Clear road ahead for agrifood innovation in IndiaPublished: 12-11-2015
The Indian economy is booming, bringing major opportunities for agrifood industries willing and able to customize their products and services. “Building trust and sound relationships is more important in India than anywhere else we operate”, say KeyGene’s Edwin van der Vossen and Shital Dixit.
It was in 2009 when KeyGene – headquartered in Wageningen and one of Europe’s leading molecular breeding-technology companies, – first established a presence in India. With a population of roughly 1.2 billion – more than double the EU – India has a growing, more-affluent, middleclass. This increase in spending power is paralleled by an increase in the demand for higher-quality foods with greater variety. “These changes are forcing breeding-technology companies to develop crop varieties with improved quality and higher yields”, says Edwin van der Vossen, Vice-President Field Crops at KeyGene.
In biotechnology terms, the Dutch have much to offer India. “The Netherlands in general has excellent knowledge and expertise in this area, whereas in India these qualities have been limited to multinationals”, says Shital Dixit, Business Development Manager Asia at KeyGene.
‘Seeing is believing in India’
The vast majority of small businesses in India, which are often family-owned, have always had a short-term focus. They want – as Dixit puts it – ‘to earn back their investments tomorrow’. The tide is turning however: a growing number of middle-size, often multi-business, holding companies are adopting a longer-term vision combined with investment in R&D. Precisely the type of companies with which KeyGene would like to collaborate. “They understand the value of R&D-driven technologies and of sharing knowledge and benefits with farmers and other stakeholders across the production chain”, says Shital Dixit.
In the six or so years since it arrived in India, KeyGene has begun working with several of these more-visionary organizations. An initial collaboration with Shriram Bioseed has become a key strategic partnership. “We started with a few small, short-term service projects aimed at improving the genetic traits of rice, corn and cotton”, says Van der Vossen. “Now both companies see opportunities to embrace a long-term strategic collaboration.”
Sherin Mary Thomas, Food Valley Ambassador:
“India is an attractive location for clinical trials”
“The biotechnology market is emerging rapidly in India. Multinationals are leading the way, but smaller biotechnology companies are making their mark on innovation and business. Labor and production costs are low in India, which makes it an attractilocation for foreign companies who want, for example, to conduct extensive new-drug trials. The flipside is that there are almost no mechanisms for foreign investment. You need to arrange start-up finance all by yourself or look for collaboration with India-based companies. Moreover, levels of development and infrastructure vary immensely between regions in India. International partnerships, for example, are much more common in the North; in the South people remain somewhat suspicious of companies from abroad.”
Sherin Thomas, MSc, came to the Netherlands in 2004, as a Bachelor in Biotechnology and Biochemical Engineering from Kerala University, India. In Wageningen she graduated as a Master in Biotechnology, after which she became a Food Valley Ambassador. She did a one year internship at Purac. Currently she is Senior Fermentation Technologist at the Dutch company, DSM.
Innovative tools and technologies
KeyGene is developing innovative molecular tools and technologies that enable Shriram Bioseed to improve genetic traits in rice, corn and cotton, leading to better disease and drought tolerance and, ultimately, to higher yields. “We have provided highly-predictive molecular markers for the breeding process, tools for DNA sequencing of their crop varieties and have assembled all this precious information in user friendly databases; altogether enabling accelerated trait improvement”, says Van der Vossen. “Through our collaborative research programs we aim to demonstrate the added value of our technologies for improving several different traits in their key crops. Through our collaboration with Shriram Bioseed our tools and technologies are (indirectly) given a presence on the Indian market.”
Dixit experiences the partnership with Shriram Bioseed as very constructive: “We complement each other”, she says. “KeyGene brings advanced biotechnology tools, knowhow and expertise and Shriram Bioseed contributes its expertise in breeding these crops and bringing them to market. Through working together we are evolving together too, such as when we had to learn how to optimize our technology for farmers in different climate zones.”
Doing business in India has led KeyGene to make some new, strategic, management decisions. “We realised we would have to change our modus operandi – the way we do business”, explains Van der Vossen. “Until now we have been successful through push-technology – the idea that innovative technology sells itself – and we were driven by our innovation responsibilities to our shareholders. Now we are taking a more customer-oriented approach; one that requires us to clearly demonstrate the added value of our technology.”
It’s not only a customer-oriented approach that is key to doing business in India: customization is becoming just as important. “Indian customers expect an extraordinary personal experience”, says Dixit. “Someone who buys expensive designer clothes in a shop expects to receive a nice present (at least) in return. Likewise, our Indian clients appreciate it when they receive free ‘extra’ services from us.”
Building trust and sound relationships are very important in Asian countries and especially India. “Seeing is believing is the mantra here”, says Dixit. “It helps if you sell Indian clients a small product first. If they are happy with it, they will feel confident about embarking on a long-term collaboration.”
Dixit: “You need to be very patient. To get to a desirable level of collaboration takes longer than in the Netherlands. You need to know the key players in a company and catch them at the right place and time and in person; over and over again.” This difficult task is complicated by the size of the country and the huge imbalances in its transport infrastructure. “Before you go to India, plan well and keep in mind that public holidays may differ from state to state”, is her advice.
According to Van der Vossen and Dixit there is no time to waste for Dutch agrifood companies who are considering investing in India. “The market offers major opportunities and the business climate has become more friendly towards foreign investors”, says Dixit. Last year a new government was elected and it has pledged to reform the country’s tax and intellectual property laws to ease doing business in India. “Until now, safeguarding an IP position in India was seen as a tricky business for many foreign firms and this, to some extent, has limited technological advancement in the Indian Biotech sector”, says Dixit. “But now the road is clear.”
Opportunities and challenges in the Indian market: lessons learnt from Dutch companies
Trends and developments in the Indian agrifood sector:
Setting up business in India