Agrochemical is an essential input in agriculture. And the term includes a wide range of products. Such as fertilizer, pesticide, insecticide, herbicide, fungicide, hormones, growth agents, and micronutrients. Here in this post, we intend to explore how to start an agrochemical manufacturing business with a feasibility report.
Agrochemicals is a knowledge-based chemical product. Additionally, agrochemical manufacturing is a highly profitable and lucrative opportunity. However, the business demands substantial capital investment and strategic planning. Furthermore, the business demands the right skills and previous experience in the specific field.
Generally, agrochemical products come under two basic categories. These are technical grades and formulation. The manufacturing of technical-grade agrochemicals attracts huge investments and infrastructure.
Additionally, you can not initiate that business on a small-scale basis. Additionally, this business has enough scope for building a brand and expansion to scale up.
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Is Agrochemical-Related Business Profitable?
After seed, agrochemicals are the major essential inputs in cultivation and farming. And the demand for the specific type of products increasing rapidly.
To meet the rising diversified food demand, the commercial cultivation of high-value crops is increasing rapidly. The growth of this market is driven by growing farmers’ attention towards superior quality agrochemicals, which are balanced and nutritive.
The growing population and declining arable land to feed the resultant population are driving the overall agrochemicals market. Increasing pest concerns and the emergence of a variety of agrochemicals are expected to drive the demand for agrochemicals in the near future.
The global agrochemicals market was valued at USD 207.5 billion in 2014. It is projected to reach USD 250.5 billion by 2020, at a CAGR of 3.2% from 2015 to 2020. However, Asia-Pacific dominates the global market with a share of around 36.7%. Therefore, starting agrochemical manufacturing is financially viable and has great market potential.
6 Steps to Start Agrochemical Manufacturing Business
1. Create a Business Plan
First of all, you will need to select the product. Do some market research on agrochemical products. According to your skill and previous experience select a product that has good acceptance in the market. Even if you can, you can initiate a new innovative product. In that case, you can protect the product patent registration.
Secondly, determine the size of your business. Because this type of business demands a lot of investment in plant & building, machinery, raw materials, staffing, and marketing. Additionally, here we put some of the important considerations that you must include in the plan.
- Executive Summary
- Management Description
- Market Analysis
- Organizing & Management
- Product Line
- Financial Projection
- Funding Request
- Marketing & Sales Promotion Strategy
2. Business Compliance
The agrochemical industry is highly regulated by the Govt. of every country. Therefore, the business demands different licenses from the authority. It may include licenses for production, storage, and marketing. Additionally, you must register your business.
Protect your product brand name with IPR registrations. Contact a local business consultant to know the tax liabilities and yearly compliance liabilities of your business.
3. Plant Setup & Machinery
The next step is to plant setup and purchase machinery. You will need to secure a place for production. And according to your product, you will need to purchase the machinery. You can also get the manufacturing technology from the Govt, and research centers of your country.
And they will guide you about establishing the plant, required machinery, raw materials, and manufacturing process. However, some of the basic required machines are the mixer and grinder, mixing tank with the stirrer, weighing machine, liquid bottle filling machines, pouch filling machines, sealing machines, and carton strapping machines.
4. Raw Material For Agrochemical Manufacturing
It depends on what product you are producing. Generally, agrochemical items come in different forms. Such as powder, granular, liquid, or pallet. However, in the formulation business, you will need to procure the technical grade material for manufacturing pesticides, insecticides, etc.
Additionally, if you are producing plant growth agents, you will need to procure micronutrients. These are boron, copper, magnesium, molybdenum, manganese, zinc, etc.
5. Hire Manpower
Hire the right people for the overall success of the business. Some of the most important positions are production manager, logistics in charge, accountant, quality personnel, and marketing personnel. You must keep skilled and experienced employees.
Additionally, you right software for smooth accounting and logistic operation. This business includes a wide area of operations. And the failure of a single department may land up with an overall failure of the business.
6. Promote Your Product
You must have a solid and intensive distribution network of your own. The bottom line is you have to ensure the availability of the product in every possible retail location. So pay attention to the appointing of distributors with a good deal.
Product packaging also plays an important role in this industry. Good quality and attractive packaging help to boost the appearance of the product.
Furthermore, you must have some sales promotion strategies. Remember one thing – you can’t create the market. You can only cut the share of the total market.
Finally, field trials and farmer’s meetings have great potential for increasing the awareness of the product. Additionally, consider offering some lucrative financial deals to your distributors, dealers, and retailers.
Footnote: Agrochemical manufacturing is not everyone’s cup of tea. It demands dedication and tremendous motivation. Check whether you have what it takes to become a successful entrepreneur in the agrochemical manufacturing business.