Euro Fruits forms JV with European firm

After the entry of high-profile retailers in fresh fruits and vegetable space, now it is the turn of lesser-known firms to exploit the huge opportunity beckoning them.

After supplying table grapes to European supermarkets, Mumbai-based fresh-produce company Euro Fruits now plans to set up a 50:50 joint venture with one of the largest European retailer to supply fruits and vegetables to country's leading retailers.

The JV will have one of the country's largest distribution centres near Thane which will process and supply nearly 250 tonne of fruits per day. The JV will process vegetables in the second phase. The centre will be set up with an investment of Rs 11 to 12 crore, complete with laboratories, cold storage, warehousing et al. The proposed centre is expected to come up by June 2007.

Euro Fruits has already completed the legal formalities and the European company officials are expected to visit Euro Fruits in January to give final touches to the JV.

Euro Fruits Managing Director Nitin Agrawal said the JV will focus on yellow-bananas and the entity will only cater to domestic market. Talks are already underway with retail giants like Reliance, Bharti, Subhiksha etc., he added.

"With the JV, we plan to establish a well-organised and efficient supply chain, cold storage and quality fresh produce procurement in the country. The new distribution centre will meet all the international standards," Nitin Agrawal said and added that the JV, with Euro Fruits' association with 150 Euregap-certified farmers and the Euroepan JV partner's global experience will change the procurement, processing, packaging and supply landscape in the country.

The distribution centre may even process fruits including apples, grapes, oranges, pears imported from Chile, South Africa, Italy, Australia and US and Euro Fruits' facility in Sangli and Nasik, Agrawal said.

"We were waiting for the entry of Reliance, Bharti, Walmart, Subhiksha etc. in the fresh produce space. We are thrilled and excited about the huge untapped potential," he says.

The Eurepgap (European Retail Parties Goof Agriculture Practice) and BRC (British Retail Consortium)-certified Euro Fruits supplies fresh produce, especially grapes to 90 per cent of European supermarkets under its own brandnames.

Many European retailers have approached Euro Fruits for co-branding and they will decide on it soon, Agrawal said.

Euro Fruits already has a JV with a Dutch firm, set up in 2002, to cater to European supermarkets.

Euro Fruits, with Rs 35 crore annual turnover, has four facilities including three in Sangli and one in Nasik. Its new facility in Sangli has been declared as 'The best facility in India' by Holland's Foodcert agency.