Camson Biotechnologies Limited

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Camson Biotechnologies Limited
A leader in Agricultural Innovation
2
Overview
3
Overview
Activity
Competitive Advantages
Growth over the Years

• India's first integrated agricultural biotech
  company
• First mover advantage Biocides
• All set to leverage the hard work put in over the
  last one and half decades

• CAGR of over 80 (FY 0610)
• Consistent EBITDA Margins of 19 in last 5
  years
• Consistent PAT Margins of 16 in last 5 years

• Business verticals
• Seeds
• Biocides Bio fertilizers

Financials
(Amt Rs. in cr)
Revenue
EBITDA
PAT
4
Vision Mission
Vision Camson visualises a healthy and
disease-free society by providing safe food
Mission To be a world-class manufacturer of
biotechnology products which are effective,
non-poisonous, eco-friendly, zero-residue and
cost effective through state-of-the-art
technology, backed by on-going research and
development activities thereby providing good
health to all.
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Agenda
Overview
Industry
Company profile
Growth Drivers
Future Roadmap
Financials
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Indian Agriculture Industry
Growing Population
Reducing Arable Land due to Rapid
Industrialisation
Use of Crops as Bio-Fuels
Expected to grow from 1.1 bn in 2009 to 1.9 bn by
2050
Per capita availability of agri land
Source UN Population Division (2005)
Source Union Agriculture Ministry (2006)
Food Scarcity Crisis
India would be short of 14 mmt of food grains by
2017 if the present growth rate of food grain
production continues. Source Govt. of India
Will require high yield seeds bio-fertilizers
to improve agriculture productivity
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Industry Overview Agrochemicals (Pesticides)

Global Agrochemicals Industry

• Global Agrochemicals Industry grew at a CAGR of
  9.3 from 2003 to reach US 41.7 billion in 2008.
• Herbicides (45) and Insecticides (33) are the
  largest consumed agrochemicals.

41.7
9.9
US bn
()
6.0
15.0
2.3
2.6
1.6
2002
2001
2008
2007
2006
2005
2004
2003
Yoy growth ()
Market size
Source SBICAP Report, Mar 2010
Indian Agrochemicals Industry
Pesticide Consumption in India

• Expected to grow at 7.5 from US 1.36 bn (2009)
  to US 1.7 bn (2012).
• 4th largest producer in the world after the US,
  Japan and China.
• Produces 16 of the worlds food grains
  responsible for only 2 of worlds pesticides
  usage.
• Approx. 18 of the crop yield worth Rs. 900 bn is
  lost due to pests every year in India.

Global Pesticide Consumption
9
12
25
Source CARE Report, Mar 2010
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Industry Overview Indian Seed Market

• 6th largest seed market in the world. Estimated
  to be Rs. 49-55 bn.
• Growing at 12-14 annually vis-à-vis global
  market which is growing 4-5 annually.
• Categorised into
• Biotech trait suppliers
• Hybrid seed players / breeders
• Companies that provide seeds to farmers
• Constituents
• Public Sector Mostly focus on high volume low
  value certified seeds such as pulses, wheat and
  soybean
• Private Sector Focus on high-value hybrid seeds
  such as cotton, cereals and vegetables
• Currently exports account for less that 5 of the
  total hybrids market in India
• The country exports predominantly to South-East
  Asian countries

Indian Seed Market Size (Approx. Rs. in bn)
Indian Seed Market
Farm Saved Seeds 75
Commercial Seeds - 25
Public - 24
Private - 75
Unorganised (without research capabilities) 43
Organised (with research capabilities) 57
Source SBICAP Securities Research
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Hybrid Seeds v/s Genetically Modified (GM)
Genetically Modified (GM)
Hybrid
Difference

• Taking desirable gene sequences from other plants
  (and even animals)

• Crossbred species of a two closely related but
  different parent vegetables

Long-term Effect

• Result of a new technology that may have serious
  drawback
• Little is known about the long-term effects on
  the consumer of the extra gene sequences.

• Hybrid vegetables have a favorable public opinion
  since they have existed naturally for centuries

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Advantages of using Hybrid Seeds in Horticulture

• Increase in the yield per unit area per unit time
  due to the development of varieties with high
  yield potential, early maturity and improved
  plant architecture

• Commercial sowing in off-season gives high yield
  and better economical income to the poor growers

Higher Returns to the Farmers
Greater Productivity

Better Adaptability
Better Quality Produce

• Fresh, attractive and free from disease
• Better transport quality
• Suitable for processing

• Have wider adaptability to various environments
• Possess the characteristics suited to off-season
  production

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Agenda
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Milestones Achievements

• Procures land for 3 production units in
  Nangal(HP), Kotabagh (Uttarakhand) Aligarh(UP).
• Launch of Sonmat, yellow skinned watermelon.
• Launch of Cherry tomato
• Launch of Calbase- Biocide for soil application.

In-house RD Unit recognised by Govt. of India,
Ministry of Science and Technology, New Delhi
Exclusive Agreement with Government of Uttarakhand
Started Operations
2004-05
2007-08
2009-10
1993
Camsons Pioneering Products

• First Indian company to launch a seed variety
  giving yellow tomatoes

• First Indian company in India to research,
  produce and market unique seeds like ice box
  watermelons under 3 kilos out of their own RD
  facilities

• First Indian company to produce watermelon with
  yellow skin

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Business Segments Complete Solutions for Farmers
Currently its business consists of 3 verticals -
seeds, biocides and bio-fertilizers
Biotech products (Zero-residue)

• Seeds
• Proven track record of hybrid vegetable seeds
• Range of over 49 varieties
• Pipeline of an additional 70 more varieties

• Biocides
• In house library of 3700 selected and
  characterised microbes
• Effective in controlling various pests and
  pathogens
• Leading edge in innovating/ formulating effective
  biocides

• Bio-fertilizers
• Effective mobilisation of nutrients to plant
• Reduce the need to use chemical fertilizers by
  restoring the soils natural nutrient cycle and
  enhancing the soil conditions

Challenges for Farmers
Solutions by Camson

• Hybrid Seed varieties - Offer maximum
  compatibility with organic and natural conditions
  and better yields
• Bio-fertilizers - Unique combinations of
  bio-agents that enhance the concentration of
  plant nutrients in the soil
• Zero-residue Biocides - enable farmers to access
  higher-value markets by meeting stringent
  requirements on pesticide residue levels

• Supply to the increasing global demand for food
• Reducing the negative impact of crop protection
  practices on consumers, farm workers and the
  environment

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Strong Product Portfolio
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Pioneer Products
Seed Product Portfolio
Key Crops Brands Description
Watermelons Netravati and Vedavati Higher margin product and expected to be future growth driver
Tomato Ganga, Songanaga and Akash Ganga The second highest revenue earner First Indian company to launch a seed variety giving yellow tomatoes
Chilies Gomti and Pennar Gomti chilly is dark green with 8-10 cm length. This variety of seed has been the highest gross earner for Camson.
Biocides Product Portfolio
Product Major Crops For Control and Elimination of
Calphomil Veg, Fruits, Flowers and Cereals Fungal infection like downy mildew, phytopothora, pyhium, wilt, blast
Calnova Veg, Fruits and Flowers Mites(sucking pest), Thrips
Calstim Veg, Fruits and Flowers Bio-stimulants
Caltika Veg, Fruits and Flowers Plant tonic
Calpaste Veg, Fruits, Flowers, Cereals and Cotton Insecticide for all soft bodied insects
Calbahaar Veg, Fruits, Flowers, Cereals and Cotton Prevention and control of soil borne pathogens and insects
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Location and Target Markets
Locations
Setting up a production facility in Nangal,
Himachal Pradesh
Currently ,the company is setting up a production
unit in Uttarakhand to cater exclusively to the
Northern India market
Camson has research center in Aligarh, Uttar
Pradesh
Headquartered in Bangalore, Camson has a 25 acre
RD centre and production facility in
Dodaballapur also in process of developing
another RD center in Dodaballapur
Target Farmers
Target Markets

• Currently active in Six States
• Andhra Pradesh, Uttar Pradesh (including
  Uttaranchal), Maharashtra, Madhya Pradesh,
  Karnataka and Haryana
• These six states account for 85 of sales
• Intends to expand on pan-India basis and enter in
  International markets

• Three categories
• Category A Export oriented farmers.
• Category B Who have not been able to find
  remedial solution for a particular pest/disease
• Category C Who understand harmful effects of
  chemical pesticides

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Sales Distribution Network

• 13 Branches all over India
• Dedicated team of 300 marketing professionals
  across India
• Wide, well-connected network of 300 distributors
  and 2,600 dealers across India

Authorised Distributors (AD) Obtains product at
a lower price than APD

• Distribution is through its Bangalore centre.
  Seeds are normally couriered immediately and
  delivered within 3-4 days.
• For biotech products which have a longer shelf
  life and are much more bulky, Camson has
  Clearing Forwarding agents across the country
  for storage and handling

Retail Shops
CAMSON Marketing
Authorised Preferential Dealer (APD) Larger
retailer at taluka level who also supplies to
some retail shops

• Employs Field Assistants at local level on a
  temporary basis during sales promotions

Sales Officers
Field Assistants
Demos
Free Consultancy

• To reach farmers directly organises various kinds
  of trials and demonstrations

• Give general advice to farmers on various
  products and also write out prescriptions on
  appropriate usage of biocides along with seeds

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Manufacturing Facilities
Manufacturing Facilities
Quick Facts

• Have been set up in southern and northern parts
  of India, keeping in mind the diverse demand in
  both.
• Supported by well-equipped and internally
  connected storage facilities covering key
  locations in India.

• Currently, has one facility at Dodaballapur in
  Bangalore
• Setting up additional facilities in Uttarakhand
  and Himachal Pradesh
• Seed multiplication is through contract farming
  at different locations
• Total area under contract farming is approx. 1000
  acres
• Contract production (Hybrid seeds) spread over
  1000 acres in Karnataka, Andhra Pradesh and Tamil
  Nadu
• Tax advantage for the 25 acre centre in
  Dodaballapur which has agricultural, residential
  and industrial units housed within it

Tax exemptions in biocides units in Nangal and
Kotabagh
Location Karnataka (Existing) Karnataka (New building) Nangal (HP) Aligarh (UP) Kotabagh (Uttarakhand) Total
Type RD Facility Biocide plant RD Lab Biocide plant
Land Area (Acres) 20 1.8 12 1.5
Area (Building) 45,000 sq.mts 30,000 sq. ft 40,000 sq. ft 6,000 sq. ft 30,000 sq. ft
Capex (Rs. mn) 100 80 10 80 270
Capacity (ltrs on a per shift basis) 900,000 NA 900,000 NA 800,000 2,600,000
Expected Operational Date - 31-Mar-12 31-Mar-11 31-Mar-12 31-Mar-12
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Strong RD Capabilities
Strong focus on in-house research capabilities
has resulted in successful portfolio of products
over the past 3 years
Entire Biocides research process takes about 9 -
12 years

• Has already established over 3,700 selected
  microbes

Entire Hybrid Seeds research process takes about
5 - 6 years

• Has a large number of selected nucleus germplasms

RD Facilities

• Already has its 25 acre RD centre and production
  facility in Dodaballapur
• RD facility in Aligarh, UP planning to set up
  another RD center at Dodaballapur

Recognition

• In-house RD Unit recognised by Govt. of India,
  Ministry of Science and Technology, New Delhi

Developed a proprietary technology platform

• Consisting of a microorganism database, screening
  technology and a natural product compound library

Camson's ability to leverage its proprietary
technology platform combined with frontier
science continues to advance Camson's reputation
as a leading innovator in the biotechnology space
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Camsons Zero Residue Farming Products
Production of Biocides and Bio-fertilizers
Based on
Formulates of
Biocides
Secondary Metabolites (Bio-agents beneficial to
soil conditioning and improve the plant
physiology and produce)
Microbial
Bio-fertilizers
Organically derived biocides and bio-fertilizers
to protect crops and enhance growth
Synthetic Chemicals
Biocides and Bio-fertilizers

• Pests develop efficacy
• They cause acute and chronic health effects
• Affect the equilibrium of agricultural systems
  and the environment
• Also lead to socio-economic problems in the
  farming community

• Mobilize the micronutrients in soil to maximise
  their utilisation by the growing plant
• Work specifically against certain pests, without
  harming other organisms
• Since they are living strains, they assimilate
  into the ecosystem without leaving any toxic
  residue

Difference
Due to recent technological advances and
increasing environment and safety concerns,
biologically-derived products are becoming
increasingly important components of Integrated
Pest Management
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Management Team
Management team comprises of a core team of 35
senior technocrats, scientists and sales
professionals
Name
Designation
Qualification
Experience
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Agenda
Overview
Industry
Company profile
Future Roadmap
Financials
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Shifting demand from Pesticides to Biocides
India currently consumes only 2 of worlds
pesticides usage resulting in large amount of
crop yield loss (18 of the crop yield worth Rs.
900 bn) every year
Low usage of Crop Protection Products at Present
High emphasis on achieving food sufficiency is
expected to drive huge demand for crop protection
products in future
Huge Expected Future Demand
Hence, the potential of Biocide market is the
total Pesticides market (US 1.7 bn by 2012 in
India)
20 of food products with residue above tolerance
level in India compared to world average of 2
Impact from use of Pesticides
Source SBICAP Report (Mar, 2010)
The increasing awareness about poisonous chemical
pesticides will shift the demand from pesticides
to Biocides which are very effective and
eco-friendly
Biocides as Replacement for Pesticides
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Growth Drivers
Increasing Population
Rising Per Capita Income
High emphasis on achieving food grain self
sufficiency.
Limited Farmland
Low Yield
Use of high yield seeds bio-fertilizers to
improve productivity
Low access to fertilizers high yield seeds by
neighboring countries
Indias vast collection of germplasm coupled with
its RD capabilities
India to emerge as an export hub
Increasing min. support prices of agricultural
crops
Rising demand for commodities
Driving the use of quality agricultural inputs
Apart from above factors, increasing demand for
organic products together with increasing
awareness, growth of Horticulture
Floriculture, support from Government and lower
cost of usage is expected to drive future demand
for Bio-tech products
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Agenda
Overview
Industry
Company profile
Growth Drivers
Future Roadmap
Financials
26
Ready to lead the Agricultural Biotechnology
Sector
Equipped to Spearhead the Agri- Biotechnology
Sector



Integrated Player
First Mover Advantage Biocides
Camson _at_ Inflection Point
Competitive Advantages

• All set to leverage the hard work put in over the
  last one and half decades. A typical biocide
  research takes 9 12 years. Similarly it takes
  5-6 years to launch a new hybrid.

• India's first wholly integrated agricultural
  biotech company with presence in hybrid seeds and
  agricultural biotech products

• Has a first mover advantage in certain product
  categories. Its future growth will depend on its
  ability to leverage the growth potential in
  replacing the chemical pesticides using the
  residue-free platform.

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Surmounting Challenges
The company can however patent the hybrid seeds
in the US. However, through the Plant Breeders
right which would be implemented from Sept/Oct
2010, the seeds of a company are protected and
can also be licensed.
Hybrid seeds cannot be patented in India
Patent Filing
However, the new facilities being set up will
take care of these concerns.
Unexpected increase in demand
Production Capacity
Camsons products have already been received
enthusiastically by the farmers. It has adopted a
multi pronged approach through demos,
advertisements and disseminating information of
good farming practices success stories of
products
Illiterate farmers and hence poor acceptability
Illiterate farmers
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Camsons Goals
Focusing RD efforts on developing effective
technologies for raising crop productivity,
protecting the environment and improving health
and quality of life
Capitalising on strong and well-balanced
portfolio with a special focus on innovative
bio-products
Remaining focused on innovation and operational
excellence
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Agenda
Overview
Industry
Company profile
Camson Advantage
Growth Drivers
Future Ahead
Financials
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Financial Highlights
Amount (Rs. in cr)
Particulars FY 2005-06 FY 2006-07 FY 2007-08 FY 2008-09 FY 2009-10
Revenue 8 18 42 49 80
EBITDA 3 4 9 10 17
EBITDA Margin 30 25 21 19 21
PAT 2 3 8 8 15
PAT Margin 22 19 19 16 19
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First Quarter Results FY 2010-11
Particulars Q1 FY 2010-11 Q1 FY 2009-10 Change
Revenue 20.71 19.65 5.39
EBITDA 5.29 3.98 32.91
EBITDA Margin 25.6 20.3
PAT 5.41 3.72 45.43
PAT Margin 26.2 18.9
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Appendix
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Regulatory Aspects Current Regulations
The seeds sector has witnessed many changes since
1966 when the existing Seeds Act was passed.
These include new technologies such as GM seeds
and the entry of private and foreign seeds
companies. In order to address these changes, the
proposed Seeds Bill, 2004 seeks to replace the
Seeds Act, 1966. The changes include regulation
and registration of all seeds to be sold (instead
of only notified kinds), provisions for
self-certification and accreditation of private
seed testing laboratories, and regulation of
transgenic seeds.
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Regulatory Aspects Seed Bill 2004
Certification Registration of Seeds
Registration of Seeds
Consumer Protection
Aim of the Bill
Farmers Rights

• The Bill aims to regulate the quality of seeds
  sold, and replaces the Seeds Act 1966
• Transgenic variety of seeds will still need
  clearance under the provisions of the Environment
  (Protection) Act, 1986 before being registered. A
  variety of seed containing any technology
  considered harmful or potentially harmful shall
  not be registered.

• All varieties of seeds for sale (except those
  sold by farmers directly) have to be registered.
  The seeds are required to meet certain prescribed
  minimum standards
• The Bill proposes to establish a Central Seed
  Committee CSC), which may appoint Sub-Committees
  as needed. One of the subcommittees will be the
  Registration Sub Committee, which shall maintain
  a National Register of Seeds for all varieties of
  seed.
• Every State Government will establish a State
  Seed Committee which will have an advisory role

• The Bill protects the right of a farmer to save,
  use, exchange,
• share or sell his farm seeds and planting
  material
• However, the farmer cannot sell seeds or planting
  material under a brand name (if he does then they
  have to be registered)
• Also, all seeds sold by farmers need to conform
  to the minimum standards regarding germination,
  physical purity and genetic purity applicable to
  registered seeds

• For all registered varieties, seed producers,
  distributors and vendors have to disclose the
  expected performance under certain given
  conditions
• If a registered variety of seeds fails to perform
  to expected standards, the farmer can claim
  compensation from the producer or dealer under
  the Consumer Protection Act, 1986

• The Bill permits self certification of seeds by
  accredited agencies and allows the central govt.
  to recognise certification by foreign seed
  certification agencies
• Every seed producer and dealer, and horticulture
  nursery has to be registered with the State
  Government.

The Seeds Bill was introduced in the Rajya Sabha
on 9 December 2004. Through registration and
certification, the draft law seeks to promote
quality seeds
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Thank You
Camson Biotechnologies Ltd No. 223, First Main,
Domlur Second Stage, Bangalore - 560071. Tel
0091 080 2535 5138 Fax [phone] Email
info_at_camsonbiotechnologies.com Website
www.camsonbiotechnologies.com