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Mitsui & Co., Ltd. ("Mitsui", Head Office: Tokyo, President & CEO: Masami Iijima) entered with Yanmar Co., Ltd. ("Yanmar", Head Office: Kita-ku, Osaka, President: Takehito Yamaoka) and Coromandel International Limited ("CIL"), which is a member of the Murugappa Group, a mid-tier conglomerate in India, into joint venture agreement on April 25, 2014 to establish Yanmar Coromandel Agrisolutions Pvt. Ltd. ("YCA", provisional name) to manufacture, distribute and provide aftersales service of rice farming machinery in India. Mitsui will acquire a 20% shareholding in YCA through Mitsui & Co. (Asia Pacific) Pte. Ltd.
With around 60% of its total population employed in agriculture, India is a major farming nation and is ranked largest in the world in terms of the area used for paddy cultivation. However, the trend toward urbanization is causing a gradual decline in the agricultural population as more and more small farmers leave the land. At the same time, the expansion of food production has become an increasingly urgent priority as India's population grows. Rice cultivation is a labor-intensive activity, and it will be necessary to achieve sustained production growth by using machinery to offset labor shortages.
The Murugappa Group is a mid-tier conglomerate involved in such areas as fertilizers, agricultural chemicals and sugar production. CIL is the Group's flagship company and accounts for approximately 38% of its sales. Its business activities focus mainly on agricultural regions in Southern India. Yanmar's Indian subsidiary is involved mainly in the importation and distribution of farm machinery manufactured in Japan and China.
Mitsui has strengthened its relationship with the Murugappa Group and CIL through transactions in fertilizers and agricultural chemicals. This relationship has now resulted in the establishment of YCA in partnership with Yanmar to manufacture, distribute and provide aftersales service of rice production machinery. Mitsui aims to strengthen the three-company partnership through this business, by working to expand sales of rice transplanters and combined harvesters manufactured by Yanmar and YCA, while also contributing to the mechanization of agriculture in India.
|Name of Company||Coromandel International Limited|
|Head Office||Hyderabad, India|
|Representative||Mr. Kapil Mehan, Managing Director|
|Capital relationships||Listed on the National Stock Exchange of India and the Bombay Stock Exchange|
|Business activities||Manufacture and distribution of fertilizers and agricultural chemicals, retail marketing of farm inputs and implements and providing farm mechanization services|
|Name of Company||Yanmar Coromandel Agrisolutions Private Limited|
|Head Office||Southern India (to be decided)|
|Establishment||June, 2014 (scheduled)|
|Representative||To be decided|
|Shareholders||Yanmar Asia (Singapore) Corporation Pte. Ltd.: 40%
Mitsui & Co. (Asia Pacific) Pte. Ltd.: 20%
|Equity||Rs 400mil (Approx. ¥670mil.)|
|Business activities||Manufacture, agri-solutions, distribution and aftersales service of rice transplanters and combined harvesters in India|
This announcement contains forward-looking statements. These forward-looking statements are based on Mitsui's current assumptions, expectations and beliefs in light of the information currently possessed by it and involve known and unknown risks, uncertainties and other factors. Such risks, uncertainties and other factors may cause Mitsui's actual results, financial position or cash flows to be materially different from any future results, financial position or cash flows expressed or implied by these forward-looking statements. These risks, uncertainties and other factors referred to above include, but are not limited to, those contained in Mitsui's latest Annual Securities Report and Quarterly Securities Report, and Mitsui undertakes no obligation to publicly update or revise any forward-looking statements.
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