India: Mahindra expands through joint ventures

Recently the Belgian Univeg Group and the Dutch seed merchant PZPC set up joint ventures with Indian multinational Mahindra. Mahindra operates in many industries across the globe. But because the Indian giant works primarily through joint ventures and subsidiaries, the Mahindra Group is a relatively unknown player in the world economy.

Mahindra operates in ten sectors, the automotive industry being by far the largest. Since 2000 however, through its subsidiary Mahindra ShubhLabh Services, the company has set foot in the fruit and vegetable trade. Mahindra ShubhLabh supports growers in all areas. For example, the company provides seedlings and crop protection products, and represents several growing companies on markets.

History of the Mahindra Group
The basis of Mahindra was laid in 1945, when brothers JC Mahindra and K. C. Mahindra, along with Ghulam Muhammad, started a steel company. After Indian independence, two years after its creation, Muhammad became the country’s first finance minister. The brothers continued with the company and shifted their focus to the automotive industry. From the very beginning, the brothers had a vision for the development of India. They pioneered with several international collaborations in steel, tractors and telecom.

Through agreements and collaboration with international companies, Mahindra was able to grow. Joint ventures were an attractive form of cooperation for many decades, because direct investment weren’t allowed until the 1990s. Collaborating with Indian companies was the easiest way to get a foothold in India. Mahindra's activities extended to more and more sectors. In 1994, the company was reorganized and activities were divided into six parts.

Joint ventures
In late April, Mahindra and HZPC signed an agreement to establish the joint venture. The Indian Multinational get sixty percent of the shares, the rest is for HZPC. Aim of the collaboration is to improve the quality of seed potatoes in India. Back in 2005, Mahindra entered the seed market to increase quality of seed potatoes in the Indian state of Punjab. Local varieties and nineteen new varieties of HZPC are to be included in the range of the new endeavour.

Earlier in April, Mahindra signed a similar agreement with Belgian Univeg. Again, the Indian company receives sixty percent of the shares. The new company focuses on the development of the supply chain of fruits and vegetables. The focus is on the fruit trade, with the exception of grapes.

Univeg provides significant technical knowledge, like maturation processes, quality control and processing of products after harvest. Mahindra offers support in obtaining permits and contract farming agreements.

Generally, Mahindra seems to grow thanks to its joint ventures with other companies. The Indian giant is well-represented in the automotive industry and is also able to strengthen its position in the fresh produce sector. Due to the large number of subsidiaries, the influence of the company is difficult to determine.