Murugappa Group company Coromandel International has entered into a joint venture with Japanese companies, Yanmar & Co and Mitsui Trading, for manufacturing and marketing farm machinery.
Coromandel and Yanmar will hold 40 per cent each and Mitsui 20 per cent in the joint venture, which will initially manufacture the Yanmar brand of mini-harvesters, planters and rotavators for paddy cultivation, A Vellayan, executive chairman of the Murugappa Group, said.
The joint venture will later expand its range to include equipment for other crops, including sugarcane and vegetables, Vellayan added.
Coromandel International Limited, a leading manufacturer of a wide range of fertilizers, crop protection products and specialty nutrient products, currently offers farm mechanisation services on a limited scale to farmers in Andhra Pradesh through its Mana Gromor Retail network and these services currently focus on paddy transplantation.
In addition, the company also sells sprayers and drip irrigation equipment through its retail outlets.
The joint venture will enable Coromandel to commercialise and further scale up its farm mechanisation services and thereby help improve overall productivity of Indian farms, the company stated in a release.
The joint venture will leverage the farm mechanisation technology leadership position of Yanmar and Murugappa Group engineering firm Coromandel Engineering Company Ltd and Coromandel's knowledge of farming practices and its connect with farmers to develop equipment tailored to Indian farm requirements.
Initially, the JV will sell imported machinery and, over time, increase the level of indigenisation by manufacturing various components in order to reduce costs and customise the products for Indian conditions.
The machinery will target small farmers, a segment in which Japanese manufacturer Yanmar has a strong presence. The equipment will be sold and leased to farmers through Coromandel International's Gromor chain of rural market outlets.
Farm mechanisation and the nutraceuticals business are the group's key focus areas for the current year.
The Murugappa Group's business spans fertilisers, sugar, manufacturing and financial services, which together account for annual sales of nearly Rs25,000 crore.
The nutraceuticals business, which is based on Spirulina, an alga, and the antioxidant Astaxanthin, is expected to grow many-fold this year, according to Vellayan.
Fertiliser manufacturer Coromandel International has secured raw material supplies through its overseas joint venture in Tunisia – TIFERT, which has started shipping phosphoric acid to India. The company had sales of about Rs10,000 crore.
EID-Parry's sugar business will also get a fillip with the SEZ refinery in Kakinada, Andhra Pradesh, starting operations this month.
Tube Investments of India's Rs400-crore project to manufacture large-diameter tubes catering to hydraulic, oil and gas and automobile industries will commence production next month. The company has major expansion plans in tubes, chains and cycles, he said.
Vellayan said the group expects sustained increase in liquidity and overall improvement in consumer sentiment driving growth. It hopes to finalise long-term plans in a couple of months, once the new government at the centre announces its policies and programmes.