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Mahindra bets big on agriculture business

business Updated: Dec 17, 2013 00:28 IST
Nachiket Kelkar
Mahindra & Mahindra


India's largest tractor maker Mahindra & Mahindra (M&M) has big plans across the agriculture business value chain, from supplying nutrients and providing advice, to offering micro-irrigation systems and green houses, apart from selling branded fruits directly sourced from farmers.

The company, which launched Saboro branded apples in Hyderabad last month, is already supplying bananas in the Delhi market, although they are currently not being branded under Saboro. It will start selling Saboro grapes in Hyderabad from January, according to Ashok Sharma, M&M's chief executive of agriculture business.

"In India, the fruit market is close to Rs 2 lakh crore …We want to offer full end-to-end solutions - provide advisory services, inputs and mechanisation through our network of 150 Samriddhi centres; buyback produce and link to market," Sharma told HT.

Mahindra has so far invested Rs 120 crore in the agriculture business, which includes Rs 70 crore invested in EPC Industrie, the micro-irrigation company it acquired in 2011. It plans to also invest around Rs 200 crore in the agriculture business in next two years, according to Sharma.

EPC, which makes water sprinklers, drip irrigation systems and pumps, is expected to report Rs 200 crore revenue in the current financial year and Sharma is hopeful it will grow faster than the15% compounded growth that the Rs 3,500 crore micro-irrigation industry is projected to clock over the next five years.

Overall, by fiscal 2016, Mahindra has a target to achieve revenues of Rs 1,000 crore in the agriculture business, which will include the Saboro branded fruits business, and others like micro-irrigation products, supply of seeds, nutrients and green houses to farmers.

Mahindra has been working with grape growers in Maharashtra to source and export grapes. It now wants to export bananas, said Sharma. It will work with growers in Maharashtra and Gujarat to source bananas.

"India is the largest producer and consumer of bananas in the world, but exports are negligible. It's a Rs 30,000-crore industry," he said.