India Maize Summit 2015 Riding the Demand Wave and Outlook

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Index

About Pioneer

Maize as crop in Macroeconomic scenario

Likely Demand and supply projections- 2050

Current challenges faced

Current issues to be addressed towards supporting the demand projections

About DuPont Pioneer

Founded in 1926

– largest U.S. producer of hybrid seeds and operates in nearly 70 countries

– Global Revenue - $7.3 billion (2012)

– The Fastest growing Seed Company in India with turnover more than 800 crores.

– Employees 13,500 worldwide

– Major Crops : Corn, Rice, Millet, Mustard and Sunflower

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DuPont Pioneer Vision To be the world’s most innovative plant genetics business, delivering industry-leading products and unmatched service and support.

• DuPont Pioneer network in India • Around 500 employees in more than 40

locations • Corporate Office – Hyderabad • Seed Processing Plant – Medchal, Hyderabad • Multi Crop Research Center – Warangal,

Hyderabad • 5 Zonal & 26 Regional offices • 15 Production locations - More than 45000

acres employing more than 22000 people

WHO WE ARE

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Bringing crop genetics, advanced seed technology and traditional farming practices together uniquely

Committed to our

CORE VALUES

More than

Researchers

Guided by our

Philosophy

2009 A&N R&D investment ~$750M

100+ Research sites in 24 countries on 6 continents

3,000

Respect for People

Highest Ethical Behavior

Environmental Stewardship

Safety and Health

Giving helpful management suggestions to our customers to assist them in making the greatest possible profit from our products

Advertising and selling our products vigorously, but without misrepresentation

Dealing honestly and fairly with our employees, customers, seed growers, sales force, business associates and shareholders

Striving to produce the best products on the market

LONG LOOK

SIGNIFICANCE OF THE INDUSTRY

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Maize in Macroeconomic Scenario

All-India annual growth rates of area, production and yield of major crops During 10th Plan (2002-03 to 2006-07) During 11 Plan (2007-08 to 2011-12)

Key Highlights : -

• Maize - 3rd most important cereal

• Acreages grown from 6.6 M Ha to 8.6 M ha (2002 – 2013)

• Peaked in 2013 at 9.4 M Ha

• Productivity increased gradually (1.6 to 2.6 Mt/Ha)

Maize - Only food crop for which area and production have consistently increased

Maize- New applications Driving Demand

Growth Drivers

Starch industry Food industry Paper Industry Textile industry Pharmaceutical

Industry Feed industry

Corn - New & emerging trends – Oil / Starch – New Application / Ethanol

Corn Usage in Many Industries – ON Growth Path

Growth driver - Food Industry , Paper, Textiles and Pharmaceuticals

Starch Industry

Glucose & Sorbitol Glucose Production form Corn on Positive Trend

Consistent Growth in Last 5 years. Current Starch Production-1.56 M MT

Projected Production– 3 M MT by 2020

Processed Food Market Size- 1.5 Billion USD

Projected Size- 7 Billion USD

Corn Starch/Corn Flour-Avidly used in Bakery, Beverages & confectionary

Food Industry Consistent Growth in the Processed Foods in the Last 5 years.

Paper Industry

Starch increases paper strength & also used as paper coating agent

Ever growing paper demand Current – 12.5 MMT Projected to 20 MMT by 2030

Derived form Germ is claimed to better than extra virgin Olive Oil

Corn Oil Consistent Growth in the Starch Industry in the Last 5 years.

Current Production-Limited

Projected Production– Big upside

New opportunity Big Scope of demand

New application ( Bags, Car Parts, etc.) will help in increasing the demand for grains

Corn Starch- Fibre

New Application segment

4.3

7.5 6.8 9.3

12.0

18.1 17.2 17.5 19.5 20.0

1960 1970 1980 1990 2000 2010 2011 2012 2013 2014

Maize-Domestic Consumption ( MMt)

Changing Food Consumption Pattern in Urban & Rural India

Source: Planning Commission Steering committee for Agriculture

Key Driver : - Urbanisation, Changing Food Consumption Pattern

• Processed Food ( Use of Corn Processed & Packed Foods) • India - 3rd largest egg producer & 5th largest poultry meat producer • Rising demand for Poultry, Milk and Fish ( Use of Corn as Feed)

0.0 0.2 0.6

2.3

5.2

9.0 8.8 8.9

10.5 11.0

1960 1970 1980 1990 2000 2010 2011 2012 2013 2014

Maize-Feed Consumption (MMt)

CHALLENGES TO THE INDUSTRY DEMAND

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Rise in the Productivity due to SCH

Adoption of SCH (Single Cross Hybrids) led to substantial increase in productivity. But the yield still lower than the world average

Maize Growing Districts and Productivity Mapping

• 524 districts out of total 640 grow Corn but Only 168 districts had >10,000 ha under maize. • 340 districts had maize yield less than 2 Mt/Ha in TE 2009-10. • Only 76 districts which harvested maize grain more than 3 Mt/Ha ~65% district has low yield levels because: • Lower Hybridisation • Lower crop management • Environmental conditions

WHY THESE CHALLENGES NEEDS TO BE ADDRESSED

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Demand to double in developing world by 2050

• Population growth • Livestock revolution: Meat & Dairy • Use of maize for biofuel

Imports for developing country will increase 24% by 2050 – equalling 30 B $ World Market export prices for maize are expected to almost double over the next 20 years http://www.oxfam.org/sites/www.oxfam.org/files/rr-exploring-food-price-scenarios-010611-en.pdf

Demand for Maize

Asia South Asia

POSSIBLE SOLUTIONS TO ADDRESS THESE CHALLENGES

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Technologies: Key for Improving the Productivity Gap

2.6

10.0

6.0

50-75%

15%

20%

India

Avg. Yield

( Mt/Ha) SCH Insect

&Disease

Protection

Weed Control Drought

Tolerance

??

China

USA Closing the Gap Ideas

Developed

Countries MT/Ha)

Developed

Countries MT/Ha)

Increasing hybridization

Rabi & Spring Maize could help meet

demand requirements

Improved cultivation practices, better

inputs & Mechanization

Focus on post harvest management

practices

Potential for Increasing acreages & Challenges

Potential for Crop Diversification

Andhra Pradesh- Rabi Rice

Punjab Kharif Rice

Targeting Non Traditional Areas

Expanding area under SCH in East, North East states, J & K , HP

High productivity of SCH Maize during Rabi season (9-10t/ha) Potential for further enhancement of Maize

Quality seed promotion through Govt. channel is a strong link for increasing the maize production

Labour increasing challenge

Activity % cultivation cost

Sowing 6 to 7% (~1000 Rs/Acre)

Harvesting 18 to 20% (~3000 Rs/Acre)

? Solution

Mechanization

Cost optimization

Indian Dairy Industry- a Key Future Demand Driver for Corn

• Largest milk producer in the world

• 132 Million tonnes (2012 -13) - NDDB

• 127 Million Milch Population - NDDB

• Demand for milk -200 million tonnes

(2021-22) vs 175 million tonnes.

• 80% of India’s dairy industry is unorganized Cu

rre

nt

Sce

nar

io

Fod

de

r M

arke

t D

ynam

ics

• Annual domestic demand for compound

feed in India > 25% CAGR = 70 M Mt.

• The gap between demand and supply of

fodder is approximately 60%.

• 80% of fodder depends on Crop residue

with low energy, protein and digestibility.

De

man

d &

Su

pp

ly

Gap

M

ilk P

rod

uct

ion

Year Total Fodder Acres

Fodder Cereal Crop area

Maize area as fodder

2010 8.3 4.40 0.9

2015 8.3 4.40 1.1

2020 8.3 4.40 1.4

2025 8.3 4.40 1.8

2030 8.3 4.40 2.2

*Assumption: Area in Million Ha

Fodder acres – Constant (Pressure on land for food)

50% of the fodder cereal will be replaced by fodder maize by 2030

Per year increase in Maize fodder acreage is taken as 5%

Riding the Demand Wave

Scenario-2 Scenario-1 Scenario-3

•Business As Usual (As per current levels)

Acreage growth ~1%

Hybridization @ 75%

Hybrid yield 5 Mt/Ha in 2025

•Likely Production - 28 M MT by 2030

•Likely Production - 37 M MT by 2030

•Likely Production - 45 M MT by 2030

Acreage growth ~0%

Hybridization @ 90%

Hybrid yield 5 Mt/Ha in 2025

Thank You

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