Through this JV, Mahindra ShubhLabh intends to enter Rs 35,000-40,000-crore per annum banana and apple market combined through its brand Soboro.
The established grape business of Mahindra ShubhLabh will be outside the purview of this joint venture. The JV unit intends to invest Rs 30 crore in the business in the next two to three years and intends to add another 500 to 600 farmers from whom they will source these fruits.
The company official said that more than the investment in the project, this JV intends to create infrastructure in place which will help farmers to improve their productivity by more than 50% and help them earn more, with the thumb rule of offering 35% of the final price to the farmer.
And create allied infrastructure of harvesting, ripening, and warehousing with third parties to bring down the overall price down.
Pawan Goenka, ED, Mahindra & Mahindra told ET, "Our vision is to enhance income of the farmers by increasing productivity and helping them earn greater value from the produce. This JV will further enhance us in delivering our goal."
Through this joint venture, M&M gains from high-tech supply chain expertise of Univeg, while the Belgian company gains access to India, which is the world's second largest fruit market, valued at Rs 2 lakh crore per annum.
Hein Deprez, executive chairman and major shareholder of 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 will be beneficial to both the parties." Ashok Sharma, chief executive, agri & allied business for M&M said, with the addition of two more fruits M&M see the business almost tripling to Rs 300 crore in the next two years.
"The first step is to build the supply chain for banana's and apples and alternatively import good quality fruits like the Kiwis, Citrus and Pears in India with the Univegs help and two years from now India could act as a major sourcing base for Univeg," said Sharma.
