Mahindra & Mahindra's (M&M) fruits business – Mahindra ShubhLabh -- on Monday announced a 60:40 joint venture (JV) with Belgium-based Univeg for selling fresh fruits in India and international markets.
The new JV to be called as – Mahindra Univeg Pvt Ltd, will focus on fruits such as apples, bananas, citrus and kiwis. The JV is looking at a revenue of Rs 50-75 crore in the first year, out of which 60% will be from the domestic market and rest from exports.
According to the company, the JV will focus on developing fresh supply chain to provide quality fruits that meet the needs of the domestic and the international markets.
It said the JV 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 other practices to meet international standards.
Univeg, a 3.2 billion company, is a worldwide supplier of fruits, vegetables, flowers and fresh logistics and is active in 26 countries globally. The two companies will initially invest around Rs 30 crore in building supply chain capabilities.
Mahindra ShubhLabh, which is one of the few companies to sell branded fruits in India said the market for branded fruits is currently evolving. "Seven-eight years from now the market for branded, high quality fruits will be huge," said Pawan Goenka, executive director and president, automotive and farm equipment sectors for M&M.
Talking about the JV, Hein Deprez, executive chairman and major shareholder, Univeg Group, said, "With this JV, we will be present in 27 countries. Mahindra's reach, together with our technical expertise across six continents and 32 distribution centres in Europe will be beneficial for all stakeholders."
At present, the size of fresh fruits business is Rs 2 lakh crore a year, out of which only 5% is the organised market.
Recently, Tatas too entered the branded fruits business, with the launch of grapes under Rallis-Star Bazaar Grapes brand.