Global CEO’s Message

Putting purpose at our strategy pivot

Our strategy is overarching and is built around critical global priorities. We are helping create sustainable, robust food systems that can withstand not only climate change, but also crises such as the one we are living through right now, helping over 500 million farmers protect their crops.

Dear Shareholders,

It gives me immense pleasure to share with you that we have successfully completed in the very first year the integration of Arysta LifeScience with UPL, creating a post-patent behemoth with revenues in excess of US$ 5 billion and EBIDTA of US$ 1.05 billion.

We are now empowered by a new purpose and it defines what we are and what we aspire to be. Our OpenAg network transcends geographic borders and creates win-win partnerships. We are a unique confluence of global outreach with local insight. Our presence in our major markets allows us to better understand specific market trends and grower requirements, thus enhancing our ability to develop tailored local products consisting of one or more formulated, ready-to-use mixtures of different active ingredients that solve the needs of growers of a particular crop in a specific country.

ON INTEGRATION AND PERFORMANCE

FY2020 saw us complete the integration of Arysta LifeScience into UPL ahead of plan and deliver on the synergy targets. Worldwide, our teams have worked relentlessly through the year to put together this wonderful coming together of two companies. The success of the transaction can be seen by the performance of each region in our business. We have optimised manufacturing footprint, increased procurement efficiency, enhanced R&D bandwidth and consolidated IT and support functions. We now have a broader portfolio, enabling us to offer our customers complete crop solutions and create better opportunities for cross-selling. Our global team is rallied around our strategic purpose; and overall, we reported cost synergies worth ` 773 crore in FY2020.

The amazing thing about our performance is that, in our integration year, we outperformed the industry. I have the pleasure to report a strong financial and operating performance for FY2020. During the year, our revenue grew by 13% to ` 35,756 crore from ` 31,616 crore, our EBITDA surged by 18% to ` 7,452 crore from ` 6,312 crore in FY2019. Our EBITDA margin stood at 21% in FY2020 (20% in FY2019). One key target for the reporting year was to reduce our net debt post acquisition; and our ` 4,400 crore debt reduction is a testament of our strength. We are sharpening our focus on cost rationalisation, optimal capital allocation and a stronger liquidity buffer.

ON VALUE FOR ALL

We began our sustainability journey long back because we believed it will create more value for the grower and the world. Our focus is to bring sustainability to our farmers in an effective manner, so that it reduces cost and increases yields. We remain engaged with farmers throughout the crop life cycle from pre-planting to post-harvest. Our perspective is that farmers have a variety of requirements than just controlling a pest or a disease. They want to produce healthier yields with a long-term focus, because they make a living out of it. We are offering need-based solutions and technologies that support farmers. We are committed to develop or outsource whatever technology is required to provide them the best-in-class portfolio and least exposure to risk. Also, we believe that our platform will provide that focus and align all stakeholders on our focus; and in the meantime, we will enlarge our market share so that this platform becomes more valuable.

ON BUILDING OUR BIOSOLUTIONS PORTFOLIO

Our biosolutions business is one of the fastest growing segments and we are consistently investing in it to enhance our capabilities. We are offering ProNutiva®, an exclusive programme that integrates natural BioSolutions (bioprotection, biostimulants and bionutrition) with conventional crop protection products to meet or exceed the real-world requirements of today’s growers. This is a revolutionary programme to offer farmers better yields for higher margins and to meet food demands in a more sustainable manner.

ON COMBATING COVID-19

As the world faces the unprecedented threat of the COVID-19 pandemic, UPL continues its operations with its plants running to meet the challenges of providing stable and reliable services to farmers around the world. We recognise that our products are essential, and even more in crucial times like these.

The crop protection business is an integral part of this critical ecosystem, which we take seriously as both a privilege and a responsibility. Providing stability to the world’s food supply is our top priority, and we have reason to believe that in the long run, our food supply chain will come out even stronger than before.

As a part of our COVID-response initiative, we have donated ~US$ 10 million and supplied ~US$ 3.3 million worth of Private Protective Equipment (PPEs) to external stakeholders. We have produced more than 6,000 litres of sanitisers and disinfectant solutions for police and hospitals. Also, we have provided spray equipment to disinfect public areas, using 1.15 million litres of sanitising solution.

ON AN INSPIRED GLOBAL WORKFORCE

We have created an inclusive work environment where employees are encouraged to contribute their unique talents, skills and distinct perspectives. We believe that ‘Purpose’ flourishes when we have a team with diverse set of backgrounds, experiences and perspectives.

COMPETENCIES TO CONSOLIDATE

POST-PATENT

We will improve our product management through end-to-end supervision of key molecules, best-in-class market intelligence and strategic planning, rapid identification and execution of post-patent opportunities, striving for cost and quality leadership in everything we do.

SMART R&D

A community of great technical business developers that work ‘glocally’ in a team and understand farmer needs, supported by the best lean network of field stations/labs, working with partners (OpenInnovation), where ideas flow from the bottom up and outside in, to be transferred fast, globally.

BIOLOGICALS

We are investing in dedicated sales, marketing and technical personnel, as well as training and BioSolutions talent development. We will ramp up our R&D efforts in at least four key platforms (plant extracts, seaweed, pheromones and micro-biologicals)

DIGITAL

We use digital tools and AI to build a flexible digital commerce engine that can adapt to a variety of go-to-markets, providing agronomic advice to farmers using big data, and offering traceability tools to food chain partners. AI is expected to reduce cost-to-farm and agronomic risks, while protecting finite resources

LEADERSHIP TEAM

Excellent leadership is a prerequisite to lead in our industry and to navigate our teams through this transformation. We will implement a strong talent development programme and culture to select, retain, promote the best industry talents. The employee and customer experience must be in sync with our
brand ambition

IN STEP WITH GLOBAL SUSTAINABILITY GOALS

We are committed to reducing our environmental footprint by efficient use of resources in line with ‘UN Sustainable Development Goals’ to help transform our world. Many operational improvements at our plants worldwide target energy conservation, efficient water and waste management and environment care. With immense pleasure we announce that, our Dow Jones Sustainability Indices (DJSI) score in 2019 has been enhanced by 60.6% compared to the
previous year.

We have a dedicated team seeking global opportunities to enhance environmental conservation efforts called the ‘Green Cell’. The team comprises technocrats and scientists, who identify emerging technologies and avenues to diminish our environmental footprint. The key focus areas of the Green Cell are: liquid waste treatment, solid waste treatment and air pollution control. It has undertaken various new technology adoption initiatives, including Forward Osmosis (FO), scaleban, volute press, Moving Bed Biofilm Reactor (MBBR), Dissolved Air Floatation (DAF), thermogenesis reduction in Effluent Treatment Plant (ETP) bioreactors and rainwater harvesting to make our operations more sustainable.

We are working towards new levels of sustainable growth, and towards generating a deeper impact on society, where agriculture is properly valued, food is sustainable, and farmers grow and prosper. We have a fundamentally optimistic view on the future of agriculture; one with no limits, and no borders, that feeds sustainable growth for all.

Warm regards

Jai Shroff

Global Chief Executive Officer