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Venture capitalists see agri research as good bet

Aparna Krishnan

MUMBAI, Sept. 13

VENTURE capitalists (VC) in India perceive that agricultural research, as of now, is the one of the best bet for funding.

Mr Pradip P Shah, a venture capitalist and Chairman, IndAsia Fund Advisors Pvt Ltd, said: ``The market for agricultural research is ripe in India. The impetus comes from the fact that we have a large domestic market and the potential to bring out quali ty products to tap international markets.''

The second area of growth is seen in ``biotechnology being used for industrial purposes'' such as pollution curbing or checking technology, enzymes, tissue culture, etc.

The potential for industry-based products is huge, said another VC. Institutions such as the Central Scientific Institute for Industrial Research and the Department of Science and Technology have done a fair amount of work to further agricultural researc h.

According to Professor V. S. Ramamurthy, Secretary, Union Department of Science and Technology, the Department came up with a technology that can increase the yield by three and a half times than the previous year's yield.

But this was not enough, said the VC. ``Entrepreneurs need to take cue from this and enter these areas, because we are ready to fund them'', say venture capitalists.

The VC clan in India, though, are rather skeptical about the growth prospects of the biotech industry. Painting a grim picture, a Mumbai-based venture capitalist said the health care industry in India was almost non-existent for biotech companies due to lack of Intellectual Property Rights.

``Also there have been no commercial breakthroughs in the agricultural research in recent years'', he added.

The overseas market for the healthcare sector is posing a major problem. An analyst said, `` Health care industry which is the largest in the United States is almost closed for Indian companies because of substandard quality. Indian companies cannot aff ord to acclimatise to US FDA (Food and Drug Administration) norms simply because it will drain their resources. Hence, the only way to enter the overseas market is through alliances or collaborations with global firms''.

Shantha Biotechnics is one company that has been successful in this venture. The company came out with the first indigenous biotechnology based human healthcare product, `Shanvac-B' , a Hepatitis-B vaccine. Shantha was also successful in roping in a mult inational pharma company, Pfizer, as its marketing arm, both locally and globally.

Mr Varaprasad Reddy, Managing Director, Shantha Biotechnics Pvt Ltd, said ``We have signed two separate deals, one with Pfizer India and the other with its parent. Pfizer India will be presented with the first opportunity to market whatever product that we make.''

Mr Pradip Shah said, "There are not many biotech companies mushrooming as one would like to believe. But yes, there is a definite increase in entrepreneurs taking up biotechnology as a serious venture''.