Grafting profits
MOST COMPANIES cleared for tissue culture by the Department of Biotechnology have so-called buy-back arrangements whereby the scientific part of the exercise is imported and the growing of plants is done in India. The product, say, flowers, are then exported. Thanks to economic liberalisation, an import licence is no longer required and there are no cumbersome formalities.
Unicorn Biotek primarily exports foliage and ornamental plants such as Ficus and plantlets for cash crops like banana and strawberry. Says Biotek managing director Amul Sanghani, a young US educated management graduate, "Though tissue culture was first conceived for the domestic market, we see a great export potential for tissue culture plants now."
Being a late entrant in the biotechnology game, India is at a disadvantage, says C Sivarama Reddy, executive director of the Bio-Tissue Labs in Hyderabad. Says Reddy, "Malaysia, Singapore and even Sri Lanka are exporting more than Indian labs." Reddy and his wife set up Bio-Tissue Labs, a small venture capital company aimed at both export and domestic markets. Reddy too has focussed on ornamentals, but his main thrust is on orchids. Bio-Tissue Labs is scheduled to begin commercial production by the end of 1992. Bio-Tissue's technology is entirely indigenous, unlike Unicorn Biotek's, which has tied up with a government-owned research institute in Belgium.
Western companies find collaboration with Indian firms profitable because labour costs in India are low. Joseph Thomas, executive director of the biotech division at Southern Petrochemicals Industries Corporation (SPIC), explained, "Even with higher infrastructural and energy costs, Indian firms acquire a competitive edge. In addition, there is a lot of entrepreneurial talent." Problems arise nevertheless because of distance and inaccessibility of markets.
However, neither Bio-Tissue nor Unicorn Biotek are involved in such deals. Sanghani argues that buyers abroad are unable to project the market demand three years ahead, and hence their terms are unattractive. "We prefer to commit ourselves on a yearly basis," he says.
SPIC and E I D Parry of Madras are also getting into the field of tissue culture. SPIC has invested Rs 22 crore overall in its project, while Parry has spent Rs 2 crore on R&D alone. Both companies plan large-scale production from end-1992. SPIC experts estimate the international market for ornamental plants alone is worth US $50 billion annually.
SPIC aims at producing 20 million seedlings in three years' time. Its production centre in Coimbatore will grow ornamental flowers for the export market, and horticultural crops, spices, bamboo and eucalyptus for the domestic market. Last year, SPIC's Madras laboratory produced 1.5 lakh seedlings of ornamental plants, which were exported to the US and New Zealand. "The project fetched us Rs 8 lakh and helped us gain experience," says P Nanthakumar of SPIC.
Parry plans to continue working with sugarcane, but is not thinking of an export market yet. Says J Subramani, head of Parry's R&D lab at Madras, "Our efforts are not aimed at large profits from exports, but to develop higher yielding, virus-free sugarcane crops for our confectionery industry." Parry has a captive sugarcane crop spread over 8,000 ha in Nelikuppam in Tamil Nadu and it has also started a sugarcane tissue culture lab there, with an annual production capacity of 1.5 lakh seedlings.
Experts at both SPIC and Parry contend their foray into tissue culture is a logical extension of their corporate policies. "SPIC has all along been in the field of agro-inputs. We produce fertilisers, hybrid seeds and plant-growth promoting substances. Tissue culture work is in synergy with this thrust," explains Thomas.