Mahindra Agribusiness, a subsidiary of diversified firm Mahindra & Mahindra, is looking to acquire a dairy for up to Rs 500 crore (up to $81 million) in the ongoing financial year as a forward integration for its existing agri input business, The Economic Times reported quoting a top company executive.
The agribusiness division of the group may retain the acquired brand and will launch its own brand only if required, Ashok Sharma, chief executive of agri and allied business of the group, told the paper.
While India is a dominant global player in terms of both production and consumption of milk, it is dominated by the unorganised sector which leads to lot of wastage and lower proportion of value-added products. However, this is changing with the entry of many new-generation dairy firms and some old private firms getting the backing of private equity companies.
Mahindra Agribusiness has been looking at foraying into the dairy sector through inorganic way for long with focus on the pouched milk segment. It would become one of a few large business houses to get into the fast growing dairy market.
Agribusiness division of the group started operations in 2010 to provide integrated solutions to farmers. The division is engaged in agri input businesses like seeds and crop care. Its subsidiary Mahindra Shubhlabh is in the fresh fruit business while another subsidiary EPC Industry Limited offers drip, sprinkler, pumps and green house solutions.
In August this year, it had signed a 60:40 JV with Holland-based HZPC to provide seed potatoes to farmers domestically and outside India. Before that, it had also formed a 60:40 JV with Belgium-based fresh produce company UNIVEG to source fresh produce for domestic consumption and set up a supply chain facility for its distribution across India.
M&M, the listed flagship of the group, is known for automobiles but has a finger in various other businesses including aerospace, consulting services, defence, energy, financial services, industrial equipment, logistics, real estate, retail etc.
By Anuradha Verma (Edited by Joby Puthuparampil Johnson)
