The revenue distribution of the company in these segments is as follows:
Public Private Partnership (PPP):
Through their PPP with Governments of Rajasthan, Gujarat, Odisha and Karnataka they enhanced the yields and incomes of ~ 9 lacs small and marginal tribal farmers. They also launched a pioneering customer connect initiative e – Dr. DeKalb Farm Care (DDFC), a mobile based farmer advisory service.
Business Units, Products and Revenue Share:
Some highlights on numbers:-
The company, however, discontinued all other businesses and currently focuses only on agrochemical business.
The parent has set up a research and development (R&D) center in Bangalore, which houses around 100 scientists. This R&D base which also does its research in bio-informatics is expected to become R&D hub for Asia.
Parent company
The parent company was incorporated in the year 1901. Almost after a century, Monsanto was merged with Pharmacia & Upjohn globally, in 55 countries, to form Pharmacia Corporation (PC). In October, 2000 PC made a partial initial public offering (IPO) of 15 % of its holding to enable the listing of Monsanto as a stand alone company, focused entirely on agriculture.
This made it a 'Century Old Brand New' company.
This company now works with a mission of 'delivering products and solution to all the food producers and fiber needs for human growth along with conversing natural resources and improving the environment.
The parent company has its single focus on agriculture business. It exited from pharma and chemical business to focus only on agrochemical business.
The feature of this company is now:
Leading provider of agriculture products to farmers.
Its unique platform helps them to provide integrated solutions to:
Improve farm productivity.
Reduce cost of farming.
Its two key biz of operations are ;
Agrochemical productivity.
Seeds and genomics.
Pursue goals that drive value creation for 'farmers' and its 'shareowners.'
15000++ employees worldwide.
Its R&D center in St. Louis, USA was set up in 1994 with the state of the art facility on over 180 acres of land. It has 2100 employees in R&D (including doctors, etc) and has 250 laboratories. It has 100 growth chambers.
The company invests over $ 500 million in R&D every year.
The global R&D focuses on:
Biotech and chemical discovery
Molecular breeding
Breeding and testing
Its customer focus technology platform includes:
Wed management
Pest Management
Grain yield
Crop productivity
Feed, food and fiber
Plant protiens
The company claims to have integrated functions, identified bottlenecks and created solutions resulting in better and faster sources of value creation.
Global agrochemical biz
There is a great scope for the agrochemical business due to the following reasons:-
The current food production will be inadequate to satisfy the growing demands of the future. It is expected that while the population will be higher by 30 % in 2020, the food demand would increase by 75 % from the current levels.
New land resources for development is nearly exhausted.
And current farming practices are not sustainable. Thus there will be demand for new technology in the agrochemical business and this business is bound to grow rapidly.
Monsanto has always lead the agrochemical company.
Product innovation are in the form of:
- Acetanilides
- Roundup
- Bio technology
- Genomic
Marketing innovation are in the form of:
- Roundup price elasticity (Roundup is sold in 125 countries).
- Supply agreement (with Dow, Dupont, etc)
- Seed acquisition (invested $ 6 billion in seed acquisition)
- Growing licenses
- Down stream alliances
Competition:
The company faces competition from BASF, Syngenta, Bayer, Dow, Dupont. However, Monsonto claims to have grown with the highest growth rate in the industry in the recent past. It further hopes to become a leading player in the biotech segment.
Thus Monsanto is different from other companies because:
- It has strong chemistry business (products like Roundup, Harness, Pgilac)
- It has strong seed business (products like Asgrow, Hartz, Dekalb)
- Growing in Traits business which helps farmers to manage insect pressure better.
- It is said to be Coca-Cola of agrochemical business
Monsanto has right assets and capability in place to succeed. It has the right strategy and focus. It is the organization which has aligned with growth strategy and has created a 'winning' environment.
Indian Integration
Monsanto India was the first company in India to take a bold decision of integrating its Indian agrochemical operation. This:
Is in line with global realignment
Confirms the parent's commitment to Indian farmers and shareholders.
Currently it is a premier agrochemical input company in India.
The company's position in the Indian industry:
Monsanto India was the first company in India to take a bold decision of integrating its Indian agrochemical operation. This:
Is in line with global realignment
Confirms the parent's commitment to Indian farmers and shareholders.
Currently it is a premier agrochemical input company in India.
The company's position in the Indian industry:
- It is a company with access to robust product pipeline.
- It is a company committed to market development and farmers value.
- It is a company, which is committed to long-term and sustainable growth in India.
Future
Fundamentals for growth
- Stable macroeconomics indications.
- Continued economic liberalization.
- Growing population (expected to grow at 1.5% to 1.8% PA)
- Increasing personal income levels.
- Need to grow 100 million tonne (50% more than current levels) more food by 2020 to meet the growing population demands.
- Need to increase food productivity:
- New technology / agrochemical inputs hold the key. This will ensure increase in productivity.
- Monsanto India is a leading provider of seeds, herbicides and Traits.
Mission:
To provide unique products and solution that will help enhance agrochemical yields and improve enviornment quality in a sustainable way resulting in growth of the company's revenues and incomes.
The company has 5 operating principles. They are:
- All employees to take the ownership of the company's success.
- Deliver highest quality product and technology.
- Building strong relationship (with dealers, customers, farmers, etc)
- Creating a great place to work.
- Conducting itself with integrity.
3 Phase Buying Strategies Suggested [Always buy in SIP ways]
ü 1st Phase : Buy at the current price range Rs 2800 – 2900 [30% of investment]
ü 2nd Phase : Add if the price falls down to Rs 2100-2200 [30% of investment]
ü 3rd Phase : Add if the price falls down to Rs 1400-1500 [40% of investment]
I just bought on my own research :) Risk is always associated in stock market - do your own study before investing :) Will you buy the stock? I don't know. It's really up to you. Moreover, you can rationalize whatever you choose :)
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