Zuari Agro Chemicals Ltd has chalked out aggressive expansion for its agtech subsidiary Zuari Farmhub Ltd, which is set to triple its retail footprint to around 2,000 stores across the country in two years.

Besides selling agri-inputs through company owned retail stores, the Jai Kisaan Junction, Farmhub proposes to offer services such as crop advisory, drone-based spraying, credit and insurance facilities, and market linkages among others.

The company presently has 600 Jai Kisan stores in Karnataka, Maharashtra, Uttar Pradesh and Bihar, through which it sells multi-brand agri-inputs such as crop nutrition products such as speciality and bulk fertilisers, organic and water soluble nutrients, crop protection products, seeds and small implements among others.

Omnichannel play

“We want to become the one stop shop for all agri-input needs for farmers,” said Madan Pandey, Managing Director, Zuari Farmhub Ltd. The company is looking at making its retail model an omni-channel play as it seeks to build an online agri-tech platform to reach out to farmers.

“We are building the infrastructure and these physical stores will be a big differentiators for us. We believe that to drive any online adoption in the rural market, we need to have strong offline presence. From these stores we believe we can drive the adoption of new technology among the farmers,” Pandey said adding that the company already has a database of 7 lakh farmers. “Farmers can order from anywhere on our platform and I can supply from the nearest store,” he said.

For expanding its services offerings, Zuari Farmhub is in talks with some NBFCs and banks for extending the credit linkage to farmers. Besides, it is also in the process of acquiring drones to start offering the crop protection spraying services from the next cropping season. “We plan to have our own fleet of drones and will be acquiring about 30-40 drones to start the spraying services soon and may increase the number of drones to 100 as we scale up,” he said.

The company is also building a decision support system as part of its precision farming services, where in the individual farmer’s land will be mapped and will be provided customised advisory and inputs through the crop cycle using drones and satellite images, he said. For the crop advisory part, the company is in talks with many agriculture universities including ICRISAT and is setting up a team of agri-experts and call centre to offer the customised advisory.

Also Farmhub is setting up a technology team of around 30 people in Bengaluru for development of its online agri platform. “We are also looking at making some acquisitions in the areas of IoT, water management and soil management and are in talks with some players as we want to scale it up fast,” he said.

Zuari Farmhub plans to invest about ₹8-10 lakh in each of the 600-700 sq ft Jai Kisan Junction stores that will be operated by two employees. The company plans to set up kiosks in the Jai Kisan Junctions, through which the farmers can use the services.

Pandey said the company’s proposed expansion is manpower-intensive and will generate employment for around 4,000 people. The company is also looking to raise some external capital to fund its expansion plans. “We plan to raise about ₹200 crore mainly through private equity over the next five to six months,” he said.

The company clocked a turnover of ₹700 crore with an EBITDA of ₹40 crore in the last financial year and this year we will be ₹900-950 crore, Pandey said.

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