Mahindra Agribusiness is keen to enter the over Rs 3-trillion Indian dairy sector through a Rs 150-Rs 750 crore acquisition of a brand that has good supply chain and branding in place.
Money is not a problem when it comes to a good dairy brand. We can invest anything between Rs 150 crore and Rs 750 crore. But we are particular about the brand name and the supply chain, a senior official of the Mahindra Group firm, who wished not to be named, told PTI on the sidelines of a CII- organised SME summit here today.
More than 80 per cent of the over Rs 3-trillion dairy sector is in the unorganised space and this offers a huge opportunity for the company that is the largest farm equipment maker in the world by volume.
Asked what would be the focus of the company - premium milk or a mass brand - he said entering the high-end space makes better business sense.
About the rationale for the diversified Group to enter the milk business, the official said being the largest farm equipment player and also a leading entity in the agri segment, foraying into the dairy sector would only complement its business cycle.
Mahindra ShubhLabh Services, a Group entity, has emerged as the largest grapes exporter by working directly with farmers. It undertakes contract farming of grapes in Maharashtra and provides farmers with technical support.
Dairy can supplement farmer incomes in tough times and act as a hedge against climate risks, he said, adding the company wants to replicate the supply chain success in grapes collection in the milk segment too.
