Summary of Proposed Investment
Project Number
11230
Company Name
MAHINDRA AGRI SOLUTIONS LIMITED
Date SPI Disclosed
Apr 4, 2002
Country
India
Industry
Agribusiness and Forestry
Projected Board Date
May 29, 2002
Status
Completed
Sector
Other
Department
Regional Industry - MAS Asia & Pac
Environmental Category
B - Limited
Previous Events
Approved : Sep 12, 2002
Signed : Mar 27, 2003
Invested : Aug 18, 2003
Project Description
Each ASC system will consist of the hub ASC and a number of related kiosks (spokes). Each ASC will be able to provide farmers with: (i) appropriate inputs (seeds, fertilizers, chemicals); (ii) rental equipment; (iii) information (agronomic practices, market information); (iv) contractual farm-input-application and advisory services, and (v) access to crop finance from commercial banks all under a one-stop-shop concept. Each ASC will be staffed with qualified and suitably trained personnel who will transfer knowledge of good agricultural practices to farmers.
Developmental Impact:
The objective of MSSL’s business model is to improve farming profitability and sustainability by increasing agricultural yields, reducing production costs and chemical pest control dependency. Current less-than-optimal production in India is attributable to the failure to integrate quality agriculture inputs, scientific farming techniques, mechanization, and finance. Indian farmers often do not trust existing input distribution channels because of the prevalence of poor business practices and spurious products. The public extension system’s reach is limited and the contribution of the private sector is typically motivated by the sale of specific products. MSSL’s intention is to become an agent for change in Indian agriculture through an integrated approach that will provide unbiased solutions oriented to individual farmer success. Moreover, the project will benefit the health and well being of farmers and the environment by promoting integrated pest management (IPM) and non-chemical methods and informed management of chemical products.
Farmers will be able to access better and more appropriate and fair priced inputs, rental equipment, and extension services as well as assistance in marketing the crops through market information and brokerage services. Farmers will also have access to crop loans from commercial banks at reasonable interest rates enabling investment in modern agricultural techniques and migration to higher value crops. These benefits are likely to spread to non-participating farmers as they will observe the yield improvement and will consequently modify their own crop management techniques.
The project is also expected to generate a substantial number of new jobs in rural areas. The venture is expected to cover 180 districts in India creating jobs for rural residents in the areas of agricultural extension, retailing, logistics, and farm equipment operations. In almost all cases the local agricultural service center will employ staff and contractor from the vicinity of the project.
IFC''s role
IFC''s involvement in the project will assist the company to: (i) enhance its credibility for the expansion of the franchise and client base, (ii) help promote Integrated Pesticide Management plans to reduce the reliance on chemicals and use chemicals only when they are required; and (iii) gain from IFC knowledge/sources on global agri-trends and insights on successful agri-projects across the globe. In addition, IFC''s participation as an equity investor is expected to provide comfort to potential investors when the Company goes public in the future.
Developmental Impact:
The objective of MSSL’s business model is to improve farming profitability and sustainability by increasing agricultural yields, reducing production costs and chemical pest control dependency. Current less-than-optimal production in India is attributable to the failure to integrate quality agriculture inputs, scientific farming techniques, mechanization, and finance. Indian farmers often do not trust existing input distribution channels because of the prevalence of poor business practices and spurious products. The public extension system’s reach is limited and the contribution of the private sector is typically motivated by the sale of specific products. MSSL’s intention is to become an agent for change in Indian agriculture through an integrated approach that will provide unbiased solutions oriented to individual farmer success. Moreover, the project will benefit the health and well being of farmers and the environment by promoting integrated pest management (IPM) and non-chemical methods and informed management of chemical products.
Farmers will be able to access better and more appropriate and fair priced inputs, rental equipment, and extension services as well as assistance in marketing the crops through market information and brokerage services. Farmers will also have access to crop loans from commercial banks at reasonable interest rates enabling investment in modern agricultural techniques and migration to higher value crops. These benefits are likely to spread to non-participating farmers as they will observe the yield improvement and will consequently modify their own crop management techniques.
The project is also expected to generate a substantial number of new jobs in rural areas. The venture is expected to cover 180 districts in India creating jobs for rural residents in the areas of agricultural extension, retailing, logistics, and farm equipment operations. In almost all cases the local agricultural service center will employ staff and contractor from the vicinity of the project.
IFC''s role
IFC''s involvement in the project will assist the company to: (i) enhance its credibility for the expansion of the franchise and client base, (ii) help promote Integrated Pesticide Management plans to reduce the reliance on chemicals and use chemicals only when they are required; and (iii) gain from IFC knowledge/sources on global agri-trends and insights on successful agri-projects across the globe. In addition, IFC''s participation as an equity investor is expected to provide comfort to potential investors when the Company goes public in the future.
Sponsor / Cost / Location
Development Impact
Related ESRS/ERS
Contacts
For Inquiries About the Project, Contact
Mahindra ShubhLabh Services Limited
3rd Floor Mahindra Towers
Worli, Mumbai - 400 018
Phone: 022-389-6824
Fax: 022-389-6109
3rd Floor Mahindra Towers
Worli, Mumbai - 400 018
Phone: 022-389-6824
Fax: 022-389-6109