2000, some of India’s well known companies like Mahindra & Mahindra, Tata Chemicals, Rallis India (a seed manufacturing company) and Nagarjuna Fertilizers took up agri businss ventures by setting up their own business models. However, most of them had to face problems due to lack of growth. Tata Chemicals, Mahindra & Mahindra and Rallis used the concept of a one stop shop for agri products like seeds, fertilizers and extension services for farmers. The Shubh Labh venture started by Mahindras had set up 36 centres in 10 states by the end of 2002. However, the company posted huge losses in 2001-02. Tata Kisan Kentra (TKK) launched by Tata Chemicals had also reportedly faced problems getting the required revenue streams to sustain the investment. Even ikisan.com (Nagarjuna Fertilizers), which tried to create an e-market place, could not scale up.
Mahindra & Mahindra (M&M) is now selling more Scorpios in rural and semi-urban markets. Scorpio sales have increased from 35 per cent to 50 per cent in the last two years.
Like the Tatas, the $2.6 billion Mahindra group has successfully established a synergy between its current businesses and the planned rural forays. Its agship, Mahindra & Mahindra Ltd is India's largest farm equipment company. Its subsidiary, Mahindra Shubhlabh Services, has operations in 11 states, and leverages the strong Mahindra brand, the 700,000-strong Mahindra tractor customer base and the 400-plus dealer network, to provide a complete range of products and services to improve farm productivity and establish market linkages to the commodity market chain. Its retailing arm, Mahindra Krishi Vihar, has been instrumental in increasing the groundnut yield in Rajasthan through a new seed sourced from the state of Maharashtra, and it has also introduced a new variety of grapes in Maharashtra. Says Vikram Puri, head of Mahindra Shubhlabh Services, Almost 80 per cent of the farmers registered with us have less than _ve acres land. We are making...
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