Q2 to be better; new tie-up to boost revenue: Dhanuka

Uneven rainfall across the country has impacted sales of the producers, MK Dhanuka, Managing Director (MD) of Dhanuka Agritech told CNBC-TV18. Dhanuka expects sales and margins to improve in the second quarter. The company will be launching another new product, a fungicide, this year, he says. Previously, Dhanuka had launched Konica in January 2015.The company has tied up with a Japanese company, Otsuka for launching a new chemical - mitiside - in 2016. Dhanuka says initially the product will be a moderate revenue driver as it will take atleast two years to establish the new product in the market.Dhanuka Agritech already has technical tie-ups with 4 American companies and 4 Japanese companies. Dhanuka expects the rural economy to perform reasonably well despite the deficient monsoon and drop in food production. Below is the transcript of MK Dhanuka’s interview with Latha Venkatesh & Nigel D’Souza on CNBC-TV18.Latha: We were told by the people in the industry that despite a questionable monsoon your market share if anything has been maintained and improved upon can you tell us what kind of sales you could notch up in the first half of the year when the monsoon have been subpar?A: As per India Meteorological Department (IMD) there is deficit of 12 percent in the average monsoon but the distribution was not proper throughout India. Still if we consider, then Karnataka, Andhra Pradesh, Maharashtra, Uttar Pradesh, Bihar the deficit is to the extent of 30 percent. This is the reason that the industry couldn’t do, although we are able to maintain our market share. However, the growth which was planned that could not be achieved by most of the industry peers.Nigel: Any new tie-ups that are likely to come up? I believe that you have tie-ups with six Japanese companies innovators apart from four in the United States. Can we look forward to something new coming on that front?A: We have tied-up with the fifth Japanese company Otsuka Chemical and we hope to launch their product in to 2016. It is a miticides. In 2016, we hope that we will get the registration and we will launch the molecule of the fifth Japanese Company Otsuka Chemical.Nigel: What kind of revenues could this launch bring? Is it going to be substantial or is it going to be a small blip of your total revenues? A: When you launch a new molecule it takes two years time to establish the molecule at grassroots level because no farmer or dealer knows about the molecule. So, initially two years you have to give them training, you have to show demonstrations to the farmers and the benefits which they can derive from the product. It will be a moderate revenue driver for the company.