M&M subsidiary forms JV with Sumitomo Corporation for Crop Care Business

M&M will hold 60% stake, while Sumitomo will hold 40% stake in the JV named Mahindra Summit Agriscience Limited.

Oct 12, 2018 07:10 IST India Infoline News Service

India’s business conglomerate Mahindra and Mahindra Limited (M&M), announced that its subsidiary has set up a joint venture (JV) with Sumitomo Corporation (Sumitomo) of Japan for the crop care business. M&M will invest in the JV through its subsidiary, Mahindra Agri Solutions Limited (MASL), owning 60% stake, while Somitomo will own 40% stake.

As per a press release from M&M, the partnership will offer a pipeline of specialty, new generation products with unique and latest molecules to effectively manage pest- and insect-related challenges faced by farmers.

The JV will benefit from the expertise of both the companies – M&M’s strong rural presence as well as Sumitomo’s unique know-how and Japanese technology. M&M has a strong farmer connect, widespread domestic distribution and agricultural expertise, while Sumitomo has strong ties with large Japanese crop protection innovator companies which will result in the JV having access to latest global technology for minimizing crop damage and increasing yield.

Today, India loses ~40% of its total production in terms of value to pest attacks and diseases. Because the per capita land availability in India will only go down, farmers will have to raise their agricultural production by improving productivity. Hence, crop protection products are an important input for facilitating pre- & post-harvest management. The current estimated consumption of crop protection products in terms of value is ~$2.5bn and is expected to grow at 7% annually for the next few years. With such a huge market potential and few organized players in this space, this JV has significant potential to revolutionize the crop protection business in India.

Mahindra & Mahindra Ltd is currently trading at Rs771.35 up by Rs41.15 or 5.64% from its previous closing of Rs730.20 on the BSE. The scrip opened at Rs739.90 and has touched a high and low of Rs775.55 and Rs737.95 respectively. So far 31,50,713 (NSE+BSE) shares were traded on the counter. The current market cap of the company is Rs90,777.92cr.

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