11/25/2009 11/25/2009 11/25/2009 11/25/2009 1 1 Energizing Earth Energizing Earth Energizing Earth Energizing Earth NOVEMBER 2009 2 Background Aries Agro Ltd was founded by Dr. T. B. Mirchandani and Mrs. Bala Mirchandani in 1969 1969 1969 1969 The Company started by manufacturing a small range of mineral feed additives for animals & birds Through in-house R&D efforts, the company branched out into Agrochemicals in 1975 with the introduction of Chelated Chelated Chelated Chelated Micronutrients Micronutrients Micronutrients Micronutrients. Aries Agro Ltd is a pioneer pioneer pioneer pioneer of of of of Agricultural Agricultural Agricultural Agricultural Chelates Chelates Chelates Chelates in India, using indigenously developed technology for Chelation and Complexing of Multi Micro Nutrients. In 2001, Aries expanded its product line to include secondary secondary secondary secondary nutrients nutrients nutrients nutrients – sulphur, magnesium and calcium. 2004 saw the further addition of water water water water soluble soluble soluble soluble NPK NPK NPK NPK fertilizers fertilizers fertilizers fertilizers. The company manufactures a wide range of products under 65 65 65 65 Brands Brands Brands Brands. Products include Plant nutrients, crop protection chemicals and Veterinary products. Six Six Six Six manufacturing plants with capacity of 84,600 tpa. capacity of 84,600 tpa. capacity of 84,600 tpa. capacity of 84,600 tpa. Wide network Wide network Wide network Wide network of 25 branches, 4900 distributors and 70000 retailers across 22 states of India Investment in Golden Harvest, Sharjah - to set up unit to manufacture 10,800 tpa of Chelated Micronutrients 10,800 tpa of Chelated Micronutrients 10,800 tpa of Chelated Micronutrients 10,800 tpa of Chelated Micronutrients. Through Golden Harvest, Aries has invested in Amarak Chamicals FZC for manufacture of 60,000 tpa of 60,000 tpa of 60,000 tpa of 60,000 tpa of Sulphur Bentonite Sulphur Bentonite Sulphur Bentonite Sulphur Bentonite
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11/25/200911/25/200911/25/200911/25/2009
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1Energizing EarthEnergizing EarthEnergizing EarthEnergizing Earth NOVEMBER 2009
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Background
� Aries Agro Ltd was founded by Dr. T. B. Mirchandani and Mrs. Bala Mirchandani in 1969196919691969
� The Company started by manufacturing a small range of mineral feed additives for animals & birds
� Through in-house R&D efforts, the company branched out into Agrochemicals in 1975 with the introduction ofChelatedChelatedChelatedChelated MicronutrientsMicronutrientsMicronutrientsMicronutrients.
� Aries Agro Ltd is a pioneerpioneerpioneerpioneer ofofofof AgriculturalAgriculturalAgriculturalAgricultural ChelatesChelatesChelatesChelates in India, using indigenously developed technology forChelation and Complexing of Multi Micro Nutrients.
� In 2001, Aries expanded its product line to include secondarysecondarysecondarysecondary nutrientsnutrientsnutrientsnutrients – sulphur, magnesium and calcium.2004 saw the further addition of waterwaterwaterwater solublesolublesolublesoluble NPKNPKNPKNPK fertilizersfertilizersfertilizersfertilizers.
� The company manufactures a wide range of products under 65656565 BrandsBrandsBrandsBrands. Products include Plant nutrients, cropprotection chemicals and Veterinary products.
� SixSixSixSix manufacturing plants with capacity of 84,600 tpa.capacity of 84,600 tpa.capacity of 84,600 tpa.capacity of 84,600 tpa.
� Wide networkWide networkWide networkWide network of 25 branches, 4900 distributors and 70000 retailers across 22 states of India
� Investment in Golden Harvest, Sharjah - to set up unit to manufacture 10,800 tpa of Chelated Micronutrients10,800 tpa of Chelated Micronutrients10,800 tpa of Chelated Micronutrients10,800 tpa of Chelated Micronutrients.
� Through Golden Harvest, Aries has invested in Amarak Chamicals FZC for manufacture of 60,000 tpa of 60,000 tpa of 60,000 tpa of 60,000 tpa of Sulphur BentoniteSulphur BentoniteSulphur BentoniteSulphur Bentonite
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Industry: Specialty Plant Nutrition Solutions
Source: Development of Education in India – 1990-93
Crops require above nutrients for balanced and healthy growth All nutrients are important for the growth of crops in varying quantities
Provided
by Air
Primary
Nutrients
Secondary
Nutrients
Micro
Nutrients
Provided
by Air
Primary
Nutrients
(water solubles)
Secondary
Nutrients
Micro
HHydrogen
CCarbon
OOxygen
NNitrogen
PPhosphorous
KPotassium
MgMagnesium
SSulphur
CaCalcium
SiSilicon
ZnZinc
FeIron
CuCopper
MnManganese
BoBoron
MoMolybdenum
The Aries The Aries The Aries The Aries Range Range Range Range addresses addresses addresses addresses these crop these crop these crop these crop nutrient needsnutrient needsnutrient needsnutrient needs
Change in Change in Change in Change in Cropping PatternCropping PatternCropping PatternCropping Pattern
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Strong Marketing network
� Aries has 309 trained marketing personnel
� 25 branches spread across 22 states
� First link of distribution channel has more than4900 distributors
� Direct access to 70000+ retail dealers
� Database of purchase records of 8mn+ farmerpopulation across 1,60,000 villages - oneoneoneone inininin sixsixsixsixvillagesvillagesvillagesvillages ofofofof IndiaIndiaIndiaIndia
� FlagshipFlagshipFlagshipFlagship BrandsBrandsBrandsBrands� Agromin (Chelated multi micro nutrients) –
produced in 107 different crop, soil and geographyspecific variants
� Chelamin (Chelated zinc)
2009-10 : New Product launches
� Bio Degradable Chelates (First time in India)Bio Degradable Chelates (First time in India)Bio Degradable Chelates (First time in India)Bio Degradable Chelates (First time in India)
Objective : Maximize Share of Wallet from Aries’ wide distribution networkObjective : Maximize Share of Wallet from Aries’ wide distribution networkObjective : Maximize Share of Wallet from Aries’ wide distribution networkObjective : Maximize Share of Wallet from Aries’ wide distribution network
Revenue Share Revenue Share Revenue Share Revenue Share First Half % First Half % First Half % First Half %
(Kharif season)
Revenue Share Revenue Share Revenue Share Revenue Share Second Half % Second Half % Second Half % Second Half % (Rabi season)
2006-07 38% 62%
2007-08 44% 56%
2008-09 47% 53%
2009200920092009----10 E10 E10 E10 E 40%40%40%40% 60%60%60%60%
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Wide Distribution of Revenues
Statewise Share of Revenues
MP
3%CG
3%OR
2%RAJ
5%
HAR
3%
GUJ
3%
HP
1%
BIH
4%
NE
2%
UP
8%
WB
15%AP
23%
MAH
17%UK
1%
JHK
0.1%
PJB
6%
TN
3%
KER
0.1%KAR
2%
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Bangalore
Kolkata
Mumbai
Hyderabad
Lucknow
Ahmedabad
Current Manufacturing Units
* Disclaimer: This map is for broad representational purposes only &
may not have accurate or exact national and international boundaries.
Nationwide Manufacturing Units
19,800 MT19,800 MT19,800 MT19,800 MT
10,800 MT10,800 MT10,800 MT10,800 MT
10,800 MT10,800 MT10,800 MT10,800 MT
1,650 MT1,650 MT1,650 MT1,650 MT
37,800 MT37,800 MT37,800 MT37,800 MT
3,750 MT3,750 MT3,750 MT3,750 MT
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Golden Harvest Middle East FZC, Sharjah
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• First of Aries’ Chelates Manufacturing Unit overseasFirst of Aries’ Chelates Manufacturing Unit overseasFirst of Aries’ Chelates Manufacturing Unit overseasFirst of Aries’ Chelates Manufacturing Unit overseas
• Rationale :Rationale :Rationale :Rationale :• Duty saving on imports of Micronutrient fertilizer end product, instead of raw materials which are organic chemicals or minerals• Capturing overseas markets in the Middle East and in the SAARC Region as a cost effective source of Chelated Micronutrients• Serve as a supplier of ‘Technicals’ for flagship brands to Aries’ Indian manufacturing units
Amarak Chemicals FZC, Fujairah
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• Largest overseas investment of AriesLargest overseas investment of AriesLargest overseas investment of AriesLargest overseas investment of Aries• Expected Commercial Production : Q4 of 2009Expected Commercial Production : Q4 of 2009Expected Commercial Production : Q4 of 2009Expected Commercial Production : Q4 of 2009----10101010
Rationale :Rationale :Rationale :Rationale :• Proximity to UAE’s oil refineries for Sulphur by products which are the main raw materials• Proximity to Asian markets, especially India and China, which currently have the largest deficit of Sulphur based secondary crop nutrients• Captive market within Aries Agro’s wide distribution network
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Amarak Chemicals FZC, Fujairah
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Growing Demand for Sulphur in Agriculture
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Markets for Amarak : Sulphur Deficit Regions of the World
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Amarak Chemicals : Competition
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Assuming an average of 2 belts per production unit, 14 manufacturers globally would be producing Assuming an average of 2 belts per production unit, 14 manufacturers globally would be producing Assuming an average of 2 belts per production unit, 14 manufacturers globally would be producing Assuming an average of 2 belts per production unit, 14 manufacturers globally would be producing 8,40,000 MT per year8,40,000 MT per year8,40,000 MT per year8,40,000 MT per year
AriesAriesAriesAries GroupGroupGroupGroup22.122.122.122.1 14.914.914.914.9 40.140.140.140.1 30.530.530.530.5 51.651.651.651.6 39.639.639.639.6Rupees in CroresRupees in CroresRupees in CroresRupees in Crores
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12121212
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Competitive Strengths
� Widest range of specialty plant nutrition solutions available to the Indian farmer
� Customized variants based on ongoing research of soil, crop and geography specific nutrientneeds
� Highly skilled sales team geared up to promote concepts and branded agricultural inputs
� Unmatched distribution reach, with a proven capability to place a new product on 69000 retailshelves within 1 day of launch
� Synonymous with product category in agriculturally progressive states
� Brands built without high decibel advertising campaigns, using extension services and fielddemonstrations
� Knowledge, consistency and simplicity
� Nil sales of unbranded products since inception
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Consumer Connect
� Increasing awareness is key to increasing mindshare and market shareIncreasing awareness is key to increasing mindshare and market shareIncreasing awareness is key to increasing mindshare and market shareIncreasing awareness is key to increasing mindshare and market share
� Unique Young Farmers Network engaging 6100 farmers, all 25 to 40 years of age
� Partnership with the Confederation of Indian Industry’s Young Indians
� UniconnectUniconnectUniconnectUniconnect - Lab to land awareness programmes with 100+ Agricultural Universities and Research Stations
� Bal Krishak Sambodhan Bal Krishak Sambodhan Bal Krishak Sambodhan Bal Krishak Sambodhan ---- Exposure to young students in rural schools on best practices in crop management
� Suryodaya Suryodaya Suryodaya Suryodaya ---- Continuous schedule of farmer study tours, farmer meetings, demos and field trials
� Train the trainersTrain the trainersTrain the trainersTrain the trainers sessions with Government extension officers
� Regular Rural Immersion programmes
� Mobile Soil Testing and issue of Soil health cards
� SMS based weather advisories, commodity prices, farmer query resolution
� MCX-Aries Agro Gramin Suvidha Kendra – Pilot with India Post offices in 768 villages across 5 states as booking agents and information channels; scale up opportunity immense
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A Fleet of 100 Krishi Vigyan Vahans
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Aries KVV Objectives
� Build awareness in remote, unserviced markets
� Conduct farmer meetings and audio visual shows on product applications
� Visit six villages every day on a pre determined route
� Book orders from farmers and collect token advances to confirm order bookings
� Work with local distributor to liquidate stocks based on orders booked
� Provide door step farmer advisory services, soil testing and query resolution
� Incentivize farmers by providing special schemes on booking through the KVVs
� Tracking of impact of extension work – farmers contacted v/s booked orders v/s actual sales
� Advances will ensure dealers cannot push other competing brands at point of sale
� Advances collected accrue to the company with credit given to respective distributors after the sale is completed
KVV Operations – Progress so far
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StateStateStateState # of KVVs# of KVVs# of KVVs# of KVVs Launch Launch Launch Launch datedatedatedate
No of kms No of kms No of kms No of kms coveredcoveredcoveredcovered
No of No of No of No of villages in villages in villages in villages in
routesroutesroutesroutes
Avg Avg Avg Avg distance distance distance distance per dayper dayper dayper day
AP 17 13 July 1,61,007 700 77 km 124TN 11 13 July 1,13,346 450 73 km 91Rajasthan 10 1 Sept 73,200 300 100 km 13Punjab & Haryana
15 31 July 78,200 610 74 km 40
West UP 5 27 July 44,480 280 71 km 15Bihar 10 30 July 75,230 340 77 km 29Gujarat 3 30 Oct 7,455 54 70 km NANipani 4 16 July 36,972 280 63 km 11W.Bengal 12 13 Nov NA NA NA NATOTALTOTALTOTALTOTAL 87878787 5,89,8905,89,8905,89,8905,89,890 3,0143,0143,0143,014 323323323323
As on 20 Nov 2009As on 20 Nov 2009As on 20 Nov 2009As on 20 Nov 2009
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15151515
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Environment Sensitivity
� All Aries products are based on the philosophy of “Use less chemicals and use safe chemicals” –low doses of chemically inert and cost effective nutrient complexes
� The entire range of Aries Chelates are environmentally safe
� Starting April 2008, Aries has launched water soluble sachets for its flagship brands, reducing the use of plastics and aluminum foil in packaging
� The company promotes “Balanced Nutrition as a National Imperative”, building resistance of crops to pests and diseases and hence lowering the usage of harmful and expensive pesticides
� All Aries factories have zero effluents and produce no harmful emissions
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Global Reach
� Investment in Golden Harvest Middle East FZC, Sharjah – now an Aries subsidiary – firstInternational Chelated micronutrients manufacturing base for Aries in the Middle East
� Chelates manufacturing in Golden Harvest, UAE provides input cost savings for Aries’ Indianoperations due to concessional duties on imports of finished products versus raw materials
� Investments in manufacturing facilities of Amarak Chemicals FZC for Sulphur Bentonite
� Current international customers are global arms of Indian customers (tea, coffee plantations)
� Distributors appointed in the UAE, EU, Nepal & Bangladesh for accessing new markets
� Manufacture world class nutrition solutions in the Middle East with indigenous, cost effectivetechnologies to tap into the highly specialized farming requirements in water scarcity andtechnology intensive areas
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Main Achievements - 1
� First company to market Agricultural Chelates in India
� First company to receive license to manufacture broad spectrum Antibiotics for crops
� Recipient of the Trans World Gold Medal by the International Labor Organization for model labour relations in India
� Not a single man hour lost since 1969 due to labour disputes
� Responsible for the establishment of Indian Micro-Fertilizer Manufacturers Association
� Recipient of the National Unity Award by the Government of India
� Recipient of the Distinguished Leadership Award by American Biographical Institute
� Listed amongst the Top 100 Best Employers of India
� ISO 9000 Quality Management system
� Launched a new product across 22 Indian states on a single day - 15 August 2006
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Main Achievements - 2
� Setup of completely automated manufacturing facilities at Bangalore & Hyderabad, using 100% Indigenous technology and components
� Successfully launching and running India’s only customer loyalty programme in Agribusiness
� Establishing a unique National Young Indian Farmer Network, along with the Confederation of Indian Industry
� First Plant Nutrition company in India to successfully go public and list on the premier stock exchanges of India, the BSE & NSE
� Strong global partnerships with companies in South America, China, the Middle East and Europe
� First Indian specialty plant nutrient manufacturer to set up an International manufacturing base in the UAE
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Global Recognition
� Winner : CNBC Emerging India Award 2008Winner : CNBC Emerging India Award 2008Winner : CNBC Emerging India Award 2008Winner : CNBC Emerging India Award 2008– FMCG, Food & Agribusiness sector
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Stakeholder Value Creation
� Value for CustomersValue for CustomersValue for CustomersValue for Customers
� Value for EmployeesValue for EmployeesValue for EmployeesValue for Employees
� Performance based variable pay across all levels and in all departments
� Informal, disciplined, open work environment
� Focussed and structured training and development initiatives
� Cordial employee relations, with not a single man hour lost since 1969 due to labour unrests
� Highly experienced mentors, with more than 120 staff having been with Aries for more than 20 years each
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Stakeholder Value Creation
� Value for SocietyValue for SocietyValue for SocietyValue for Society
� Research and continuous knowledge creation in over 100 Agricultural Universities and Research institutions across India
� Lab to land programmes across 97000 villages in 22 states, including ‘train the trainers’ programmes
� Sessions in Rural Schools to expose students to the ‘balanced crop nutrition’ concept during science classes
� Advocating the use of environmentally safe technologies for crop nutrition, reducing the use of harmful chemical fertilizers
� Focussed extension efforts to increase awareness levels in farming communities, using knowledge as a catalyst to raise agricultural productivity and consequently improve the economics of farming
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Competition | Challenges for new entrants
� Brand portfolio of 65 products, with 107 customized formulations
� Need to understand farmers at root levels, which requires not only capital investment but also lotof time and effort
� Business requires selling concepts and not just pushing products
� Not a commoditised price-point selling product
� Knowledge based service industry, which requires understanding problems of farmers andproviding them with solutions
� Huge crop diversity, which requires large variety of product range
� Given the size of our country, huge amount of time and effort is required to establish the requiredsales and support infrastructure
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Board of Directors
Name of the DirectorName of the DirectorName of the DirectorName of the Director DesignationDesignationDesignationDesignation
Dr. Jimmy Mirchandani Chairman and Managing Director
Dr. Rahul Mirchandani Executive Director
Mr Akshay Mirchandani Non-Executive Director
Dr. D.S. Jadhav Independent Director
Prof. R.S.S. Mani Independent Director
Mr Chakradhar Chhaya Independent Director
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Key Takeaways
� Vast experience of the Promoter Group
� Highly qualified and experienced management team
� Locational advantage of manufacturing units, branches and distribution network
� Unmatched distribution reach, including a fleet of 100 Rural Retail Vehicles
� International manufacturing base and global marketing partnerships
� In house research and development
� ISO certified Quality Management System
� Widest range of specialty plant nutrition solutions
� High brand recognition and brand strength in rural communities
� Capability to handle multiple customized formulations and varied SKUs to serve varied needs oflarge as well as small and marginal farmers
� Leadership position within a high growth, profitable, niche sector of agribusiness in India