UK-based Total Produce Plc and Tata Chemicals Limited (TCL) have entered into an agreement to form a 50/50 joint venture company in India, which will distribute high quality farm produce to food retailers, supermarkets, and hypermarkets across the country. The objective of the JV is to create state-of-the-art distribution facilities for fresh fruit and vegetables across India by leveraging the individual strengths of both partners.
Total Produce is Europe’s largest fresh produce company. The group generates a turnover in excess of US $ 2.5 billion (€ 2 billion), has close to 3,900 employees and trades from more than 80 facilities throughout Europe.
TCL, which operates in the chemicals and agri space, has consolidated revenues in excess of US $ 1 billion (€ 0.78 billion) annually. The company also operates the rural agri service centres, branded as ‘Tata Kisan Sansar’ (TKS), which has established relationships with growers through the provision of farm inputs and advice. This experience will be used to channel the produce from source to the distribution facilities. TKS outlets numbering over 500 give the company a unique advantage of being close to the producer.
The JV intends to first establish facilities in two centres in the north and east of the country at a cost of Rs.260 million (US$5.7 million), both of which are strongly supported by the current TKS network. The company plans in due course, to expand this network across India.
Both parties view this as an opportunity to bridge the gap between producer and end consumer, which will significantly increase efficiencies, improve shelf-life and reduce product loss in the supply chain. This new venture will help Indian farmers to improve their incomes and develop the skills needed to raise the quality of Indian farm produce.
Homi Khusrokhan, managing director, Tata Chemicals Ltd, said, “The experience of our TKS network gained over the years coupled with expertise in agronomy, gives us a unique edge in this business. Total Produce brings with it a wealth of knowledge, experience and a proven track record of success in this sector. Together, we hope to take fruit and vegetable production and distribution in India to international standards and, at the same time, ensure improved incomes for farmers.”
Carl McCann, Chairman of Total Produce, added: “We believe India, with its fast growing economy and one of the world’s largest populations provides great potential to build a large and successful business. India is one of the largest producers of fresh produce in the world.”