M&M signs JV with Univeg of Belgium

MSSL currently handling contract farming through end- to -end solutions in 2500 acres of land in Nashik for grapes in addition to 2100 acres for peer

Mahindra ShubhLabh Services Ltd (MSSL), a subsidiary of automobile giant Mahindra & Mahindra (M&M) and part of the $16.7 billion Mahindra Group, has signed a joint venture (JV) agreement with the $4 billion Belgium-based Univeg.

Under the agreement, the two companies have agreed to form a JV company in which MSSL would have 60 per cent stake while Univeg, the world’s second largest supplier of fruits, would hold 40 per cent.

The company has been set up with Rs 30 crore of capital investment initially. However, capital investment would come at every stage of the company’s operations.

The JV would focus on developing fresh fruit supply chains to provide quality fruit that meet the need of both, domestic and international markets. It would cover all business under the agri-vertical of MSSL except grapes, which constitute of most of the company’s business as of now. MSSL is India’s largest grape exporter, with last year’s turnover of Rs 65 crore, of its total annual turnover at Rs 350 crore.
"There are three basic aims of agri division of our group: increasing farmers'prosperity through raising farm output, producing best quality products toenhance their marketability and exports. This means, MSSL is meant to provideentire agronomy solution to farmers for their all round growth," said PawanGoenka, Executive Director and President, Automotive & Farm Equipment Sectors, M&M.

The JV will benefit from the global expertise of both companies whereinUniveg will provide technical knowhow and best practices in quality control,post - harvest handling of fresh produce, ripening process, and farm agronomypractices and procedures to meet international quality standards.

MSSL which launched Saboro brand apple in Hyderabad and plans toexpand into all metro cities this year, will assist the JV in arrangingcontract farming agreements across India while leveraging its domesticmarketing and distribution network and providing the required local licensingand support services.

The company is currently handling contract farming through end - to -end solutions in 2500 acres of land in Nashik for grapes in addition to 2100 acres for peer. Also, MSSL has tied up with thousands of farmers for appleprocurement directly from farm in Himachal Pradesh.

"Branded fruits consist of a mere 5% of India Rs 200,000crore of total production. Also, India imports around 40% of domestic consumptioncurrently. Hence, immense opportunities lie ahead in this business. Initially,we are targeting 100,000 tonnes of fruits sales under this JV," said AshokSharma, Chief Executive, Agri and Allied Business, M&M.

Univeg imports a huge quantity of Indian fruits through MSSL. "This JVwill help explore Indian markets and replicate best agronomy practices globally," said Hein Deprez, Executive Chairman, Univeg.The JV will focus on the modernization of the domestic fruit supplychain in order to responds to the demand for high quality produce, improveyield and lower wastage levels.