Jisl spearheaded its biotechnology initiatives in 1993-94, with a capacity to tissue culture 50,000 banana plantlets. This initiative was met with overwhelming response from the farming community. The company, with its continuous innovations and research, has augmented its capacity to a whopping 50 million tissue plantlets per annum and meeting the needs of farmers in all major banana producing states including Maharashtra, Gujarat, Karnataka, Andhra Pradesh and Tamil Nadu. Apart from its dedicated R&D facility, the company has established primary and secondary hardening facilities for these banana plantlets as also virology labs for pre- and post-production quality control.
It is JISL’s tissue culture technique, coupled with its drip irrigation systems,
that has revolutionalised the entire jalgaon region of Maharashtra. The arid region has been transformed into the largest banana producing belt in Maharashtra, which also happens to be the number one producer of banana in the country, jalgaon today meets almost 19 per cent of the country’s banana requirement, engaging around 30,000 farmers
over an area of 45,000 hectares. The average banana yield in the region is currently 45 tonnes per hectare as against the average national yield of 28 tonnes. There are select farmers who are even enjoying a yield of 100 tonnes.
The company has successfully introduced high-yielding global variety – Grand Nain in India, which is primarily
known for its traditional varieties. This globally-accepted w variety is also better stress-tol- | erant and possesses improved shelf life as compared to traditional Indian varieties.
The favourable acceptance of such a new variety through tissue culture has enabled farmers to cultivate one crop in 12 months, as against earlier 18 months. Since the plants now possess uniformity in age and size as also genetic purity/disease-free features on account of tissue culture, the harvesting percentage has gone up as high as 95 per cent, as compared to 60 per cent in case of traditional cultivation. The average bunch weight has also improved to 25 kg from 15 kg. In fact, at a cost of production of ?1 lakh per acre, the farmers are reaping a total production worth T2.50-3 lakh.
cent in PE piping. Having an annual capacity of 300,000 tonnes, JISL manufactures a wide range of pipes (3 mm to 1,600 mm diametres) and requisite fittings, catering not only to the irrigation and water requirements of farmers and rural population, but also the needs of the urban and industrial infrastructure sector. Besides, the company also makes PVC sheets (total installed capacity:
- tonnes: revenue: ?250 crore), which are used in rural as also urban infrastructure developments.
Apart from selling these products through retail channels, the company also supplies directly to civic bodies and contracting/infrastructure companies like L&T, ivrc, igl, bsnl, Reliance Jio and others. Moreover, its piping division also undertakes turnkey projects such as water supply and plumbing systems, industrial fluid conveying systems, sewerage lines, gas distribution systems, etc. In fact, JISL commands about a 50 per cent share in gas distribution business due to its ability to deliver large volumes
for complex government projects.
On the micro-irrigation system side as well, the company, with an installed capacity of 270,000 tonnes per annum of tubing and moulded components, is taking turnkey projects for individual farmers as also institutions and government agencies, besides retail sales. It has already implemented large scale micro-irrigation projects in Karnataka, Himachal Pradesh, Rajasthan and Maharashtra. One such project includes the Karnataka government awarding a ?385 crore contract to the company to implement a micro-irrigation project where a 30,381 acre command area, comprising 7,000 farmers in 35 villages of Bagalkot district, will be covered under micro irrigation. Some of these states are also contemplating of making micro irrigation mandatory for certain crops.
In order to enhance its reach into the farming community, the company has also tried to diversify into products like solar pumps, solar
water heaters and solar photo voltaic appliances. Having started with solar pumps in 1999, the company has expanded its solar products basket in the last few years, with revenues of about ?105 crore.
Another promising area has beer, banana tissue culture, which it set up in Jalgaon. JISL is the largest player in this space, with production anc sales of about 55 million plantlets which it sells for ?13 each, a price it has not raised in the last decade The company has played a pioneering effort in banana cultivation In introducing a high-yielding variety, Grand Nain, which has played a major role in improving the productivity and income of Indian farmers The company has been instrumen tal in introducing several moderi and innovative practices in the agri culture sector. It also provides a wid range of extension and advisory sei vices to farmers through its stron pool of 1,000-odd agriculture sciei tists, technician and engineers. I fact, JISL has one of the largest sue pools of committed manpower
the private sector.
“JISL has been working closely with farmers in providing sustainable solutions across the agriculture value chain. It has been involved in several pioneering works that have helped the farm sector immensely, In fact, it has emerged as an extremely value entity,” says Sanjeev Asthana, founder & managing partner, I-Farm Venture Advisors, which is a principal investment firm, specialised in investments in food and agriculture businesses in rural markets.
“JISL has played a big role in promoting micro irrigation not only in India but also the entire world which is facing tremendous stress on the irrigation front. The company has been quite innovative in its approach and has helped in introduction of many new concepts and techniques in the farm sector,” states U.K. Behera, principal scientist, Indian Agriculture Research Institute, Pusa, New Delhi.
“All these years, we have tried to ensure that our activities revolve around farm and farmers. We are an integrated agriculture solution provider which aims to serve the farming community in the best possible way. While we provide them with our products and solutions, we partner with them throughout their progression journey,” says Bhavarlal Hiralal Jain, 78, founder chairman, JISL. Affectionately called Bhau by everyone (meaning elder brother in Marathi), Bhavarlal, a septuagenarian, who has left five heart attacks, two bypass operations and an angioplasty behind him and has a pace- maker-cum-defibrillator fitted to keep him going, has come a long way since he started his entrepreneurial journey way back in 1963, selling kerosene from a pushcart in Wakod village near Jalgaon in Maharashtra.
Though the day-to-day operations of the company are currently looked after by his four sons – Ashok, Anil, Ajit and Atul – B.H. Jain continues to oversee the businesses and drive overall policy. It was his efforts and passion for agriculture that pioneered the concept of drip irrigation in the Indian agriculture sector and built a conglomerate around farm and farmers, supplying irrigation solutions
Ajit: responsible for the pipe division and other products to more than 110 countries in the world. The systems that he pioneered are now being used in several water-stressed regions and have won him global acclaims and innumerable awards. His farmers have been to Harvard Business School to present their story. In 2011, the World Economic Forum selected JISL as one of the 15 Sustainability Champions, an assessment based on growth outlook, strength of fundamentals and adaptability to cater to explosive global growth.
“Even though our father currently tries to spend more time in philanthropic activities, he continues to be a driving force for all of us. As a visionary, he always provides us with his crucial inputs and is actively involved in all major initiatives taken by the company,” says Ashok Jain, 52, vice-chairman, JISL. The eldest among the brothers, he is a commerce graduate and currently looks after the food processing division and green energy products division. He is also in charge of group’s overall administration.
Ajit Jain, 49, an engineering (mechanical) graduate, is joint managing director, responsible for the pipe division, as also marketing of all plastics products, including
drip irrigation systems, guidance for extension services and development of new applications and products. Youngest brother Atul Jain, 46, a commerce graduate, is joint managing director and chief marketing officer. He joined the management team in 1992 and is responsible for overall marketing management as also has been involved in development of new applications and products in overseas markets for the food and plastic sheet division.
Anil is a commerce and law graduate and has played a crucial role in company’s journey – both in domestic and international markets. He handles the company’s strategic functions, such as finance and banking, strategic planning, expansion including M&As and collaborations. He is the one who initiated and enabled company’s global expansion by acquiring companies overseas. He participated at the 2012 G8 Summit Symposium, which was addressed by US president Barak Obama and Hillary Clinton.
After acquiring Chapin Water- matic Pioneer of Drip Irrigation Systems concept in the US in May 2006, JISL acquired a majority stake in the US-based Cascade Specialties also in December 2006. Cascade specialises in natural low-bacteria onion products and organic dehydrated onion.
With this acquisition, Jain Irrigation became the third-largest dehydrated onion producer in the world. This was followed by acquisition of US- based Aquarius Brands for $21.5 million in an all-cash deal in February 2007. With this deal, JISL became the second-largest drip irrigation company in the world.
The same year in June, the company acquired a 50 per cent share capital in NaanDan Irrigation Systems C.S. Ltd, Israel in an all cash deal for $21.5 million. In May 2012, NaanDan became the fully-owned subsidiary of JISL, with the company acquiring the remaining stake from Kibbutz Na’an, Israel, for an estimated $35 million. NaanDan, a pioneer in the development of drip irrigation and sprinkler systems in the world, develops, manufactures and markets advanced irrigation technologies, covering an extensive range of applications in open fields, orchards and plantations, greenhouses and nurseries, residential and landscape areas and industry.
In the same space, the company in March 2008 bought a majority stake in Thomas Machines SA of Switzerland, which is a manufacturer of specialist machines and equipment including latest generation high technology drip irrigation lines, quality control and test equipment, automation
equipment, laser machine centres and laser products. The equipment manufactured by the Swiss company have enabled JISL to achieve significant improvement in production speed and meet the growing demand for its high quality precision irrigation products. By acquiring controlling stake in Sleaford Quality Foods Ltd, a UK-based industrial food ingredients supplier in 2010, JISL got a direct access to a large market with value- added products. “As a company we have always looked for opportunities that can add to our value chain. This along with our own R&D has helped us make available new techniques and practices to our farming community, which has often faced with multiple challenges. We will continue our endeavour going ahead as well,” says Ajit.
The company has also been involved in collaborative efforts with several Indian and global universities and institutions. It is looking to broaden its basket of crops for MIS systems. At present catering primarily to vegetables/fruits and cash crop like cotton, banana, pulses and oil seeds, JISL is now looking at several other major crops. Collaborative efforts are on with International Rice Research Institute, Manila, for introduction of drip fertigation (a term used for
applying fertilisers and nutrient! through drip irrigation) for growing rice. JISL and International Water Management Institute, Colombc are collaborating on research intc basic water management in rice and other crops. A five-year-long research collaboration with the University of Nebraska, US, is also underway Under this umbrella, JISL is trying to explore water use by banana and cotton, as also biotech studies in pigeon pea and banana. “At JISL, we believe in sharing of expertise and knowledge. We are working with mand specialised institutions and agencies in developing new products anc applications which have the potential to revolutionalise the farm sector,” states Atul.
The company has spent about ?500 crore in organic expansions in the last few years, carrying out capex to expand its existing capacity acrosi its various verticals. In the last three years, the company has implemented a capex aggregating about ?450 crore Going forward, the company has for-] mulated a strategy, where it would like to consolidate its existing businesses, even as it would continue to work towards bringing down its debt. “However, our main goal is to leverage our existing strengths to expand our business in the long term. We intend to be the best water, food and natural resource management companies in the world, while creating value across the agriculture value chain,” points out Anil, who believes that the company has recovered quite well and is all set to grow at a CAGR of about 20 per cent through the next five years.
Through a bit of determination, the company has cut down the debt. The company is also increasing its focus on the export market. The exports of ?1,000 crore and overseas operations of ?1,800 crore together contribute about 46 per cent to its turnover. This kind of mix has helped the company in tiding over adverse currency movements.
As a part of its business, the company is working with local communities to execute turnkey projects where it is also involved in activities such as transportation of water, creation of new reservoirs and canal command area projects. JISL has recently built a check dam in Jalgaon. This ?10-crore project has completely changed the lives of 3,500 farmers in 10 villages. Due to the dam, water table in the area has improved considerably, even as several water resources have become alive. The farmers who could only cultivate only one crop, are cultivating two crops and some are even three crops now.
The company is also planning to expand its reach in the market by expanding its dealer network further as also introducing variants of products. It is also in the process of leveraging its strong brand image, wherein it is planning to get into retail sales in case of the agri-pro- cessing business as well. So far, it is selling its products to institutions only. JISL is selling its products in the market under brands Jain Drip, Jain Sprinklers, Jain Pipes, Chaplin and Farm Fresh, competing with players like Netafim, EPC Industries, Plastro Irrigation (Israel) and Eurodrip (Greece) in case of MIS systems; In PVC/PE pipes, its main competitors are Finolex Industries, Supreme Industries, Duraline, Pennwalt and Agru Plastics. There are also a host of players in different areas of agriprocessing, including Foods & Inns,
National Dairy Development Board, Godrej Industries, as also Con Agra Food, USA.
The markets for all these businesses present huge potential. In order to face the vagaries of nature effectively and conserve water resources well, the government is putting all possible efforts including subsides to encourage micro irrigation in the country, where MIS penetration, at about 5 per cent of the arable area, is abysmally low. Besides, despite being a major agriculture economy, India manages to process only about 5 per cent of it agro output, as against 40-50 per cent in developed economies. “All this clearly shows the massive potential existing in these markets. JISL, being an established player, is well geared up to explore these opportunities,” says Asthana of I-Farm.
“The market for MIS systems is currently quite small in India. However, as the water availability is under stress, concerted efforts are being made by all stakeholders to introduce new methods and means to optimise the existing resources,” says Mayur Bumb, CFO, EPC Industries, which is one of the pioneering companies in India in the micro-irrigation space. A listed entity, EPC has been operating in this field for over
three decades and was taken over by Mahindra & Mahindra in 2011.
JISL is now well poised to sustain its growth, going forward. The company has tweaked its business model and is now structured for sustainability in the long run. Over the years, the company has evolved as a complete agri-solution provider with a presence across the agriculture value chain. The company has created a strong production base in diverse geographies which, along with diversified portfolio of products, has provided it a distinct edge over its competitors. The market is also on an expansion mode. The company would now like to leverage its strengths to grow. However, as in the other cases, here too, execution at the ground level is going to be the key. Fortunately, this has always been the strength of the whole company. “We are very confident of our future as all our product lines are essential for sustainability of human kind and the earth we inhabit. We are constantly transforming ourselves in line with emerging realities with the objective to strengthen our long-term competitiveness to build a financially strong organisation for the benefit of all our stakeholders,” says B.H. Jain.
♦ ARBIND GUPTA [email protected]