Kaveri Seeds has become the first seed producing company in the world to have multiple lakh acres under seed production. Almost half of their land is concentrated in and around Telangana and Andhra Pradesh. The company has devoted a bulk of the land area to non-cotton sector, mainly towards high-margin hybrid rice, vegetable seeds, and maize.
Executive Director of Kaveri Seeds Mithun Chand told media persons, “the shift towards high-margin non-cotton segment is primarily to de-risk the dominant business model centered on cotton in India and create new growth avenues.”
At present, hybrid rice contributes about a quarter of the income of Kaveri Seeds. It has emerged as the second-biggest income contributor after cotton.
Mithun Chand added, “the Indian hybrid rice seed market is currently estimated at around Rs. 10,000 crore in value and around 2 lakh tonnes in volume, where Kaveri has seen its hybrid rice business growing at 45% in the last 5 years as against the industry average of around 8%.”
He further stated, “with an over 10% share of the Indian hybrid seed market, as the 2nd largest producer of hybrid cotton seeds, 3rd largest producer of hybrid maize seeds, and 5th largest producer of non-cotton hybrid seeds like rice, Kaveri Seeds with zero debt will focus on high margin niche segments and geographies – not just in India but worldwide in exports.”
The company is estimating its income to rise 15% a year, double the business common of 7%, thanks to the wholesome combination of high volume cotton and high value maize, rice, and vegetable seeds. It can also anticipate business excessive profitability of 15-20%.
This Hyderabad-based seed giant entered the non-cotton sector and found the market highly profitable and full of opportunities. Due to the unregulated nature of this sector, the company saw a huge potential for penetrating the market and harnessed it well.
