Jain foresees micro-irrigation business growing twice as fast as food

Jalgaon-based Jain Irrigation Systems (JISL) expects its micro-irrigation systems business to grow at more than 40% annually in the coming years despite growing competition, said managing director Anil B Jain.

It foresees its food processing division growing at 15-20%.
“In the last five years MIS has grown at about 35% and food processing 25-30% on a smaller base,” Jain told DNA.

JISL is the world’s second-biggest MIS player, after Israel’s Netafim, and India’s largest.

MIS consists of drip and sprinkler irrigation, with the former accounting for nearly 80% of the Rs3,000 crore market in India.
Jain said the Indian market is quite unorganised with a lot of players, especially in sprinkler irrigation, but the company is coming out with new products to stay ahead of its rivals including, besides Netafim, Nagarjuna Fertilizers & Chemicals and Premier Irrigation Adritec. JISL recently started selling solar water pumps.

“Currently, farmers use diesel or electricity to run their pumps but with solar pumps they will save a lot of money though the initial cost is high,” Jain said. He said the government has a scheme that provides subsidies to farmers on purchase of solar pumps.

“The government will spend less on the scheme than it does on providing cheap electricity to farmers.” The company hopes its expertise in the entire value chain of farming will help it keep its lead in the market. JISL has spent about Rs40 crore on research & development this year.

“It’s not a percentage of our topline, it’s based on our needs,” Jain said. JISL’s initiative to take drip irrigation to small and marginal farmers in Haiti in association with the Bill & Melinda Gates Foundation and Coca-Cola is now the subject of a case study by Harvard Business School.

MIS accounts for half of JISL’s revenues, with PVC pipes and food processing contributing 29% and 15%, respectively. The rest comes from segments solar energy and tissue culture.
For the three months ended September 30, JISL’s standalone topline grew 16% to Rs637 crore from a year ago and net profit jumped 46% to Rs62 crore.

Talking of the unseasonal and heavy rains last year, Jain said the company could not process large quantities of onion owing to the monsoon. “But the farmers have planted more crops for the second season in March-April, supplies will go up then,” he said.
JISL is the world’s second-largest producer of dehydrated onions and third-biggest processor of mangoes. It also processes other fruits like papaya and banana. JISL supplies mango pulp to Coca-Cola India, which recently announced it would be sourcing from orange pulp from JISL.

“We are just setting up a nursery for the crops, it will take another three years before we can start supplying,” Jain said. JISL had in November acquired 80% in UK’s Sleaford Quality Foods for an undisclosed sum. This was its second buy in the food processing space after its acquisition in 2006 of Oregon, US-based Cascade Specialties.