10-15 Crore and reduction in water consumption by 200 million liters within one year of establishment. It has also helped the companies in enhancing their solvent recovery by 4-5%.
On a medium term basis companies should look for how they can change their chemistry so that they can maximize the efficiency of their consumption of solvents. This helps companies to reduce the amount of wastes generated, improve their material efficiency and reduce the costs involved. Companies can also explore new greener aspects of chemistry and chemical engineering like microwave chemistry.
The chemical industry heavily uses large quantities of organic solvents in a great number of manufacturing steps which include chemical synthesis, fermentation, extraction, formulation and finishing of products. They are used as reaction media and for products extraction in the pharmaceutical, 6.3.3. Collaborative Platforms
6.4.1 Solvent recovery practice
6.4 Medium Term S.trategies
Crop Protection Chemicals, specialty chemicals and fragrance industries.
Except few cases, the solvents used do not participate in the reaction. At the end of the process, the solvents are usually contaminated and cannot be reused. Hence the practice is to dispose them and use fresh solvents. It has been found that solvents have been responsible for 40% of VOC emissions in Europe and their disposal costs go up to 10% of the purchase price. This makes solvent recovery an important means to implement green and sustainable chemistry. Some of the commonly used solvents are NMP, isophorone and cyclohexanone.
Traditionally the solvents used are derived from crude oil and result in high levels of toxic emissions in the atmosphere. The increasing usage of the solvents along with strict environmental regulations to lower the VOC (Volatile Organic Compounds) has resulted in growth of biosolvents (greener alternatives). According to a research the green solvent market is expected to reach USD 6.5 billion by 2018 at a CAGR of almost 8.5%.
The green solvent market is segmented based on applications such as adhesives, cosmetics, pharmaceuticals, Crop Protection Chemicals, paints and coatings. Depending on product type, green solvents are categorized as soy methyl esters, lactate esters, derived from soyabean oil, a biodegradable alternative can replace almost 500 pounds of traditional chlorinated and petroleum solvents. Ethyl lactate, another green solvent has replaced solvents like NMP, toluene, acetone and xylene. The greener alternatives are biodegradable, easy to recycle, result in reduced harmful emissions and are non-corrosive and non-carcinogenic
Biocatalysis is the use of isolated enzymes or whole cells for synthetic transformation. Enzymes are catalytic proteins that catalyze reactions in the living organisms. Enzymes are highly efficient catalysts resulting in rate enhancement of reaction to about 106 to 1017. Enzymes have a very good selectivity i.e. ability to work with a single compound resulting in high yield of a specific product. Compared to chemical catalysts biocatalysts require milder reaction conditions (pH range of 5-8 and temperature range of 20- 40oC). Biocatalysts are more efficient (lower concentration of enzymes are 6.4.2 Alternate Solvents
6.4.3 Biocatalysts
Knowledge and Strategy Partner Knowledge and Strategy Partner
the specifications for discharge or for recycling the industrial effluents have to be treated. Various methods have been developed to reduce the COD of the industrial waste water. COD can be reduced by using H2O2, subcritical water oxidation, thermal-liquid phase oxidation, isolated bacteria and using adsorbents like activated carbon, fly ash and neem leaves.
Instead of competing with each other, by building up collaborative platforms across various levels of management companies can learn from the best practices prevalent in other companies. Such platforms build trust amongst the companies resulting in sharing of knowledge and expertise which is important for dissemination of green chemistry practices resulting in development of greener processes and products cost efficiently. The collaborative platforms can be developed across various dimensions like procurement, marketing and distribution, energy, water, waste disposal and safety. For instance, development of a collaborative platform by the top six Indian pharmaceutical companies has helped them to share the best practices amongst themselves. This has resulted in energy cost reduction of Rs 10-15 Crore and reduction in water consumption by 200 million liters within one year of establishment. It has also helped the companies in enhancing their solvent recovery by 4-5%.
On a medium term basis companies should look for how they can change their chemistry so that they can maximize the efficiency of their consumption of solvents. This helps companies to reduce the amount of wastes generated, improve their material efficiency and reduce the costs involved. Companies can also explore new greener aspects of chemistry and chemical engineering like microwave chemistry.
The chemical industry heavily uses large quantities of organic solvents in a great number of manufacturing steps which include chemical synthesis, fermentation, extraction, formulation and finishing of products. They are used as reaction media and for products extraction in the pharmaceutical, 6.3.3. Collaborative Platforms
6.4.1 Solvent recovery practice
6.4 Medium Term S.trategies
Crop Protection Chemicals, specialty chemicals and fragrance industries.
Except few cases, the solvents used do not participate in the reaction. At the end of the process, the solvents are usually contaminated and cannot be reused. Hence the practice is to dispose them and use fresh solvents. It has been found that solvents have been responsible for 40% of VOC emissions in Europe and their disposal costs go up to 10% of the purchase price. This makes solvent recovery an important means to implement green and sustainable chemistry. Some of the commonly used solvents are NMP, isophorone and cyclohexanone.
Traditionally the solvents used are derived from crude oil and result in high levels of toxic emissions in the atmosphere. The increasing usage of the solvents along with strict environmental regulations to lower the VOC (Volatile Organic Compounds) has resulted in growth of biosolvents (greener alternatives). According to a research the green solvent market is expected to reach USD 6.5 billion by 2018 at a CAGR of almost 8.5%.
The green solvent market is segmented based on applications such as adhesives, cosmetics, pharmaceuticals, Crop Protection Chemicals, paints and coatings. Depending on product type, green solvents are categorized as soy methyl esters, lactate esters, derived from soyabean oil, a biodegradable alternative can replace almost 500 pounds of traditional chlorinated and petroleum solvents. Ethyl lactate, another green solvent has replaced solvents like NMP, toluene, acetone and xylene. The greener alternatives are biodegradable, easy to recycle, result in reduced harmful emissions and are non-corrosive and non-carcinogenic
Biocatalysis is the use of isolated enzymes or whole cells for synthetic transformation. Enzymes are catalytic proteins that catalyze reactions in the living organisms. Enzymes are highly efficient catalysts resulting in rate enhancement of reaction to about 106 to 1017. Enzymes have a very good selectivity i.e. ability to work with a single compound resulting in high yield of a specific product. Compared to chemical catalysts biocatalysts require milder reaction conditions (pH range of 5-8 and temperature range of 20- 40oC). Biocatalysts are more efficient (lower concentration of enzymes are 6.4.2 Alternate Solvents
6.4.3 Biocatalysts
Knowledge and Strategy Partner Knowledge and Strategy Partner
needed), can be easily modified to increase their selectivity, stability and activity. Traditionally biocatalysts have been used in production of alcohol and cheese, however recently they are being increasingly used in the pharmaceutical, agrochemical and food industries. Apart from being environment friendly and biodegradable, the use of biocatalysts can help the chemical companies to improve their yield and reduce the wastes generated.
Microwave chemistry involves use of microwave radiations to carry out chemical reactions. Microwaves act as high frequency electric fields and heat any material containing mobile electric charges such as polar molecules in a solvent or conducting ions in a solid. This involves agitation of polar molecules or ions that oscillate under the effect of an oscillating electric or magnetic field. Under the presence of an oscillating field, the particles try to orient themselves or be in phase with the field. But due to inter-particle interaction and electrical resistance the motion of these particles gets restricted resulting in random motion generating heat. Different materials have different response to microwaves, some are transparent to them (e.g.
sulphur), some reflect them (e.g. copper) and some absorb them (e.g. water).
Microwave chemistry is used in organic synthesis at elevated pressures or in dry media, synthesis of organometallic and coordination compounds, synthesis of ceramic products and have applications in polymer chemistry (Ref: Figure 6). Microwave chemistry finds applications in pharmaceutical industry, agrochemical industry, polymer synthesis, chemical synthesis and extraction, nanoparticle synthesis and biochemical and drying activities.
6.4.4 Microwave Chemistry
Figure 6: Advantages of Microwave Chemistry
6.5 Long Term Strategies
In a long term companies should look for developing new green routes of chemical synthesis. This involves shifting dependence form fossil fuels to renewable resources, and biomass as feedstock to develop biopesticides. The Indian companies should also invest in R&D activities so as to greener synthesis routes and products.
Bio-pesticides, also called as biological pesticides provide an ecofriendly alternative to the traditional pesticides. These pesticides are based on pathogenic microorganisms specific to a target pest, thereby providing an ecologically sound and effective solution to pest problems. The commonly used bio-pesticides are living organisms, which are pathogenic for the pest of interest like biofungicides (Trichoderma), bioherbicides (Phytopthora) and bioinsecticides (Bacillus thuringiensis). Globally, there are 175 registered biopesticide active-ingredients and 700 products available in the market. The global market for biopesticides is currently valued at USD 3.6 Bn in FY14. As compared to the industry growth rate of 5.5% CAGR, the bio-pesticide market is expected to grow at a CAGR of 13.9% to reach USD 6.9 Bn by FY19.
6.5.1 Bio-pesticides
Figure 7 : Global bio-pesticides market
North America consumes the largest share of global biopesticides (40%) followed by Europe (20%). Asia Pacific and Europe are the fastest growing
3.6
6.9
FY14 FY19
13.9%
Source: Industry reports, Analysis by Tata Strategic
Knowledge and Strategy Partner Knowledge and Strategy Partner
needed), can be easily modified to increase their selectivity, stability and activity. Traditionally biocatalysts have been used in production of alcohol and cheese, however recently they are being increasingly used in the pharmaceutical, agrochemical and food industries. Apart from being environment friendly and biodegradable, the use of biocatalysts can help the chemical companies to improve their yield and reduce the wastes generated.
Microwave chemistry involves use of microwave radiations to carry out chemical reactions. Microwaves act as high frequency electric fields and heat any material containing mobile electric charges such as polar molecules in a solvent or conducting ions in a solid. This involves agitation of polar molecules or ions that oscillate under the effect of an oscillating electric or magnetic field. Under the presence of an oscillating field, the particles try to orient themselves or be in phase with the field. But due to inter-particle interaction and electrical resistance the motion of these particles gets restricted resulting in random motion generating heat. Different materials have different response to microwaves, some are transparent to them (e.g.
sulphur), some reflect them (e.g. copper) and some absorb them (e.g. water).
Microwave chemistry is used in organic synthesis at elevated pressures or in dry media, synthesis of organometallic and coordination compounds, synthesis of ceramic products and have applications in polymer chemistry (Ref: Figure 6). Microwave chemistry finds applications in pharmaceutical industry, agrochemical industry, polymer synthesis, chemical synthesis and extraction, nanoparticle synthesis and biochemical and drying activities.
6.4.4 Microwave Chemistry
Figure 6: Advantages of Microwave Chemistry
6.5 Long Term Strategies
In a long term companies should look for developing new green routes of chemical synthesis. This involves shifting dependence form fossil fuels to renewable resources, and biomass as feedstock to develop biopesticides. The Indian companies should also invest in R&D activities so as to greener synthesis routes and products.
Bio-pesticides, also called as biological pesticides provide an ecofriendly alternative to the traditional pesticides. These pesticides are based on pathogenic microorganisms specific to a target pest, thereby providing an ecologically sound and effective solution to pest problems. The commonly used bio-pesticides are living organisms, which are pathogenic for the pest of interest like biofungicides (Trichoderma), bioherbicides (Phytopthora) and bioinsecticides (Bacillus thuringiensis). Globally, there are 175 registered biopesticide active-ingredients and 700 products available in the market. The global market for biopesticides is currently valued at USD 3.6 Bn in FY14. As compared to the industry growth rate of 5.5% CAGR, the bio-pesticide market is expected to grow at a CAGR of 13.9% to reach USD 6.9 Bn by FY19.
6.5.1 Bio-pesticides
Figure 7 : Global bio-pesticides market
North America consumes the largest share of global biopesticides (40%) followed by Europe (20%). Asia Pacific and Europe are the fastest growing
3.6
6.9
FY14 FY19
13.9%
Source: Industry reports, Analysis by Tata Strategic
Knowledge and Strategy Partner Knowledge and Strategy Partner
markets and are expected to grow at CAGR of 14.2% and 16% respectively.
The Indian market currently stands at 0.16 USD billion and is expected to grow to 0.35 USD billion by 2018 at a CAGR of 17.3%. Neem based pesticides, Bacillus thuringiensis, Nuclear Polyhedrosis Virus and Trichoderma are some of the major biopesticides produced and used in India.
The key growth drivers for the increase in demand of bio-pesticides are:
lIncreasing demand for residue free crop protection products
lGrowth in organic food market
lEasy registrations compared to conventional pesticides
lIncreasing concern about safety and toxicity of traditional pesticides The key benefits of the bio-pesticides are:
lCost effectiveness: Costlier but reduced number of applications
lLow residual effect and mostly biodegradable
lLow pest resurgence
lTarget specific and less harmful on beneficial pests
It is important for the agrochemical companies to innovate products which can improve the effectiveness of pesticide usage as well as reduce the negative impacts on environment. Currently the Indian companies invest 1- 2% of their turnover in R&D as compared to 5-10 % spend by the multinational companies. It is therefore essential for the Indian companies should to invest in R&D activities for implementing green practices. Some of the focus areas can be:
lDeveloping water based formulations
lDeveloping Target specific chemicals instead of broad specific chemicals 6.5.2 Product and Process Innovation
lGreener routes of chemical synthesis
lReduce the number of steps involved in product synthesis
lDevelopment of lower dosage molecules leading to lesser volume implementation and reduced quantity of active ingredients going in atmosphere
Industrial ecology is a multi-disciplinary approach that combines different aspects of engineering, economics, sociology, toxicology and natural sciences. It is an ecosystem artificially setup in which various stakeholders (Industries, Government bodies, educational institutes, NGOs and society) come together and develop a symbiotic system where the entities through the dependence on outputs and by-products generated by other members of the ecosystem achieve material and energy efficiency and reduction in wastes generated.
Apart from depending on other partners for raw materials, companies also have the opportunity to look for possible ways of converting the wastes generated from their processes into useful products which can be used for their own operations. By developing a complete chain of green chemical processes in different sectors, Industrial ecology helps in establishing a viable and sustainable looping system.
Industrial ecology helps in reducing raw material and energy consumption, reduced external dependence on feedstock and utilities, reduces the toxic waste generation resulting in cost savings and helps in improving the image of agrochemical companies.
6.5.3 Industrial Ecology
