Table
of Contents
From
the Chairman
Gearing Up for Growth...
50 Years... and a New Office
Our People... Our Future
A Growing Portfolio
New Products
Working with Our Customers... Our Farmers
Safety... and Preserving Our Environment
Partnering for Success
In Service of Our Community
Creating Shareholder Value... A Decade of Progress
Also available: Financial
Summary for the Last Ten Years
(You will need Acrobat
Reader to download and view this document.)
From
the Chairman
The year gone by has
been an eventful one, in which we began the process of integrating our
agriculture businesses in India, in line with the consolidation that is
happening world-wide. This consolidation is designed to enhance significantly
our ability to compete and grow in an evolving market.
Our Board of Directors
and shareholders have approved a proposal to integrate our agriculture
businesses in India into our listed company. This is symbolic of Monsanto’s
commitment to India and to our shareholders. It is a public declaration of our
intent to partner more closely with Indian farmers through comprehensive
initiatives that will position us as a key provider of inputs that satisfy
their needs.
Rural India is going
through a process of rapid change. What seemed distant and even improbable
some years ago is now a reality. Independent media reports speak of farmers
being ready to embrace new products and technology, even information
technology. In January this year, computers were installed in 21 soochnalayas
(information centres) in one district of Madhya Pradesh. This made it possible
for farmers to check, with the help of soochak (information attendant) prices
for produce in other mandis (markets), saving them unnecessary, time-consuming
trips to the local mandi. Soon, they discovered that for a small fee, they
could send SOS messages about a broken pump or tractor, or even a cow’s
broken leg. These progressive developments are slowly being replicated in
other parts of India.
Today, India is among
the world’s foremost producers of a number of agricultural products. As the
country gears up to meet the challenges of a global marketplace under WTO
guidelines, farmers are aware that to remain competitive, they have to
increase productivity, both in volume and value terms. We are well positioned
to help in that process. We have teams travelling through remote villages,
testing the soil, studying cultivation practices in different agro-climatic
conditions, training local coordinators and offering farmers a helping hand
through knowledge, empathy and understanding. These dedicated teams are
supported by a growing portfolio of products and technologies covering
agro-chemicals, seeds and seed enhancements that are available to us from our
global company and through our partners in India.
Clearly, the future
holds promise. We believe we have the products and the technology farmers
want, the people with the knowledge and skills to deliver them, the
distribution network and the business partners to provide the reach in the
most cost-effective way possible. We now have the corporate structure to
leverage our synergies and live up to the confidence our shareholders have
placed in us. I look forward to the years ahead.
Terry Bunn
Gearing
Up for Growth...
Monsanto crossed two
milestones in India during the year under review. We established the framework
for becoming a comprehensive provider of agricultural inputs, by integrating
and consolidating our agricultural businesses in the country, and we completed
50 years of our presence in India. These developments were fittingly reflected
in our moving to a new office in Mumbai that symbolises our spirit of growth
and our commitment to India.
As we close the year, we
are in the process of consolidating our various agricultural businesses in
India, a step that is consistent with our global consolidation and our local
commitment. During the year, Monsanto worked globally towards integrating its
chemicals and seed businesses. In India, we took this step forward by
integrating our seed and herbicide activities through our ‘Ag Going
Forward’ initiative.
We have now completed
this process by integrating and consolidating our businesses in India in our
listed company. We have acquired the entire shareholding of Monsanto
Technologies India Ltd. (MTIL) and the agriculture-related businesses and
assets residing in Monsanto Enterprises Limited and Monsanto India Limited. In
consideration for the acquisitions, our Board of Directors and the
shareholders have approved, in accordance with SEBI guidelines, an issue of
equity shares on a preferential basis to Monsanto. This has resulted in an
increase of Monsanto Company’s holding in our Company from 40 per cent to
about 72 per cent, a reaffirmation of Monsanto’s commitment to India and our
Indian shareholders.
The recent merger of
Monsanto Company with Pharmacia & Upjohn has resulted in the creation of a
larger company dealing in agriculture, pharmaceuticals and nutrition. This new
company has now been named Pharmacia Corporation. The agriculture business,
which will be created as a subsidiary of Pharmacia Corporation, will operate
under the name of Monsanto Company. It is one of the world’s leading
agricultural companies with 12,000 employees. Monsanto Company is known for
bringing innovation to farmers that has improved their efficiency and helped
them better protect the environment. The cornerstone of its success is a
cost-effective and integrated approach towards crop protection, seed
capabilities and technology capabilities.
The steps we have taken
to consolidate our businesses in India are also in consonance with our market
needs. They will help us retain our leadership position and increase
shareholder value by enabling us to respond with a more comprehensive solution
to the needs of our farmers. This exercise, when completed over the next few
months, will better position the Company to leverage its portfolio and its
higher net worth for future growth.
Monsanto has always done
more than merely sell products - we work at changing mindsets, look for
creative and innovative solutions and to make breakthroughs. This
consolidation will sharpen our business focus and enable us to compete more
effectively in a rapidly changing and increasingly challenging environment. It
will capitalise on synergies, bring about economies of scale and provide
access to Monsanto’s leading edge technologies and global experience in the
agricultural sector, thus making us a comprehensive input provider that meets
farmers’ needs.
This integration will
also enhance our ability to move towards a portfolio-based market approach
along with our partners -- our distributors, our seed company partners and our
dealers. It will help us leverage our individual strengths to offer our
farmers a ‘Total Solutions’ approach in their efforts to enhance
productivity and yields.
As we continually look
for opportunities in other markets of South Asia for our products, this
consolidation will help us cater to the export markets in Sri Lanka and
Bangladesh. Our seeds subsidiary, MTIL, is also working closely with Monsanto
affiliates in South- East Asia to produce and export high quality seeds.
50
Years ... and a New Office
1999 it as opportunity
not just to tell our story to the world at large, but to recognise and honour
those who made it happen, present and past. We did this through a unique
‘print presentation’ strung together with a green cord to resemble the
stem of a plant. Between the pages were nuggets of information -- anecdotes,
vignettes, memories culled from interviews with the people who helped build
Monsanto India over the years, from Amritsar to Bangalore and Khopoli to
Guwahati.
We also moved to a new
corporate office, befitting our status as a rapidly growing organisation, at
Ahura Centre, Andheri (East), in Mumbai’s western suburbs. A fascinating
intermingling of East and West, the new office combines the efficiency of
Herman Miller workstations with the beauty of rich Indian textiles
appreciatively chosen from bazaars across the country, and sculptures and
inlay work by artisans from Mahabalipuram, Rajasthan and Agra which provide a
uniquely Indian touch.
Our
People... Our Future
Monsanto believes that
people are our most valuable resource. As we integrate our businesses in India
to create our growth vehicle, we will draw on the experience of our investment
in people over the last four years. During this time, Monsanto in India has
expanded from a strength of 100 employees to encompass over 400 ambassadors of
knowledge -- taking technology to customers and offering them a new vision of
farming, which combines a centuries- old feel for the land with new tools to
enhance its productivity in a sustainable manner.
Knowledge has been the
cornerstone in this process. Our Human Resources Team has created a close-knit
contingent of diverse professionals. This team is distinguished by its
marketing mindset; a focus on knowledge, change, performance and deliverables;
and a willingness to get a job done in an original and innovative way.
Intensive workshops have helped develop product knowledge and enhance selling
skills, while building leadership and business acumen to address customer
queries effectively. The emphasis is on translating product features into
benefits and linking our product’s advantages to a farmers’ needs. The
focus has shifted from driving volumes to adding value and we have learnt to
do more with less.
Our success in knitting
existing and new employees into a cohesive team with a uniform corporate
culture, and setting up systems and procedures to meet the challenges of a
rapidly transitioning organisation, was recognised during the year by the
Organisational Development (OD) Institute, USA. This independent non-profit
association presented our HR Team with the OD Award for Distinguished
Application, making us one of the four outstanding examples recognised
globally by the Institute in the field of organisational development. Our
consolidated businesses will accord the HR Team further opportunities to
continue this investment of building our knowledge ambassadors.
A
Growing Portfolio
Over the past 25 years,
Monsanto has been providing farmers with products that have contributed
substantially to agricultural productivity and effective weed controlpractice,
to boost yields in keeping with the principles of sustainable development.
Monsanto’s herbicide products today need no introduction to our farming
community.
- Machete® -
Our first herbicide that works like a magic wand across paddy fields.
Machete was introduced to Indian farmers in 1975 and has become a
significant weed control product for transplanted paddy. Machete was an
important contributor to the success of the Green Revolution in Punjab and
Haryana during the early 1980s.
- Lasso® - an
instant hit because of its wide and varied application in increasing
yields and reducing production costs in corn, soyabean and vegetable
crops.
- Leader® - a
new generation wheat herbicide that provides an effective solution to the
problems of the wheat farmers of North India.
- Avadex® - an
established niche product used for the control of ‘wild oat’ weed in
wheat.
- Roundup® - a
broad spectrum herbicide with an environment-friendly profile that has
liberated farmers from laborious hand weeding and at a lower cost. It is a
much sought after weed control solution not just for farmers, but wherever
there are huge open spaces with weed problems -- like airports and
industrial establishments.
- Asgrow® and
Dekalb® Seeds - these high quality hybrid maize and sunflower seeds
will form a growing segment of our business in the coming years. Hybrid
seed quality is an important aspect that builds farmer loyalty and product
volumes. Our investments in artificial dryers and high tech shellers helps
us maintain our international quality standards and has enabled us to
supply maize hybrids that have a high germination rate.
New
Products
Our long term growth and
success will depend on our ability to satisfy our customers’ needs with a
continuous stream of new products and technologies that are both cost
effective and environment friendly. Our R&D, Product Development and New
Product Registration teams work hand-in-hand to understand the farmer’s
needs and develop new products and unique formulations that can make
applications safer and easier. We have a robust pipeline of products that are
expected to be commercialised over the next five years. In seeds, we look
forward to introducing new corn and sunflower seeds. Our work in providing
value added biotech products through our own programmes and in collaboration
with our partners is ongoing. In herbicides, we look forward to introducing
new herbicides for rice and corn, and superior variants of our Roundup®
herbicide.
Working
with Our Customers...Our Farmers
A perception study by
ORG-MARG that was commissioned during the year showed that farmers, big and
small, want to increase yields with new products and technology that is
cheaper, saves time and results in good quality crops that are disease-free
and have fewer pest problems. Most showed a remarkably high awareness of new
technologies, including biotechnology, and cotton farmers expressed a
preference for higher-yielding, faster growing hybrid seeds as compared to
conventional seeds.
Farmers who earlier
produced the same crop year after year are now able to grow a variety of crops
in various seasons. With labour becoming scarce and not available when it is
needed, with increasing input costs and with markets increasingly demanding
output of a higher quality, farmers are looking for multiple solutions to
raise productivity, reduce costs and improve yields. Weeds, for instance, are
responsible for 30- 60% of the damage to our agriculture yields. But there is
very little awareness of this among Indian farmers, while those who are aware,
lack knowledge of the appropriate solutions. The penetration level of chemical
herbicides is also very low, ranging from 17% in rice to less than 1% in
maize. We, at Monsanto have identified this gap as a major business driver for
our growth.
Our field teams work
hand-in-hand with our farmers to provide the most compelling solutions to
several of his problems at one- to-one and group meetings and kisan melas,
through demonstration of our products and leveraging our strengths in
distribution. This, we believe is a critical component of our Market
Development work which we intend to resource aggressively in the short term
for our future growth.
Our goal in the long run
is to also develop a strong customer interface and become a catalyst for
change, meeting our farmers’ need for credit, marketing assistance or
information -- be it weather prospects, new technologies or price of his
produce.
Another of our farmer
initiatives is the ‘Small Holders’ project. Our teams are today living in
remote villages through the cropping season, from pre-planting to
post-harvesting, studying cultivation practices in different agro-climatic
conditions and providing small farmers with information at their door-steps.
They also offer inputs directly and through local village co-ordinators to
enable local communities to be self-sufficient in due course.
In some villages, these
teams did free soil sample testing and provided expert advice on fertilisers.
In others, they offered help on effective weed control, from pre-plant to
in-crop application, and in General Weed Control situations like bunds and
channels. In still others, they guided farmers on helping them store produce
better and get higher returns. In some villages, they guided farmers on
cost-effective and environment- friendly pesticide applications and on
Integrated Pest Management systems.
Safety...and
Preserving Our Environment
Our state-of-the-art
herbicide formulation factory at Silvassa in the Union Territory of Dadra
& Nagar Haveli is a zero-emission plant -- no liquid wastes whatsoever!
Even water from laboratories is treated and used for gardening. Solid wastes
will be disposed of in an incinerator from August and the ash used for
landfills. The plant has already achieved the ISO 9002 Standard last year, and
is now moving aggressively to get the ISO 14001 (environmental management
systems).
Safety is always top of
mind -- not just at the office or factory, but wherever Monsanto employees go!
Our motto is safety first, business later! Road safety is a major priority as
many of our people are on the road in difficult terrain much of the time. Last
year we carried out vehicle safety audits, insisting on front and rear safety
belts, fire extinguishers and first-aid kits in every vehicle. We have
organised refresher driving courses and conducted an audit of car hire
agencies to ensure our people travel in the safest vehicles, driven by the
most cautious drivers.
Monsanto’s seed
processing plant at Bellary has been operating with an impeccable safety
record -- no lost work days due to accidents since its inception. It has a
seed conditioning unit and facilities for pre-cleaning, grading, gravity
separation, sizing, treatment and packing, 4,500 square metres of godown space
and over 11,000 cubic metres of cold storage facilities for ensuring seed
quality for a longer term. The Bellary unit is also a leader in the Indian
seed industry in that it provided every factory employee (including contract
workers) with Minimum Personal Protection Equipment -- hard hats, gloves and
safety shoes. With safety in mind, we have reduced our seed bag sizes from 100
kg to a uniform 30 kg per bag -- easier and safer for loading and unloading.
Safety is the first item
in the Goal Document of each employee and in 1999-2000 Monsanto India scored a
very high rating on safety.
Other safety measures --
extra high boots and no-refrigeration anti- snake venom kits to protect field
workers from snake bites. Our field staff have launched ‘no smoking’
campaigns at mandis and pesticide stores to protect farmers and dealers and
also initiatives for the safe use of farm equipment such as threshers.
At Monsanto,
Environment, Safety and Health are knit into a seamless whole -- hence the gym
and meditation rooms at the head office in Mumbai, the warm-up exercises at
our factories to start the day and the frequent health check-ups for both
employees and contract labour at the Company’s plants.
Partnering
for Success
Monsanto has always
built partnerships with our distributors and dealers who provide effective
reach for our products and technologies in every part of the country where we
operate. A committed programme that keeps our trade partners motivated and
involved in our business has been one of the cornerstones of our success. For
the first time in the Indian agri-industry, we have launched a pilot programme
in Punjab/Haryana called ‘Golden Harvest’ which is a unique loyalty
programme for our trade partners.
In the last four years,
we have also fostered multiple strategic partnerships -- with seed growers to
provide India’s farmers with quality, high value sunflower and hybrid maize
seeds with a high germination rate and with pioneering companies like Mahyco,
EID Parry and Rallis to service Indian farmers more quickly and more
efficiently.
- Monsanto’s joint
venture in seeds with EID Parry is now making hybrid rice available to
farmers. Our partnership with EID Parry helps us reach many parts of the
country faster and also enables them access our Brands and portfolios,
thus providing mutual benefits.
- With Rallis India
Ltd., we are not only expanding physical reach for our seeds,
agro-chemicals and technologies, but also taking market development
initiatives through our ‘Small Holders’ project for small farmers.
Rallis today markets all of our Asgrow® corn and sunflower seeds. We
collaborate with them in special village adoption projects that help
educate and communicate the value of our technologies faster to small
farmers.
- With Mahyco,
Monsanto’s joint venture for Bollgard™ promises substantial benefits,
both to the Indian farmer and the Indian economy. Bollgard™ is the first
in a series of technologies relevant to India’s needs to be introduced
through the Mahyco partnership. It is a symbol of Kisan (farmer) and
Vigyan (science) combining forces to meet India’s needs for food and
fibre.
In
Service of Our Community
When seed farmers do
business with Monsanto, they do more than earn money through the seeds they
grow for the Company. They develop a relationship with the Monsanto family
that transforms the communities in which they live. More than a hundred
villages in Andhra Pradesh and Karnataka have discovered what this
relationship means -- 10,000 Monsanto Vidyarthis who get free books, school
bags and 450 merit scholarships (this covers school uniforms, fees and travel
money). Last year, 15 students received scholarships for professional courses
in agriculture and engineering. Our initiative helps more than put the
children through school and college -- it spreads consciousness about
education in remote villages, changing attitudes and speeding up the
development process in a ripple effect.
In Mukkamula village of
Guntur district of Andhra Pradesh, a small holder initiative quickly
translated into increased attendance at the local school! Community leaders
attributed it to children being freed from laborious hand weeding tasks, the
influence of village co-ordinators and pressure from farmers themselves, as
they became aware of the power of technology to transform their lives.
Community development is
a comprehensive effort -- health camps employing local doctors for free
check-ups; medicines; surgery for polio victims; equipment for local
hospitals; tree plantation and farmer meetings in co-ordination with the state
horticulture and agriculture departments; veterinary camps for animal health;
building of warehouses that double as community training centres and wedding
halls during the off-season -- all of these in an integrated approach.
Creating
Shareholder Value... A Decade of Progress
