15 May 2005
Pune, India
The festive opening of the Intervet India’s new corporate office in Pune a few months ago was an important event for the approximately 300 employees of Intervet India. It marked the end of a period of restructuring, which involved the closing of the plant in Hyderabad and the move of the corporate office to Pune. “Our organization is more focused now,” says Victor van Solinge, Managing Director. “All supporting functions like the corporate office, the factory and the R&D laboratories are now located in Pune so that we provide better support to our field force of 100 men. Everything is in place to make Pune the center of excellence for India. Where needed, we can also possibly support other parts of Asia in the future.”
After China and the USA, India is the third largest agricultural economy in the world. India’s participation in the WTO program continues to change the economy and especially the agricultural sector. New quality standards for agricultural products will be introduced and competition will increase with the introduction of imported agriproducts. Achieving clean milk production is the major challenge for the largest milk producer in the world. The WTO regime will also bring new export opportunities, but compliance to the WTO quality standards is a must. Van Solinge: “Naturally, clean milk production has a lot to do with things like clean drinking water, the hygiene situation at farms and the quality of after-milking activities. But if you want healthy milk, you obviously also need a healthy cow. Intervet has the products and expertise to help farmers in keeping their animals fit and productive. Although we see an increasing awareness about food quality and safety issues, we still have a long way to go.”
Foot and Mouth Disease (FMD)
FMD is widespread in India and creates massive economic losses at all levels. Its existence in India limits the beef export opportunities but also hits farmers hard as milk production in FMDinfected animals is drastically reduced. The Indian Government has earmarked FMD control as a top priority and has put in place livestock improvement programs. Last year, a FMD eradication program started in the western part of the country, comprising mandatory vaccination of 40 million animals annually for a period of five years. Once completed, the region will be declared a “Disease Free Zone”. Eventually “Disease Free Zones” will be extended to the entire country. Intervet’s factory in Pune is currently expanding production capacity to be able to meet future demand in India and Asia.
Market
In addition to the prominent role of cattle, another remarkable segment for Intervet India is sheep and goats, with India again having the world’s highest concentration of animals, kept for meat and wool. Intervet has a dominant position in this segment, with de-wormers among the company’s most successful products in this field. Compared with cattle and sheep and goats, the Indian poultry market plays a relatively modest role (five percent of the world market). A typical characteristic of this market is that there is no buffer capacity. Nearly all chickens are freshly bought and consumed. The result is a nervous market, in which it is hard to control prices. “What the poultry market needs is an improvement in its after-farming infrastructure, storage of frozen chickens and processing,” says Victor van Solinge. Food safety is also an issue here and salmonella in particular is a problem. We have the products to fight those diseases. When India succeeds in solving these issues, it could become a major poultry exporter.” The companion animals market is the last veterinary segment of substance for Intervet India. Still a small market, but it’s promising nonetheless.
Belief in the future
Assessing the business as a whole, Van Solinge is quite upbeat. “We are growing faster than the veterinary market,” he says. “We’re number three, the largest multinational and we have specific strengths. For example, there’s no other company with as complete product range as ours. I truly believe we add value to the Indian animal health industry. At micro level we help farmers make better products and hence more profits, while at macro level our products help the country to utilize its resources more efficiently and improve exports of agriculture products. And last, but not least, we have a dedicated workforce. When we recently moved the office from Hyderabad to Pune, 80 percent of the employees chose to move with us. The fact that so many people, despite a lot of difficulties, decided to come with us, says a lot about their faith in the company and their belief in the future.”
