Transcript UPL’S PLAN OF ACTION

ABOUT ADVANTA
Presence in Australia, Argentina, India and Thailand and it caters to other
Asian and African markets from these countries.
Revenues for FY 2005 (Proforma Nos.)
Approx EUR 61 mio
By Company
Australia
Argentina
India
Thailand
-
59%
11%
17%
13%
Main Crops
OIL SEEDS (Canola), SORGHUM (Grain & Forage), CORN, RICE.
EBIDTA of approx EUR 10.5 – 11 mio
Spend over 7% on R & D
The following operations make up the global
Advanta business today:
Name
Pacific Seeds
Australia and
Region of Operation
Grain and forage sorghum, sunflower, corn,
International
tropical corn, hybrid canola, OP canola, oats
Advanta India
India
Pacific Seeds (Thai)
Thailand
Advanta Semillas
Argentina
SUNSAT
Global
Compañía Internacional
de Semillas
Chile
Major Crops
Hybrid rice, hybrid mustard, hybrid corn,
sunflower, grain and forage sorghum, pearl
millet, cotton
Field corn, baby corn, sweet corn,
sunflower, grain, forage sorghum
Hybrid sunflower, grain and forage,
sorghum, corn
SUNSAT oilseeds
50% joint venture of local sales and seed
production operations
Pacific Seeds (Australia and
International)
• Largest seed company in Australia with 40+ year track
record of superior performance.
• Significant equity in the Pacific Seeds brand both locally
and internationally.
• Diversified crops and seasons (key crops: canola,
sorghum, corn, sunflower and oats).
• Established and rapidly growing international business
with sales to Central and South-east Asia, Middle East
and South/Central America with opportunity for
continued expansion.
Advanta India
•
A leading seed company in India with 10+ year track
record of profitable operations.
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The Indian market has vast scale and is one of the
fastest growing seed markets in the world.
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Accelerating conversion from OP to hybrid.
Advanta India is strategically positioned in key crops
such as rice, hybrid mustard, sunflower and corn.
• Export and seed production opportunities not yet fully
realized.
Pacific Seeds (Thailand)
• A leader in key tropical vegetable crops with number one
position in both sweet corn and baby corn.
• Excellent growth prospects, especially in sweet and baby
corn markets, where tropical types are increasingly
attractive to processors.
• Growth opportunities in other areas of South-east Asia
(e.g., Vietnam, Myanmar, Laos, Indonesia)
Advanta Semillas (Argentina)
• Established and highly recognized brand in sunflower.
• Grain and forage sorghum breeding program in Argentina
has significant internal and international potential for the
North, Central and South Americas.
SUNSAT
• R&D cost effectively located in Argentina, but a truly global
opportunity.
• Non-GM, modified oil sunflower program with proof of concept
established and in the process of being scaled up for 2010
launch.
• Oil quality that provides healthy balance of saturated and
unsaturated oils together with the elimination of trans-fat
risks.
• The oil produced has properties tailored to the needs of various
sectors of the food industry, such as healthy oil content,
plasticity for margarine and spread production (without the
need for partial hydrogenation), and stability.
• Advanta has exclusive control of intellectual property in these
seeds, plants, and oils.
Compañía Internacional de Semillas
(Chile)
•
Long established joint venture company with a highly respected local
partner, Laserco S.A.
• Excellent reputation as a counter-season producer of seed for North
American, European and Australian/Asian customers.
• Active in counter season production of a range of crops, including
corn, sugar beet, sunflower and canola.
• Active in local Chilean market with sales of sugar beet, corn, and
forage seeds
HISTORY OF ADVANTA
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Originally formed as a seed joint venture by Royal Vanderhave
Group of Netherlands and Zeneca Seeds in 1996.
In 2004 this was sold to Syngenta and from Syngenta to Fox &
Paine when Syngenta was created by the merger of Agchem
business of Zeneca & Novartis.
Since 2004 Fox & Paine sold various business’s
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North Amercian business of Corn to Syngenta
Canola business in North America to Monsanto
Non Sugarbeet business and other business’s (excluding this
business and Sugarbeet business) to Limagraine.
Sugarbeet to Florimond Desprez.
This was the last seed business bought by UPL
SEED INDUSTRY
Future of Agriculture is going to be determined by Seeds
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Better yields / productivity improvements
Better Quality
Value added features.
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Fastest growing sector in Agriculture in India and expected to double in
the next 4 to 5 years from $1 Bn currently to $2 Bn
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A lot of R & D in both bio-technology and Non-biotechnology space
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Highly regulated for bio-tech space
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3 to 5 years of development time frame for each hybrid.
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Need to have a continuous pipelines of hybrids
DYNAMICS OF THE SECTOR
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Impacted by rains, weather conditions (same as Agchem).
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First in the agricultural cycle (only once) v/s Agchem which follow
through the entire cycle.
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Highly Inventory intensive.
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High lead times to produce (hence need very careful forecasting)
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Quality and characteristics of the product very critical.
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Need to continuously upgrade the germplasm.
WHY ADVANTA
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Allows us to jump start our entry into Seeds.
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Largest and best positioned independent seed company in the high growth
Asia-Pacific region and were able to acquire at a decent valuation.
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Strong market positions in each region and product.
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Access to excellent, elite and proprietary germplasm (very critical)
portfolio – integrated with bio-science capability.
 takes decades to develop
 speeds up plant breeding
 not easily replicable.
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20 years of track record of sales, growth and profitability.
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Experienced Management team with decades of industry experience.
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Developing ‘SUNSAT’ a new high tech breeding program in Sunflower with
opportunity for downstream value capture.
WHY SEEDS
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Common distribution channel plus customer (farmer) and
Same sector Agriculture.
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Captive market for UPL’s seed treatment business as well as
develop new capabilities in this sector.
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Equally protected industry due to its high IP requirement
plus protection of the germplasm.
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Most global majors are investing in this sector due to these
reasons (e.g. Monsanto, Syngenta, Dow, etc.) and UPL
believes that it should also align itself to derive the future
benefit.
It meets our internal hurdle rate of return.
UPL’S PLAN OF ACTION
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Participate in this exciting Industry Sector
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Synergy in Distribution / Product Leverage for Expansions
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Build a platform to enable us to rapidly expand in this sector
in 3 to 5 years down the line
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Use India’s efficient and cost advantageous knowledge and R
& D efforts to build in this sector
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Reduce our eventual exposure to EUR 30 - 35 mio with 49 51% ownership.
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To come back to shareholders with a revamped structure
within 3 months