Mahindra ShubhLabh Services (MSSL), the agribusiness division of Indian congolomerate Mahindra Group, has signed a highly significant joint venture agreement with Belgium-based multinational fresh produce company Univeg aimed at developing and improving the supply of homegrown and imported fruit and vegetables to the Indian market.
Announcing the deal at a special signing ceremony in Mumbai, senior directors from both companies said the venture planned to tap into 'massive opportunities' offered by the Indian market by sourcing high-quality, premium fresh produce for domestic consumption and setting up a modern, efficient supply chain to distribute it via strategic locations across the country.
Univeg, which has a 40 per cent shareholding in the new company, will provide technical knowhow and expertise of best practice and international standards in areas such as quality control, post-harvest handling, ripening and farm agronomy.
MSSL, with a majority 60 per cent stake, will make its national distribution network available and market the venture's products under Saboro, the brand it launched in November 2013 to promote a wide range of fresh fruit including key imported items to health-conscious Indian consumers.
It will also assist in arranging contract farming agreements across India, while providing the required local licensing and support services.
Focusing initially on locally grown fruit such as bananas, the as-yet-unnamed venture will set out to improve yields and cut waste in order to improve returns to growers and meet consumer demand for higher-quality products.
Improvement in terms of the cold chain as well as added-value activities like ripening and packing will be important ingredients in the project's success, the directors noted.
Increasing demand for imported fruit, especially in India's major urban areas, is also expected to offer new opportunities for the partners, as is the potential future expansion of India's fresh produce export business.
Mutual benefit
Commenting on the joint venture, Mahindra Group's executive director and president for the automotive and farm equipment sectors, Pawan Goenka, said the deal was part of a wider effort 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 commented. 'It 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, Univeg's executive chairman and majority shareholder, said the venture would be mutually beneficial for the companies.
'We consider this association the right mix of market presence and farmer connect,' he explained. 'Mahindra's reach, together with our proven technical expertise across six continents and 32 distribution centres in Europe, will be beneficial for all stakeholders.'
Also present at the signing ceremony were Francis Kint, chief executive of Univeg's fresh produce division; Ashok Sharma, head of agri and allied business at Mahindra Group; and MSSL chief executive Vikram Puri.
