Tatas-Total Produce JV to bring goods from Khetse
The Economic Times — November 27, 2007

Tata Chemicals (TCL) is planning a major foray into the wholesale business of fruits and vegetables in India through its joint venture with Ireland's Total Produce. The 50:50 JV company, Khetse Agriproduce India, will invest almost Rs 750 crore for setting up 50 cash-and-carry distribution centres, according to Homi R Khusrokhan, managing director of Tata Chemicals.

The first distribution centre will be opened at Ludhiana in Punjab in April 2008, which will be followed by another centre in Navi Mumbai. The JV company, formed for the Indian market, may consider exporting the surplus fruits and vegetable produced in India.

"Khetse will set up 50 wholesale distribution centres of same format across the country by 2012. Each distribution centres will entail an investment of Rs 15 crore," said Mr Khusrokhan, adding that the joint venture would not enter into the retail business. The company will collect fresh fruits and vegetables directly from farmers by paying market price and distribute through Khetse centres. The new venture will have the strong support of the current Tata Kisan Sansar (TKS) network. Over the years Tata Chemicals built the network of agri service centres, branded as TKS, which gives farm inputs and advice to farmers. The Rs 400-crore TKS has 600 outlets across the country.

"At present, our focus is Indian market. If the company gets excess of fruits and vegetables, we will consider exporting the produce to the neighbouring countries. The farmers are happy to sell their produce to us after seeing the success of TKS. In fact, the farmers will get handsome price for their produce as there is no intermediary in the buying," said Mr Khusrokhan.

The $2.5 billion Total Produce and Tata Chemicals are planning to bridge the gap between producer and end-consumer for increasing the accessibility of fresh farm products at low price.

"Total Produce will chip in the venture with its knowledge, experience and a proven track record in the sector. The new and exciting venture will take the fruit and vegetable production and distribution in India to international standards. At the same time it offers good earnings to the farmers also," said Mr Khusrokhan.