Murugappa to finalise farm equipment JV plans

Fertiliser major Coromandel International, part of $4.1 billion Murugappa group, would soon finalise the outlay needed for its joint venture with two Japanese companies to make farm equipment, said a top group official Thursday.

He said group company Tube Investments of India's large diameter tube project and export oriented sugar refinery of Silkroad Sugars would soon go on stream.

Speaking to reporters here, A. Vellayan, executive chairman, said: "Officials from the Japanese companies will be coming to India soon to finalise the investment details."

He said Coromandel International has entered into a tripartite joint venture alliance with Japanese companies Yanmar & Co and Mitsui & Co to make and sell small farm equipment used in paddy cultivation.

He said the Murugappa group and Yanmar would hold 40 percent each in the joint venture while 20 percent will be held by Mitsui.

"We have deployed 100 machines and the response is good. As per plan we will lease and also sell the machines through Coromandel International's retail outlets Mana Gromor that sell fertilisers," Vellayan said at the group's annual media meet.

Looking forward, Vellayan said the group hopes to grow its turnover by around 18 percent this fiscal up from the eight percent growth during 2013-14.

He said last fiscal the economy was not doing well and the capacity utilisation of the group's various plants was around 70 percent, down from 90 percent logged during 2012-13.

Vellayan said the group invested around Rs.166 crore last fiscal, down from Rs.1,650 crore invested the previous fiscal.

Nevertheless the group did well compared to its peers in various sectors, he added.

According to Vellayan, group companies like Coromandel International and EID Parry India had started the process of merging some of the acquired companies with themselves last fiscal.

On the group's China plans, he said raw materials for fertilisers will be imported from that country and a small office has been opened there.

With the new government in place at the centre a better clarity will be there on the policies for various sectors and based on that the group would chart its next growth plans, Vellayan said.