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Coromandel Forms JV With Japanese Firms

30 April 2014

INDIA - Crop protection products manufacturer, Coromandel International Limited (CIL) part of $22 billion Murugappa Group has entered into an agreement with Japanese firm Yanmar Co Ltd and Mitsui & Co (Asia Pacific) Pte Ltd to form a joint venture for manufacturing and marketing of Yanmar branded rice transplanters and harvesters, writes Jagdish Kumar.

Under the joint venture agreement, the company will be setting up of manufacturing facility initially for manufacture of rice transplanter and harvesters with an investment of $6.60 million.

“With the current market pegged at around $2 million to $3 million, we expected the market to grow five to six time in the next 1-2 years,” Sreenivasa Rao Behara, Coromandel International Limited official told Jagdish Kumar on 28 April.

“Our focus area is Southern India, as we have our presence in Andhra Pradesh and Karnataka states, where our services mainly focuse on paddy transplantation. However after some time, pan India can be targeted,” Behara added.

Where the manufacturing facility will come up is yet to be finalised, he said.

Commenting on the JV, CIL managing director Kapil Mehan said: "The development of cost competitive agriculture manufacturing capability will allow Coromandel to further scale up its farm mechanization services (FMS) through its retail outlets."

Initially, the JV will sell imported machinery and will, over time, increase the level of indigenization by manufacturing various components in order to reduce costs and customize the products for Indian conditions.

''This strategic partnership with Yanmar will prove to be a game changer which will provide a scalable solution to improve farm productivity. We look forward to a long and fruitful relationship with our partners,” Chairman of the Murugappa Group, A. Vellayan, said in a statement.

The JV agreement further provides that it can engage in sales and after-sales services of other Yanmar brand machinery as may be mutually agreed between the parties.
CIL will hold 40 per cent stake, while Yanmar will hold 40 per cent and 20 per cent will be owned by Mitsui will focus on the manufacturing and marketing of these farm mechanization equipment.


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