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Camson Biotechnologies Limited

Camson Biotechnologies Limited. A leader in Agricultural Innovation. Overview. Overview. Activity. Competitive Advantages. Growth over the Years. Business verticals: Seeds Biocides & Bio fertilizers. India's first integrated agricultural biotech company

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Camson Biotechnologies Limited

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  1. Camson Biotechnologies Limited A leader in Agricultural Innovation

  2. Overview

  3. Overview Activity Competitive Advantages Growth over the Years • Business verticals: • Seeds • Biocides & Bio fertilizers • 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 06–10) • Consistent EBITDA Margins of 19% + in last 5 years • Consistent PAT Margins of 16% + in last 5 years Financials (Amt Rs. in cr) Revenue EBITDA PAT Source:

  4. Vision & Mission Vision: “Camson visualisesa 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.” Source:

  5. Agenda Overview Industry Company profile Growth Drivers Future Roadmap Financials Source:

  6. Indian Agriculture Industry Reducing Arable Land due to Rapid Industrialisation Growing Population 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) 0.33 ha 0.14 ha 0.05 ha 1951 2001 2035 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 Source:

  7. 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 2.6 2.3 1.6 2001 2002 2003 2004 2005 2006 2007 2008 Market size Yoy growth (%) 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 world’s food grains; responsible for only 2% of world’s pesticides usage. • Approx. 18% of the crop yield worth Rs. 900 bn is lost due to pests every year in India. Others Vegetables Wheat Chilli Rice Cotton Global Pesticide Consumption 25% 12% 9% Others Soya Cotton Maize Rice Fruits & Veg Source: CARE Report, Mar 2010 Source:

  8. 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 Source:

  9. Hybrid Seeds v/s Genetically Modified (GM) Hybrid Genetically Modified (GM) Difference • Crossbred species of a two closely related but different parent vegetables • Taking desirable gene sequences from other plants (and even animals) Process • Hybridisationhappens regularly in nature when closely related species cross-pollinate • Only happens in the laboratory because it combines DNA from organisms (plants or animals) outside of a vegetable's species Long-term Effect • Hybrid vegetables have a favorable public opinion since they have existed naturally for centuries • 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. Source:

  10. Advantages of using Hybrid Seeds in Horticulture • Commercial sowing in off-season gives high yield and better economical income to the poor growers • 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 Higher Returns to the Farmers Greater Productivity Better Adaptability Better Quality Produce • Have wider adaptability to various environments • Possess the characteristics suited to off-season production • Fresh, attractive and free from disease • Better transport quality • Suitable for processing Source:

  11. Agenda Overview Industry Company profile Growth Drivers Future Roadmap Financials Source:

  12. 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 R&D Unit recognised by Govt. of India, Ministry of Science and Technology, New Delhi Exclusive Agreement with Government of Uttarakhand Started Operations 2009-10 1993 2004-05 2007-08 1995 2005-06 2007-08 Became a Public Limited Company Identified as One of the Fastest Growing Technology Companies and placed at 17th in the Technology 50 India 2008 Programme conducted by Deloitte Touche Tohmatsu, Asia Pacific Collaborative Research Agreement on Molecular Genetics with the University of Dharwad, Karnataka Camson’s 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 R&D facilities • First Indian company to produce watermelon with yellow skin Source:

  13. 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 • 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 • Biocides • In house library of 3700 selected and characterised microbes • Effective in controlling various pests and pathogens • Leading edge in innovating/ formulating effective biocides Challenges for Farmers • Solutions by Camson • Supply to the increasing global demand for food • Reducing the negative impact of crop protection practices on consumers, farm workers and the environment • 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 Source:

  14. Strong Product Portfolio Product Segments Hybrid Seeds Biotech Products (Bio-fertilizers and Biocides) Revenue Contribution Approximately 64% Approximately 36% Product Matrix (till date) Hybrid Seeds (48 varieties) Biotech Products Type (27 Variants) Watermelon (5) Tomato (11) Chilly (4) Brinjal (15) Okra (3) Bitter Gourd (4) Bottle Gourd (2) Sponge Gourd (2) Sweet Corn (1) Musk melon (1) • Biofungicides (6) • Bio Insecticides (9) • Bio Stimulants (6) • Bio-Fertilisers(6) Product Features • Longer shelf life • Higher realisation due to unique characteristics • Offer great protection period • Pests/insects do not develop resistance to biocide even after multiple uses • Fewer sprays, in turn saves labour cost • Greater yield per acre • Zero residue product • Can be used along with chemical pesticides • Cater to wide range of crops Source:

  15. Pioneer Products Seed Product Portfolio Biocides Product Portfolio Source:

  16. 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 R&D centre and production facility in Dodaballapur;also in process of developing another R&D center in Dodaballapur Target Markets Target Farmers : • 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 Source:

  17. 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 • To reach farmers directly organises various kinds of trials and demonstrations Free Consultancy • Give general advice to farmers on various products and also write out “prescriptions” on appropriate usage of biocides along with seeds Source:

  18. Manufacturing Facilities Quick Facts Manufacturing Facilities • 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 Source:

  19. Strong R&D 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 R&D Facilities • Already has its 25 acre R&D centre and production facility in Dodaballapur • R&D facility in Aligarh, UP & planning to set up another R&D center at Dodaballapur Recognition • In-house R&D Unit recognised by Govt. of India, Ministry of Science and Technology, New Delhi • 22 biocides Developed a proprietary technology platform • Consisting of a microorganism database, screening technology and a natural product compound library • 7 bio-fertilizers • 17 hybrid seeds • The ongoing research will add another 70 more varieties of seeds 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 Source:

  20. Camson’s 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 maximisetheir utilisationby 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 Source:

  21. Management Team Management team comprises of a core team of 35+ senior technocrats, scientists and sales professionals Name Designation Qualification Experience Mr. Dhirendra Kumar Managing Director M.Sc. Ag., MBA • Total of 27 years of experience. Has extensive expertise, especially in promotion and marketing of agricultural products. Mr. A N Singh Non-Executive Director M.Sc. Ag • Has worked for over 40 years in the agricultural sector. Was with the Ministry of Agriculture, Govt. of India & retired as Additional Commissioner. This was followed by assignments as a Consultant to the World Bank. Krishnaswamy Ramaswamy Iyer Non-Executive, Independent Director B.A (Hons), LLB, CAIIB • Has over 42 years of experience in the banking and financial services industry. Has held positions like DGM, SBI; President, San Paola Hambro Finance; MD, EXIM Bank of Tanzania & CEO, Nepal Industrial & Commercial Bank. Virendra Kumar Singh Non-Executive Director Master of Engineering degree, MBA. • He has worked extensively in the automobile sector, innovating and developing new vehicle prototypes, and managing production and sales. He has also been a first-generation entrepreneur running a successful venture of environmentally-viable infrastructure focused on the gainful use of solar energy. B. C. Madappa Non-Executive, Independent Director Bachelor of Science degree • Madappa has over 30 years of experience in media and allied industries. He was responsible for the creation and incubation of India’s first professional PR firm and also India’s first direct marketing firm in collaboration with global industrial leaders. Dr Anirudh Kumar Singh Non-Executive, Independent Director M.Sc. in Plant Pathology and a Ph.D • He has over 30 years of experience in Plant Genetics and BreedingDr Singh has published several research articles in reputed national and international scientific journals. Sanjay Agarwal Non-Executive, Independent Director M.Com. • Agarwal has over 20 years of experience in managing finances, backward integration and global expansion. For over two decades, he has played a major role in making K S Oils a successful and globally integrated venture Source:

  22. Agenda Overview Industry Company profile Growth Drivers Future Roadmap Financials Source:

  23. Shifting demand from Pesticides to Biocides • India currently consumes only 2% of world’s 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 Source:

  24. 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 India’s vast collection of germplasm coupled with its R&D 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 Source:

  25. Agenda Overview Industry Company profile Growth Drivers Future Roadmap Financials Source:

  26. Ready to lead the Agricultural Biotechnology Sector Equipped to Spearhead the Agri- Biotechnology Sector Integrated Player First Mover Advantage – Biocides Camson @ Inflection Point Competitive Advantages • India's first wholly integrated agricultural biotech company with presence in hybrid seeds and agricultural biotech products • 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. • 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. Source:

  27. Surmounting Challenges • Hybrid seeds cannot be patented in India • 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. Patent Filing • Unexpected increase in demand • However, the new facilities being set up will take care of these concerns. Production Capacity • Illiterate farmers and hence poor acceptability • Camson’s 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 Source:

  28. Camson’s Goals Focusing R&D 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 Source:

  29. Agenda Overview Industry Company profile Camson Advantage Growth Drivers Future Ahead Financials Source:

  30. Financial Highlights Amount (Rs. in cr) Source:

  31. First Quarter Results – FY 2010-11 Source:

  32. Appendix Source:

  33. Regulatory Aspects – Current Regulations SEEDS ACT, 1966 & SEED Rules, 1968 • Provide basic regulatory structure to ensure seed control in India. The Act provides for compulsory quality control and voluntary certification of seeds of any notified kind and variety and truthful labeling of seeds. The Act also created the various seed regulatory bodies and defined their functions & provided guidelines on minimum limits of germination and purity, regulation of the sale of seed, certification, etc. Seeds Control Order, 1983 (under the E C Act, 1955) • This order was issued under the Essential Commodities Act, 1955, and provided the procedure for registration of every person carrying on the business of selling, exporting or importing seeds of a notified kind or variety. New Policy on Seed Development, 1988 • This policy relaxed norms for the import of technology and parental material, and opened the doors to MNC seed companies. However, the policy allowed imports only if the foreign supplier supplies the parental line seeds or breeder seeds to the Indian company within two years of the first consignment. The Protection of Plant Varieties and Farmers‘ Rights Act (PPVFR), 2001. • It recognises the need to protect the plant breeder’s right so as to stimulate R&D in both the public and private sector. It defines the process for plant variety registration and also requires disclosure of the expected performance under given conditions. The Act gives the farmer the right to claim compensation if the seeds does not perform as expected. It also extends the breeders’ right to production, selling, marketing, distribution, export and import of seeds and/or propagating material of protected variety. The Protection of Plant Varieties and Farmers‘ Rights Act (PPVFR), 2001. • This policy laid down the foundation for comprehensive reforms. It included implementation of an effective sui generic system for intellectual property protection to stimulate investment in R&D of new plant varieties. The policy also acknowledged the need to adopt technology and protect the farmer from exploitation. 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. Source:

  34. 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 RajyaSabha on 9 December 2004. Through registration and certification, the draft law seeks to promote quality seeds Source:

  35. Thank You Camson Biotechnologies Ltd No. 223, First Main, Domlur Second Stage, Bangalore - 560071. Tel: 0091 080 2535 5138 Fax: 0091 080 2535 2232 Email: info@camsonbiotechnologies.com Website: www.camsonbiotechnologies.com 590076 CBTL IN CAMS.BO Source:

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