Mumbai, Apr 15 IBNS | 6 months ago

Mahindra ShubhLabh Services Ltd. (subsidiary of Mahindra and Mahindra Ltd.) part of the USD 16.7 billion Mahindra Group, has signed a joint venture agreement with UNIVEG, a Belgium based Euro 3.2 billion Fresh Produce company.


The joint venture, between Mahindra and the UNIVEG Group will have Mahindra ShubhLabh Services Ltd (MSSL) and UNIVEG holding 60 and 40 percent equity respectively in the company.

The JV will focus on developing fresh fruit supply chain to provide high quality fruits that meets the needs of both the domestic and international markets. Other than grapes, JV will focus on select key fruits.

Commenting on the joint venture, Pawan Goenka, Executive Director and President, Automotive & Farm Equipment Sectors, Mahindra & Mahindra said, "In line with our vision of delivering Farm Tech Prosperity, Mahindra ShubhLabh was set up to help farmers increase their productivity and enable them to obtain greater value for their produce. It is a matter of pride for us that we have today signed this JV with a global leader in fresh produce."

He added, "This JV will enable both companies to leverage each other's strengths thereby providing a win-win for farmers and end consumers alike. Going forward, we plan to strengthen our partnership by further improving the fresh produce supply chain through various interventions and investments across India."

Hein Deprez, Executive Chairman & Major Shareholder, UNIVEG Group said, "We consider this association the right mix of market presence and farmer connect. Mahindra's reach, together with our proven technical expertise across 6 continents and 32 distribution centers in Europe will be beneficial for all stakeholders."

The newly formed joint venture, will benefit from the global expertise of both companies wherein UNIVEG will provide technical knowhow 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 JV will further help farmers improve their productivity as well as price realization. Moreover, MSSL will assist in arranging contract farming agreements across India while leveraging its domestic marketing and distribution network as well as providing the required local licensing and support services.

The JV will also focus on the modernisation of the domestic fruit supply chain in order to respond to the demand for high quality produce, improve yield and lower wastage levels and build grower productivity thereby improving their returns.

It will focus on improving ripening, packaging, & storage processes to offer better fresh produce to the discerning Indian and Overseas consumers. Under the JV high quality fruits will be imported from across the world and position Indian fruits in the global markets by building efficient export oriented supply chains, for certain select fruits.

An efficient logistics and supply chain facility is imperative in the food value chain as major losses in fresh produce occur during the post-harvest period. As fruits and vegetables contain nearly 65 to 95 percent water they not only loose moisture by 10-15 percent but also face a substantial drop in quality and appearance in the absence of an appropriate cold chain and distribution network.

Setting up state of the art logistics and supply chain facilities by this JV in strategic locations across India will result in customers getting better quality fresh produce on time, the company claimed.

In November 2013, MSSL launched its fresh fruit brand, Saboro, for the health conscious Indian consumer offering a wide range of fresh fruit. Mahindra is the first Indian corporate to offer such a wide variety of branded fruit to the consumer. Fruits from this JV will also be marketed under the Saboro brand.

SMC Capitals Ltd was the Advisor to Mahindra ShubhLabh Services Ltd. (MSSL) for this transaction.

(Posted on 15-04-2014)

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