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Delivery apps like Swiggy will boost food processing: Balram Singh Yadav
"Doubling farmers income in real terms is a difficult task but we may achieve it in nominal terms," says Balram Singh Yadav, managing director, Godrej Agrovet Ltd. In an interview with Swati Khandelwal, Yadav said, "Farmers income can be doubled only if agri GDP grows at 10.4% per annum, however, it grew by just 2% in the first quarter of this fiscal."

Had the government succeeded in bringing stability in farm incomes and relief to farmers?
The government has taken several steps to de-risk the agriculture sector. I have been working in this sector for the last 30 years and I don't think that any other sector is riskier than this. The sector is monsoon dependent and its cost of production is not linked with its output price. Both, the productivity and prices are too low, but the government has launched several schemes to help the sector. However, we have seen that the implementation of things at ground level takes several years. The government efforts give me hope that things will be achieved.

How do you see the increasing competition from platforms like Swiggy and Uber Eats?
Food delivery systems will require suppliers and you would have heard about cloud kitchens and others. Our country is not a place where you can distribute your products in the entire city just by centralising your work because of poor infrastructure, more population and traffic. Thus, there is a need for hub & spoke arrangement distribution and under such an arrangement you will have to process – to make your products available in a semi-cooked and fully-cooked situation – so that it can be sold at the cloud-kitchen after heating it or last-mile processing for value addition. Thus, these mobile platforms for food delivery will give a major boost to food processing and will shift our focus towards to semi-cooked and frozen foods, which need to be cooked and delivered at an ease at the end. This will benefit processing and lead to the development of cold-chains.

Do you think that your margins will improve a bit in the second half?
Margins of the animal protein business have always remained good in the second half and it will happen this year too. Two of our businesses, crop protection and oil pump plantation, are seasonal businesses. The two-third business of these two segments happens in the first half of the year, while the remaining one-third in the second half. In fact, the two-third business of animal protein segment happens in the second half and it will remain dominant at our end and will help us in improving the margins, which, in turn, will have an impact on the company's performance.

Update us on Godrej Agrovet roadmap for the next 5-10 years?
If you look at our past records of 8-10 years, then you will find an improvement of 15-17% in the bottomline and topline. Organic growth of around 9-10% can be achieved in this business and that is why inorganic growth is an important strategy for us. Increasing sophistication and technology in the country will lead to the consolidation of several assets and that's why I feel we will be able to maintain the topline and bottomline growth at 15-17% levels. Things also depend upon the macro-environment and we will not face any difficulties in posting this growth rate for the next 5-6 years if everything remains above the average.

Zee Media Newsroom