M&M unit ties up with Belgium's Univeg for fresh fruit supply

15 April 2014

Mahindra &Mahindra's agriculture business unit Mahindra ShubhLabh Services on Monday signed a 60:40 joint venture agreement with Belgium-based fresh produce company Univeg to offer high quality fruits in the domestic as well as global markets.

The pact aims at increasing productivity, improving price realisation and setting up a high quality supply chain for fresh produce, M&M executive director and president, automotive and farm equipment sectors, Pawan Goenka told reporters in Mumbai.

"We consider this association has the right mix of market presence and farmer connect. Mahindra's reach, together with our proven technical expertise across six continents and 32 distribution centres in Europe will be beneficial for all stakeholders," Univeg group chairman and major shareholder Hein Deprez said.

The joint venture is looking for Rs50-75 crore in revenue over the next 3-5 years, and is targeting 1 lakh tonne of fruit supply, Mahindra's agriculture and allied businesses chief executive Ashok Sharma said.

"The joint venture will enable both companies to leverage each other's strengths thereby providing a win-win for farmers and end consumers alike," Goenka said.

Going forward, the two partners plan to strengthen the new business by further improving the fresh produce supply chain through various interventions and investments across the country, he said.

Goenka said the domestic fruits market currently stands at $30 billion, of which organised chains account for only around 5 per cent or $1.5 billion.

There is no branded fruit sold in the country as of now, and Saboro - the fresh fruit brand launched by Mahindra group last November - is the first branded fruits vendor. The joint venture will sell fruits under the Saboro brand.

Mahindra will invest Rs30 crore in the joint venture and focus on building the supply chain, Goenka said.

 The joint venture will focus on developing fresh fruits supply chain to provide high quality fruits that meet the needs of both the domestic and international markets and it will focus on select key fruits, Goenka said.

The new venture will benefit from the global expertise of both companies wherein UNIVEG will provide technical know-how and best practices in quality control, post-harvest handling of fresh produce, ripening process, and farm agronomy practices and procedures to meet international quality standards.

 The joint venture  will further help farmers improve their productivity as well as price realisation. Moreover, Mahindra ShubhLabh will assist in arranging contract farming agreements across India while leveraging its domestic marketing and distribution network and providing the required local licensing and support services.

Mahindra ShubhLabh Services was set up in 2000 in order to serve M&M's extensive rural base of farm equipment customers. ShubhLabh provides farmers with a single source channel to access all the products, services, and knowledge they need to run productive farms. It assists farmers = from planting to selling with seed supply, crop care, and fresh produce distribution services.

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