Camson Biotechnologies Limited

A leader in Agricultural Innovation

Overview

Source: 3

Activity

India's first integrated agricultural biotech company

First mover advantage – Biocides

All set to leverage the hard work put in over the last one and half decades

Competitive Advantages Growth over the Years

CAGR of over 80% (FY 06–10)

Consistent EBITDA Margins of 19% + in last 5 years

Consistent PAT Margins of 16% + in last 5 years

Financials

EBITDA

Revenue

PAT

Business verticals:

− Seeds

− Biocides & Bio fertilizers

(Amt Rs. in cr)

Overview

Vision & Mission

Source: 4

Vision: “Camson visualises a healthy and disease-free society by providing safe food”

Mission:“To be a world-class manufacturer of biotechnology products which are effective, non-poisonous, eco-friendly, zero-residue and cost effective through state-of-the-art technology, backed by on-going research and development activities thereby providing good health to all.”

Agenda

Source: 5

Overview

IndustryCompany profile

Future Roadmap

Growth Drivers

Financials

Indian Agriculture Industry

Source: 6

Growing PopulationReducing Arable Land due to

Rapid Industrialisation Use of Crops as Bio-Fuels

Food Scarcity Crisis

Will require high yield seeds & bio-fertilizers to improve agriculture productivity

India would be short of 14 mmt of food grains by 2017 if the present growth rate of food grain production continues.

Source: Govt. of India

Expected to grow from 1.1 bn in 2009 to 1.9 bn by 2050

Source: UN Population Division (2005)

Per capita availability of agri land

Source: Union Agriculture Ministry (2006)

0.33 ha 0.14 ha 0.05 ha1951 2001 2035

Industry Overview – Agrochemicals (Pesticides)

Source: 7

Global Agrochemicals Industry

Global Agrochemicals Industry grew at a CAGR of 9.3% from 2003 to reach US$ 41.7 billion in 2008.

Herbicides (45%) and Insecticides (33%) are the largest consumed agrochemicals.

Expected to grow at 7.5% from US$ 1.36 bn (2009) to US$ 1.7 bn (2012).

4th largest producer in the world after the US, Japan and China.

Produces 16% of the world’s food grains; responsible for only 2% of world’s pesticides usage.

Approx. 18% of the crop yield worth Rs. 900 bn is lost due to pests every year in India.

Indian Agrochemicals Industry

Pesticide Consumption in India

Global Pesticide Consumption

Source: SBICAP Report, Mar 2010

6.0

2002

2.3

2001 2008

41.7

2007

9.9

2006

2.6

2005

1.6

2004

15.0

2003

Yoy growth (%) Market size

US$

bn

(%)

Chilli OthersRice VegetablesCotton Wheat

9%12%25%

MaizeFruits & Veg OthersCotton SoyaRiceSource: CARE Report, Mar 2010

Industry Overview – Indian Seed Market

Source: 8

6th largest seed market in the world. Estimated to be Rs. 49-55 bn.

Growing at 12-14% annually vis-à-vis global market which is growing 4-5% annually.

Categorised into:− Biotech trait suppliers− Hybrid seed players / breeders− Companies that provide seeds to farmers

Constituents− Public Sector: Mostly focus on high volume

low value certified seeds such as pulses, wheat and soybean

− Private Sector: Focus on high-value hybrid seeds such as cotton, cereals and vegetables

Currently exports account for less that 5% of the total hybrids market in India

The country exports predominantly to South-East Asian countries Source: SBICAP Securities Research

Indian Seed Market Size (Approx. Rs. in bn)

Indian Seed Market

Farm Saved Seeds – 75%

Commercial Seeds - 25%

Public - 24% Private - 75%

Unorganised (without research

capabilities) 43%

Organised (with research

capabilities) 57%

Hybrid Seeds v/s Genetically Modified (GM)

Source: 9

Difference

Long-term Effect

• Taking desirable gene sequences from other plants (and even animals)

• Result of a new technology that may have serious drawback

• Little is known about the long-term effects on the consumer of the extra gene sequences.

Genetically Modified (GM)

• Crossbred species of a two closely related but different parent vegetables

• Hybrid vegetables have a favorable public opinion since they have existed naturally for centuries

Process

• Only happens in the laboratory because it combines DNA from organisms (plants or animals) outside of a vegetable's species

• Hybridisation happens regularly in nature when closely related species cross-pollinate

Hybrid

Advantages of using Hybrid Seeds in Horticulture

Source: 10

Higher Returns to the Farmers

Greater Productivity

Better Adaptability

Better Quality Produce Fresh, attractive and

free from disease Better transport

quality Suitable for processing

Increase in the yield per unit area per unit time due to the development of varieties with high yield potential, early maturity and improved plant architecture

Have wider adaptability to various environments

Possess the characteristics suited to off-season production

Commercial sowing in off-season gives high yield and better economical income to the poor growers

Agenda

Source: 11

Overview

Industry

Company profile

Future Roadmap

Growth Drivers

Financials

Milestones & Achievements

Source: 12

Exclusive Agreement with Government of Uttarakhand

2004-05

2005-06Collaborative Research Agreement on Molecular Genetics with the University of Dharwad, Karnataka

2007-08Identified as One of the Fastest Growing Technology Companies and placed at 17th in the Technology 50 India 2008 Programme conducted by Deloitte Touche Tohmatsu, Asia Pacific

2007-08

In-house R&D Unit recognised by Govt. of India, Ministry of Science and Technology, New Delhi

2009-10

• Procures land for 3 production units in Nangal(HP), Kotabagh (Uttarakhand) & Aligarh(UP).

• Launch of “Sonmat”, yellow skinned watermelon.

• Launch of Cherry tomato• Launch of “Calbase”- Biocide for soil

application.Started Operations

1993

1995Became a Public Limited Company

Camson’s Pioneering Products

• First Indian company to launch a seed variety giving yellow tomatoes

• First Indian company in India to research, produce and market unique seeds like ice box watermelons under 3 kilos out of their own R&D facilities

• First Indian company to produce watermelon with yellow skin

Business Segments: Complete Solutions for Farmers

Source: 13

Currently its business consists of 3 verticals - seeds, biocides and bio-fertilizers

Seeds Proven track record of hybrid

vegetable seeds Range of over 49 varieties Pipeline of an additional 70

more varieties

Biotech products (Zero-residue)

Biocides In house library of 3700

selected and characterised microbes

Effective in controlling various pests and pathogens

Leading edge in innovating/ formulating effective biocides

Bio-fertilizers Effective mobilisation of

nutrients to plant Reduce the need to use

chemical fertilizers by restoring the soils natural nutrient cycle and enhancing the soil conditions

Challenges for Farmers Solutions by Camson Hybrid Seed varieties - Offer maximum compatibility with organic and

natural conditions and better yields Bio-fertilizers - Unique combinations of bio-agents that enhance the

concentration of plant nutrients in the soil Zero-residue Biocides - enable farmers to access higher-value

markets by meeting stringent requirements on pesticide residue levels

Supply to the increasing global demand for food

Reducing the negative impact of crop protection practices on consumers, farm workers and the environment

Strong Product Portfolio

Source: 14

Revenue Contribution Approximately 64% Approximately 36%

Product Features

• Longer shelf life• Higher realisation due to unique characteristics• Offer great protection period• Pests/insects do not develop resistance to biocide even after multiple uses• Fewer sprays, in turn saves labour cost• Greater yield per acre• Zero residue product• Can be used along with chemical pesticides• Cater to wide range of crops

Product Segments Hybrid Seeds Biotech Products (Bio-fertilizers and Biocides)

Product Matrix (till date)

Hybrid Seeds (48 varieties) Biotech Products Type (27 Variants)

1. Watermelon (5)2. Tomato (11)3. Chilly (4)4. Brinjal (15)5. Okra (3)

6. Bitter Gourd (4)7. Bottle Gourd (2)8. Sponge Gourd (2)9. Sweet Corn (1)10. Musk melon (1)

• Biofungicides (6)• Bio Insecticides (9)• Bio Stimulants (6)• Bio-Fertilisers (6)

Pioneer Products

Source: 15

Product Major Crops For Control and Elimination of

Calphomil Veg, Fruits, Flowers and Cereals Fungal infection like downy mildew, phytopothora, pyhium, wilt, blast

Calnova Veg, Fruits and Flowers Mites(sucking pest), Thrips

Calstim Veg, Fruits and Flowers Bio-stimulants

Caltika Veg, Fruits and Flowers Plant tonic

Calpaste Veg, Fruits, Flowers, Cereals and Cotton Insecticide for all soft bodied insects

Calbahaar Veg, Fruits, Flowers, Cereals and Cotton Prevention and control of soil borne pathogens and insects

Biocides Product Portfolio

Seed Product Portfolio

Key Crops Brands Description

Watermelons Netravati and Vedavati • Higher margin product and expected to be future growth driver

Tomato Ganga, Songanaga and Akash Ganga

• The second highest revenue earner• First Indian company to launch a seed variety giving yellow tomatoes

Chilies Gomti and Pennar• Gomti chilly is dark green with 8-10 cm length.• This variety of seed has been the highest gross earner for Camson.

Location and Target Markets

Source: 16

Target Farmers :

Locations

Currently active in Six States –Andhra Pradesh, Uttar Pradesh (including Uttaranchal), Maharashtra, Madhya Pradesh, Karnataka and Haryana

These six states account for 85% of sales Intends to expand on pan-India basis and

enter in International markets

Three categories Category A : Export oriented farmers. Category B : Who have not been able to

find remedial solution for a particular pest/disease

Category C: Who understand harmful effects of chemical pesticides

Currently ,the company is setting up a production unit in Uttarakhand to cater exclusively to the Northern India market

Camson has research center in Aligarh, Uttar Pradesh

Headquartered in Bangalore, Camson has a 25 acre R&D centre and production facility in Dodaballapur; also in process of developing another R&D center in Dodaballapur

Target Markets

Setting up a production facility in Nangal, Himachal Pradesh

Sales & Distribution Network

Source: 17

13 Branches all over India Dedicated team of 300 marketing professionals across India Wide, well-connected network of 300 distributors and 2,600 dealers across India

CAMSONMarketing

Sales Officers

Demos Free Consultancy

Authorised Distributors (AD):Obtains product at a lower price than APD

Authorised Preferential Dealer (APD):Larger retailer at taluka level who also supplies to some retail shops

Retail Shops

Field Assistants

Distribution is through its Bangalore centre. Seeds are normally couriered immediately and delivered within 3-4 days.

For biotech products which have a longer shelf life and are much more bulky, Camson has Clearing & Forwarding agents across the country for storage and handling

Employs Field Assistants at local level on a temporary basis during sales promotions

To reach farmers directly organises various kinds of trials and demonstrations

Give general advice to farmers on various products and also write out “prescriptions” on appropriate usage of biocides along with seeds

Manufacturing Facilities

Source: 18

Location Karnataka (Existing)

Karnataka(New building) Nangal (HP) Aligarh (UP) Kotabagh

(Uttarakhand) Total

Type R&D Facility Biocide plant R&D Lab Biocide plant

Land Area (Acres) 20 1.8 12 1.5

Area (Building) 45,000 sq.mts 30,000 sq. ft 40,000 sq. ft 6,000 sq. ft 30,000 sq. ft

Capex (Rs. mn) 100 80 10 80 270

Capacity (ltrs on a per shift basis) 900,000 NA 900,000 NA 800,000 2,600,000

Expected Operational Date - 31-Mar-12 31-Mar-11 31-Mar-12 31-Mar-12

Tax exemptions in biocides units in Nangal and Kotabagh

Manufacturing Facilities Quick Facts

Have been set up in southern and northern parts of India, keeping in mind the diverse demand in both.

Supported by well-equipped and internally connected storage facilities covering key locations in India.

Currently, has one facility at Dodaballapur in Bangalore Setting up additional facilities in Uttarakhand and Himachal Pradesh Seed multiplication is through contract farming at different locations Total area under contract farming is approx. 1000 acres Contract production (Hybrid seeds) spread over 1000 acres in

Karnataka, Andhra Pradesh and Tamil Nadu Tax advantage for the 25 acre centre in Dodaballapur which has

agricultural, residential and industrial units housed within it

Strong R&D Capabilities

Source: 19

Strong focus on in-house research capabilities has resulted in successful portfolio of products over the past 3 years

• 22 biocides

• 7 bio-fertilizers

• 17 hybrid seeds• The ongoing research will add another 70 more varieties of

seeds

Entire Biocides research process takes about 9 - 12 years

• Has already established over 3,700 selected microbes

Entire Hybrid Seeds research process takes about 5 - 6 years

• Has a large number of selected nucleus germplasms

R&D Facilities

• Already has its 25 acre R&D centre and production facility in Dodaballapur

• R&D facility in Aligarh, UP & planning to set up another R&D center at Dodaballapur

Recognition • In-house R&D Unit recognised by Govt. of India, Ministry of Science and Technology, New Delhi

Developed a proprietary technology platform

• Consisting of a microorganism database, screening technology and a natural product compound library

Camson's ability to leverage its proprietary technology platform combined with frontier science continues to advance Camson's reputation as a leading innovator in the biotechnology space

Camson’s Zero Residue Farming Products

Source: 20

Biocides

Bio-fertilizers

MicrobialSecondary Metabolites(Bio-agents beneficial to soil

conditioning and improve the plant physiology and produce)

Based on Formulates of

Production of Biocides and Bio-fertilizers

Organically derived biocides and bio-fertilizers to protect crops and enhance growth

Difference

Synthetic Chemicals Biocides and Bio-fertilizers

Pests develop efficacy They cause acute and chronic health

effects Affect the equilibrium of agricultural

systems and the environment Also lead to socio-economic problems in

the farming community

Mobilize the micronutrients in soil to maximise their utilisation by the growing plant

Work specifically against certain pests, without harming other organisms

Since they are living strains, they assimilate into the ecosystem without leaving any toxic residue

Due to recent technological advances and increasing environment and safety concerns, biologically-derived products are becoming increasingly important components of Integrated Pest Management

Management Team

Source: 21

Management team comprises of a core team of 35+ senior technocrats, scientists and sales professionals

Name Designation Qualification Experience

Mr. Dhirendra Kumar

ManagingDirector

M.Sc. Ag., MBA Total of 27 years of experience. Has extensive expertise, especially in promotion and marketing of agricultural products.

Mr. A N Singh Non-Executive Director

M.Sc. Ag Has worked for over 40 years in the agricultural sector. Was with the Ministry of Agriculture, Govt. of India & retired as Additional Commissioner. This was followed by assignments as a Consultant to the World Bank.

Krishnaswamy Ramaswamy Iyer

Non-Executive, Independent Director

B.A (Hons), LLB, CAIIB

Has over 42 years of experience in the banking and financial services industry. Has held positions like DGM, SBI; President, San Paola Hambro Finance; MD, EXIM Bank of Tanzania & CEO, Nepal Industrial & Commercial Bank.

Virendra Kumar Singh

Non-Executive Director

Master of Engineering degree, MBA.

He has worked extensively in the automobile sector, innovating and developing new vehicle prototypes, and managing production and sales. He has also been a first-generation entrepreneur running a successful venture of environmentally-viable infrastructure focused on the gainful use of solar energy.

B. C. Madappa Non-Executive, Independent Director

Bachelor of Science degree

Madappa has over 30 years of experience in media and allied industries. He was responsible for the creation and incubation of India’s first professional PR firm and also India’s first direct marketing firm in collaboration with global industrial leaders.

Dr Anirudh Kumar Singh

Non-Executive, Independent Director

M.Sc. in Plant Pathology and a Ph.D

He has over 30 years of experience in Plant Genetics and BreedingDr Singh has published several research articles in reputed national and international scientific journals.

Sanjay Agarwal Non-Executive, Independent Director

M.Com. Agarwal has over 20 years of experience in managing finances, backward integration and global expansion. For over two decades, he has played a major role in making K S Oils a successful and globally integrated venture

Agenda

Source: 22

Overview

Industry

Company profile

Future Roadmap

Growth Drivers

Financials

Shifting demand from Pesticides to Biocides

Source: 23

Hence, the potential of Biocide market is the total Pesticides market

(US$ 1.7 bn by 2012 in India)

India currently consumes only 2% of world’s pesticides usage resulting in large amount of crop yield loss (~18% of the crop yield worth Rs. 900 bn) every year

High emphasis on achieving food sufficiency is expected to drive huge demand for crop protection products in future

Huge Expected Future Demand

20% of food products with residue above tolerance level in India compared to world average of 2%

Impact from use of Pesticides

The increasing awareness about poisonous chemical pesticides will shift the demand from pesticides to Biocides which are very effective and eco-friendly

Biocides as Replacement for

Pesticides

Low usage of Crop Protection

Products at Present

Source: SBICAP Report (Mar, 2010)

Growth Drivers

Source: 24

Apart from above factors, increasing demand for organic products together with increasing awareness, growth of Horticulture & Floriculture, support from Government and lower cost of usage is expected to drive future demand for Bio-tech products

Increasing Population Rising Per Capita Income

High emphasis on achieving food grain

self sufficiency.

Limited Farmland Low YieldUse of high yield seeds

& bio-fertilizers to improve productivity

Low access to fertilizers & high yield seeds by neighboring countries

India’s vast collection of germplasm coupled with its R&D capabilities

India to emerge as an export hub

Increasing min. support prices of agricultural crops

Rising demand for commodities

Driving the use of quality agricultural

inputs

Agenda

Source: 25

Overview

Industry

Company profile

Future Roadmap

Growth Drivers

Financials

Ready to lead the Agricultural Biotechnology Sector

Source: 26

Competitive Advantages

All set to leverage the hard work put in over the last one and half decades. A typical biocide research takes 9 – 12 years. Similarly it takes 5-6 years to launch a new hybrid.

India's first wholly integrated agricultural biotech company with presence in hybrid seeds and agricultural biotech products

Has a first mover advantage in certain product categories. Its future growth will depend on its ability to leverage the growth potential in replacing the chemical pesticides using the residue-free platform.

Equipped to Spearhead the Agri- Biotechnology Sector

Integrated Player

First Mover Advantage – Biocides

Camson @ Inflection Point

Surmounting Challenges

Source: 27

The company can however patent the hybrid seeds in the US. However, through the Plant Breeders right which would be implemented from Sept/Oct 2010, the seeds of a company are protected and can also be licensed.

Hybrid seeds cannot be patented in India Patent Filing

However, the new facilities being set up will take care of these concerns.Unexpected increase in demand

Production Capacity

Camson’s products have already been received enthusiastically by the farmers.It has adopted a multi pronged approach through demos, advertisements and disseminating information of good farming practices & success stories of products

Illiterate farmers and hence poor acceptability

Illiterate farmers

Camson’s Goals

Source: 28

Capitalising on strong and well-balanced portfolio with a special focus on innovative bio-products

Remaining focused on innovation and operational excellence

Focusing R&D efforts on developing effective technologies for raising crop productivity, protecting the environment and improving health and quality of life

Agenda

Source: 29

Overview

Industry

Company profile

Camson Advantage

Future Ahead

Growth Drivers

Financials

Financial Highlights

Source: 30

Particulars FY 2005-06 FY 2006-07 FY 2007-08 FY 2008-09 FY 2009-10

Revenue 8 18 42 49 80

EBITDA 3 4 9 10 17

EBITDA Margin 30% 25% 21% 19% 21%

PAT 2 3 8 8 15

PAT Margin 22% 19% 19% 16% 19%

Amount (Rs. in cr)

First Quarter Results – FY 2010-11

Source: 31

Particulars Q1 FY 2010-11 Q1 FY 2009-10 Change %

Revenue 20.71 19.65 5.39%

EBITDA 5.29 3.98 32.91%

EBITDA Margin 25.6% 20.3%

PAT 5.41 3.72 45.43%

PAT Margin 26.2% 18.9%

Source: 32

Appendix

Regulatory Aspects – Current Regulations

Source: 33

Provide basic regulatory structure to ensure seed control in India. The Act provides for compulsory quality control and voluntary certification of seeds of any notified kind and variety and truthful labeling of seeds. The Act also created the various seed regulatory bodies and defined their functions & provided guidelines on minimum limits of germination and purity, regulation of the sale of seed, certification, etc.

SEEDS ACT, 1966 &SEED Rules, 1968

• This order was issued under the Essential Commodities Act, 1955, and provided the procedure for registration of every person carrying on the business of selling, exporting or importing seeds of a notified kind or variety.

Seeds Control Order, 1983 (under the E C Act, 1955)

• This policy relaxed norms for the import of technology and parental material, and opened the doors to MNC seed companies. However, the policy allowed imports only if the foreign supplier supplies the parental line seeds or breeder seeds to the Indian company within two years of the first consignment.

New Policy on Seed Development, 1988

• It recognises the need to protect the plant breeder’s right so as to stimulate R&D in both the public and private sector. It defines the process for plant variety registration and also requires disclosure of the expected performance under given conditions. The Act gives the farmer the right to claim compensation if the seeds does not perform as expected. It also extends the breeders’ right to production, selling, marketing, distribution, export and import of seeds and/or propagating material of protected variety.

The Protection of Plant Varieties and Farmers‘ Rights Act (PPVFR), 2001.

The Protection of Plant Varieties and Farmers‘ Rights Act (PPVFR), 2001.

• This policy laid down the foundation for comprehensive reforms. It included implementation of an effective sui generic system for intellectual property protection to stimulate investment in R&D of new plant varieties. The policy also acknowledged the need to adopt technology and protect the farmer from exploitation.

The seeds sector has witnessed many changes since 1966 when the existing Seeds Act was passed. These include new technologies such as GM seeds and the entry of private and foreign seeds companies. In order to address these changes, the proposed Seeds Bill, 2004 seeks to replace the Seeds Act, 1966. The changes include regulation and registration of all seeds to be sold (instead of only notified kinds), provisions for self-certification and accreditation of private seed testing laboratories, and regulation of transgenic seeds.

Regulatory Aspects – Seed Bill 2004

Source: 34

Aim of the BillRegistration of

Seeds The Bill aims to

regulate the quality of seeds sold, and replaces the Seeds Act 1966

Transgenic variety of seeds will still need clearance under the provisions of the Environment (Protection) Act, 1986 before being registered. A variety of seed containing any technology considered harmful or potentially harmful shall not be registered.

All varieties of seeds for sale (except those sold by farmers directly) have to be registered. The seeds are required to meet certain prescribed minimum standards

The Bill proposes to establish a Central Seed Committee CSC), which may appoint Sub Committees as ‐needed. One of the subcommittees will be the Registration Sub Committee, which shall maintain a National Register of Seeds for all varieties of seed.

Every State Government will establish a State Seed Committee which will have an advisory role

Farmers’ Rights The Bill protects the

right of a farmer to save, use, exchange, share or sell his farm seeds and planting material

However, the farmer cannot sell seeds or planting material under a brand name (if he does then they have to be registered)

Also, all seeds sold by farmers need to conform to the minimum standards regarding germination, physical purity and genetic purity applicable to registered seeds

Consumer Protection

For all registered varieties, seed producers, distributors and vendors have to disclose the expected performance under certain given conditions

If a registered variety of seeds fails to perform to expected standards, the farmer can claim compensation from the producer or dealer under the Consumer Protection Act, 1986

Certification & Registration of

Seeds The Bill permits self

certification of seeds by accredited agencies and allows the central govt. to recognise certification by foreign seed certification agencies

Every seed producer and dealer, and horticulture nursery has to be registered with the State Government.

The Seeds Bill was introduced in the Rajya Sabha on 9 December 2004. Through registration and certification, the draft law seeks to promote quality seeds

Source: 35

Thank You

Camson Biotechnologies LtdNo. 223, First Main, Domlur Second Stage, Bangalore - 560071.Tel: 0091 080 2535 5138 Fax: 0091 080 2535 2232Email: info@camsonbiotechnologies.com Website: www.camsonbiotechnologies.com

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