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Mahindra forms 60:40 seed potato JV with Dutch agri firm HZPC

24 April, 2014

Mahindra group has inked its second partnership with a foreign player in the agri space in less than 10 days with the agri division of flagship company Mahindra & Mahindra Ltd (M&M) signing a joint venture (JV) agreement with Holland-based HZPC to offer potato seeds to farmers within and outside India, as per a stock market disclosure.

In the JV, M&M will hold 60 per cent stake and the rest 40 per cent will be held by HZPC.

The new JV company will construct a facility to produce tissue culture plants and mini-tubers to offer early generation seed potatoes to farmers. HZPC with its R&D focus will bring in access to latest technology, new varieties and open up global markets for the Indian farmers, and M&M will contribute through its farmer connect, widespread domestic distribution and agronomy expertise in this JV.

“We feel confident that this JV will help us export avenues for them. HZPC is a farmers’ company with its majority equity held by farmers. We have already sent 19 latest varieties from Europe for testing in India and are sure that some of them will go a long way in enhancing farmer productivity in the country,” said Gerard Backx, CEO of HZPC.

HZPC, one of the leading potato breeding, seed potato growing and trading company, has a turnover of around €300 million. The firm has over 230 employees, 800 growers, 55 breeders and foreign branch offices.

“To further grow this business, we will require special technology and will also need to put in some investments in the supply chain,” said Ashok Sharma, chief executive, agri & allied businesses, M&M.

“Not only will this help in our quest for delivering farmer prosperity through agronomy and better technology but will also open up global markets, thus providing our farmers with better returns,” Sharma added.

The total potato market in India is pegged at around 43 million tonnes of which a little less than 10 per cent is used as seeds by the farmers. Of this just 0.25 million tonnes or just around 5 per cent are in the organised segment. The organised segment of the seed potato market is expected to grow at 15-17 per cent a year against expected growth of around 6 per cent for the overall market.

Having started its seed potato business in 2005 to help farmers in Punjab, M&M currently works with 600 seed potato growers. It supplies mini-tubers to farmers which are produced at its facility in Palampur (HP).

The seeds are brought back from the farmers at a minimum guaranteed price and are further distributed to potato growers in UP, Madhya Pradesh, Gujarat, Maharashtra and West Bengal states.

Early this month, Mahindra ShubhLabh Services, another agri subsidiary of the $16.7 billion Mahindra Group, signed a joint venture agreement with UNIVEG, a Belgium-based €3.2 billion fresh produce company. In this JV too, Mahindra arm will own majority stake in a 60:40 equity venture, which will source fresh produce for domestic consumption and set up a supply chain facility for its distribution across India.

(Edited by Joby Puthuparampil Johnson)


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Mahindra forms 60:40 seed potato JV with Dutch agri firm HZPC

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