Mahindra Group plans to consolidate all its agri-business units

The $16.7 billion Mahindra Group plans to consolidate all its agri-business units into a single entity, sharpen its focus on pulses and diversify into newer businesses like dairy products, fruit juices and processed foods. The agri business comprises EPC Industrie Ltd, its listed micro irrigation company; fresh fruits arm Mahindra ShubhLabh Services Ltd; and a part of the farm input business of Mahindra and Mahindra Ltd.

“We have a clear vision that we cannot have many disjointed businesses. We should be able to consolidate once we cross the Rs.1,000 crore mark in fiscal 2016,” Ashok Sharma, chief executive of the agri and allied business of M&M, said last week.

In fiscal 2014, the group’s agri business units generated about Rs.430 crore in revenue. In November, Mahindra ShubhLabh, already the country’s largest exporter of grapes, also launched branded fresh fruits like imported apples, bananas and grapes under the brand name Saboro.

In recent months Mahindra ShubhLabh Services Ltd. has entered into a couple of joint ventures with big players in the fresh produce industry. Firstly back in mid April they announced a joint venture with UNIVEG one of the world's biggest fruit and vegetable companies, then just over a week later they announced an exclusive strategic alliance with HZPC BV a global leader in seed potatoes.

"UNIVEG sought primarily to break into the Asian market where imports have been rising in recent years, whereas markets in Northern Europe and the Americas have remained the same," explained Vikram Puti from Mahindra. "We have been exporting growing volumes of grapes in last decade to Europe and the relationship between the two companies has been steadily growing. UNIVEG liked the way we worked, reaching out to our growers to ensure compliance of residue standards, packout standards and sustainability."

UNIVEG invested in global sourcing across the Americas and Africa and are looking at sending some good volumes of apples, kiwi, pears and citrus across India. To begin with we are looking at a phase one plan starting with some volume of imports, UNIVEG has experience in bananas and apple and we will use that knowledge to develop our domestic supply in terms of quality practises and technology and technical know-how and capacity building for our people and also post harvest support."

HZCP operate in around 100 counties around the world and with India having the third largest population in the world it is an interesting prospect. Potatoes are a very important commodity there and with a 42m tonnes closed market with no imports the only way to enter the market is to produce in the country itself The two companies have a had a strategic alliance for last 6 years and according to Vikram Puti now is the time strengthen relationship with them and Mahindra will produce some of their varieties.

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