GSP to invest ₹500cr to increase production capacity to reduce reliance on China
GSP Crop Science Pvt Ltd, an agrochemical manufacturer, wants to invest around ₹500 crores in Saykha, Gujarat, to increase its production capacity of technicals and intermediates over the next five years, reducing its reliance on China.
According to Bhavesh Shah, Managing Director of GSP Crop Science, capacity utilization at the business’s production sites in Gujarat has reached 80%, leading the company to pursue growth ambitions.
The anticipated expansion will cut the company’s reliance on China for technicals to roughly 30-40% from the present 80%. The firm has formulation and technical production operations in Gujarat at Nandesari, Saykha, and Jammu.
It now manufactures 14 intermediates and intends to add additional 4-5 intermediates as part of the projected growth plan, which would be mostly supported by internal accruals, according to Shah.
GSP Crop Science is a debt-free firm, with the only institutional investor being the Oman India Joint Investment Fund. The Shah family owns around 85% of the corporation.
In the domestic market, the firm sells agrochemicals such as insecticides, fungicides, and herbicides under 60 different brands for a variety of crops such as paddy, cotton, wheat, soyabean, groundnut, and vegetables.
It also sells agrochemicals to over 30 nations, including Brazil and the United States. According to Shah, Brazil is the company’s top export market. GSP Crop Science also manufactures agrochemicals on a contract basis for both domestic and international companies.
The firm earns 45-50 percent of its revenue from product sales in India, 30 percent from exports, and the remainder through contract manufacturing. GSP Crop Science recorded a net profit of ₹69.57 crore on revenue of ₹1,136.91 crore in FY21.
‘We hope to reach a revenue of ₹1,350 crore in the current fiscal year, ₹1,750 crore in the following fiscal year, and ₹2,500 crore by 2025,’ he added. The firm has a distribution channel of roughly 5,000 distributors and is extending it by 500-600 distributors every year.
‘By 2025, we hope to have over 8000 distributors,’ Shah stated. In terms of market share, Maharashtra is the company’s largest state.
GSP Crop Science, which is ranked among the top 20 agrochemical companies in the country, aims to be ranked among the top 10 within the next three to four years, according to Shah. In addition, Shah stated that the business is working to introduce additional green chemical goods into the Indian market.