February 14, 2016

India’s $16.7 billion, diversified, Mahindra Group, announced it is restructuring and consolidating its agribusiness units into wholly-owned single entity. The move is designed to facilitate the group increasing its attention on pulse production, and to support its expansion into new segments including dairy products, processed foods, and juices, according to Live Mint.

“We have a clear vision that we cannot have many disjointed businesses. We should be able to consolidate once we cross the Rs.1,000 crore (US$146.2 million) mark in fiscal 2016,” Ashok Sharma, chief executive of the agri and allied business of M&M, said in an interview, reports Live Mint.

The company’s board of directors approved the transfer of its separate agribusinesses, which include seeds, pulses, edible oils, basmati rice, potato, potato flakes, dairy, its fresh fruits arm, Marhindra ShubhLabh Services Ltd., and its farm input business, Mahindra & Mahindra Ltd., under the single arm – Mahindra ShubhLabh Services Ltd. (MSSL). MSSL was originally established in 2003 for grape exportation, and has grown to become one of the country’s top fruit exporters, shipping to buyers in Europe, the Middle East, Russia, and Southeast Asia. The groups’ micro irrigation business, EPC Industries, however, will continue to operate as a direct subsidiary, according to the Economic Times.

Under the new consolidated unit, the group will have three brands – NuPro for pulses and edible oils, Saboro for fruits, and Samriddhi for agri inputs. The move is expected to provide the group the ability to create value and growth through taking maximum advantage of its agribusiness synergies.

"Our Agri Business has reached a critical mass now and this new entity would provide an opportunity to fully leverage the potential that these businesses offer and thus, function as an end-to-end provider in the agri value chain," M&M Executive Director Pawan Goenka told the Economic Times.