INDIA BUSINESS WORLD - APRIL 16th - MAY 10th - 2008
MAHINDRA & MAHINDRA IN JV WITH CAPESPAN TO DRIVE RETAIL DEAL
Stepping on the gas to drive its retail ambitions, the Mahindra & Mahindra Group has inked a 50:50 JV with a South African international supply-chain heavyweight, Capespan, through its agribusiness initiative, Mahindra Shubh-Laabh Services (MSSL). While Capespan, which markets world famous brands such as Cape, Outspan and Bella Nova, gets an easy entry into the Indian market, the deal will provide MSSL with sourcing, packaging and logistic expertise.
MSSL is already a supplier of fresh produce to global retailers such as Carrefour, Tesco, Albert Heijn, Sainsbury’s and may consider a cash-and-carry JV with one of the players, sources said. It currently supplies fresh produce to retailers like Subhiksha, Reliance and others in the domestic market.
“The JV will begin as a one-year pilot activity and will also develop product-based supply chains and customer linkages by understanding the needs and the nuances of local and inter-geography supply. We are currently working on the business plan,” said MSSL CEO Vikram Puri. Capespan is one of the top five global majors in supply-chain and the largest exporter of fresh produce in the European markets.
Sources said while M&M is currently strengthening its position as a strong supply-chain player, there are plans for the front-end too. “The final decision will be taken by Anand Mahindra. There have been some initial discussions though nothing is final on that front,” a group official said.
MSSL is positioning itself as a backend supply-chain partner for organised retail and is exploring growth opportunities in the fresh produce, both for the domestic and international markets.
The company has signed an MoU with Capespan Pty for domestic modern retail for fresh produce, including fruit and vegetables, said Mr Puri. The MoU is a progressive step that started approximately four years ago with the export of grapes, which today has achieved leadership position in EU at 280 containers.
The pilot plan was drawn after a threemonth long study in the domestic Indian fresh produce business, which included wholesale markets, statutory regulations, licensing and compliance issues and study of organised retailer needs, requirements, plans for fresh fruit and vegetables.
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