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Agrochemical Business Plan

Executive Summary

 

Agrochemical is the essential input in agriculture. And the term includes a wide range of products such as fertilizer, pesticide, insecticide, herbicide, fungicide, hormones, growth agents and micronutrients. Here at Patilad Agro Chem Ltd., we intend to tap into the agrochemical manufacturing business.

 

Manufacturing of agrochemical products require a high level of knowledge, technical-know-how and experience in order to get the right result. Additionally, agrochemical manufacturing is highly profitable and lucrative opportunity.

 

Following the high demand for agricultural produce in the state and having considered the constraints and the factors limiting the maximum production of agricultural products in the country. We were able to spot a huge gap between supply and demand due to high rate of damage crops as a result of lack of pesticides and fertilizers used by the farmers. The owner of Patilad Agro Chem Ltd. saw this challenge as a great business opportunity to go into Agrochemicals production and sales.

 

Patilad Agro Chem Ltd. is an agrochemical production company specialized in the formulation and production of Pesticides and Fertilizers.

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Table of content

Page

Executive Summary4
Business Description7
Products and Services12
Market Analysis13
Competitor Analysis15

Sales and Marketing Plan19
Operational Plan25
Management Plan 27
Financial Plan and Projections30

INTRODUCTION                                                                                                                    

The Nigerian agrochemical sector is estimated to generate approximately $120 million (some N18 billion) yearly, this figure has attracted a large number of companies and investors both in Nigeria and abroad.

 

Nigerian companies consume in excess of $3.58 billion worth of chemicals per annum but produce just $380 million. The base chemical sectors, which consists mainly of petrochemicals, accounts for over 70 per cent of the total chemicals market in Nigeria. There is a large market for agro-chemicals in Nigeria. It is estimated that the private sector agrochemical companies supply about 70 per cent of the total Crop Protection Products (CPP) demand approximately $120 million this consists of 30 per cent herbicides, 40% insecticides, 15% fungicides, 8% growth regulators and seed treatment chemicals, and 7 per cent rodenticides, nematicides and others.

 

Over the years, there has been little growth in the size (in quantity terms) of the CPP market and this is due to the fact that the market and marketing of CPP in Nigeria are unorganised and not properly regulated.

 

Nevertheless, the agrochemicals market is considered to be one of the most important segments of agri-inputs, due to the expanding commercial cultivation of high value crops to meet the rising diversified food demand. Agrochemicals are consequently seen as those products, which improves the return on investment and also aid in meeting farmer’s as well as consumer demands, from the economical and health perspective with increasing per hectare production of quality agricultural products.

 

The adoption of new technologies that increases crop production through the optimal use of scarce resources such as land, water, and fertilizers is gaining attention in the field of agriculture. The high growth potential in emerging markets and untapped regions provides new growth opportunities for the market players. The growth of this market is driven by growing farmer’s attention towards superior quality agrochemicals, which should be balanced and nutritive.

 

Growing population and declining arable land to feed the resultant population are driving the overall agrochemicals market. Increasing pest concerns and emergence of a variety of agrochemicals are expected to drive the demand for agrochemicals in the near future. The agrochemicals market is also driven by factors such as rigorous research & sharing of intellectual property rights and shifting R&D investments. Expansion in crops such as oilseeds and sugarcane is mainly expected due to the widening applications such as food, feed, fuel, and other industrial uses, which in turn drive the agrochemicals market. Development of safe alternatives such as bio-farming and organic pesticides is restraining the growth of the agrochemicals market.

 

The global market for agrochemicals was valued at USD 207.5 billion in 2014. It is projected to reach USD 250.5 billion by 2020.

 

Market for agrochemicals is being driven by increasing awareness among the farmers across developing nations with the technology driven farm practices. The regional government supports to increase the agricultural crop output with minimized use of agrochemicals.

 

High-value crops such as cereals & grains and fruits & vegetables and protected cultivation of crops are driving the demand for the agrochemicals market. Increase in protected cultivation of crops has been attracting growers across the globe as it offers handful returns on investment. More number of growers has ventured into the greenhouse system of agriculture production industry, for higher rates of return for the product. The use of agrochemicals is highly seasonal and improved, protected crop production is driving the year-round demand for agrochemicals products, especially pesticides and- fertilizers.

 

Business Description

The company is a start-up that will be located in Akowonjo, Lagos State. The factory will be situated in an area with high population and nearness to the market.

 

The company is in the process of incorporating with Corporate Affairs Commission of Nigeria as Patilad Agro Chem Ltd.

 

The company main focus will be production and formulation of Agrochemicals.

 

The team has spent, in total, hundreds of man hours in the research and study of the business and the method of processing high quality agrochemical product that will bring high ROI.

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