Mumbai: Coca-Cola India and Jain Irrigation will invest $2 million in a project to boost mango yields by enabling Indian farmers with advanced technology, as India’s fruit beverage industry is seen growing over 20% annually.
Under the project, ‘Unnati’, the companies will spend the money teaching farmers Ultra High Density Plantation practice, which, companies claim, doubles mango yields.
“This project not just makes good social sense but also makes great business sense.... we are in a way insuring ourselves towards the continuous supply of mango pulp,” said Atul Singh, president and chief executive officer, Coca-Cola India and South-West Asia.
India is the world’s biggest producer of mangos.
Farmers learning the new technology will not have an obligation to sell their produce to the companies, said Atul Jain, joint managing director, Jain Irrigation Systems. “They can sell wherever they will get better price.”
Coca-Cola India, the Indian arm of the world’s largest soft drink maker, Coca-Cola Co, currently secures bulk of its mango pulp requirement from Jain Irrigation.
Coca Cola buys about 60,000 tonnes mango pulp per year for its brands like ‘Maaza.’
In India, fruit beverage sales have been rising over 20% annually and it makes sense for the company to invest in a growing segment, Asim Parekh, vice-president, technical, Coca-Cola India said.
The project will start from southern Andhra Pradesh, a key producer of Totapuri variety of mango, with 200 demo farms.
“Currently we are supplying nearly 60% of our mango pulp production to Coca Cola and remaining output we are exporting. Coca-Cola’s demand is rising every year. We are trying to boost processing capacity,” said Sunil Deshpande, executive vice-president, Jain Irrigation.
Jain Irrigation sees its mango pulp business growing 25-30% year-on-year on strong demand from overseas and its strategic buyer Coca Cola, Deshpande added.
The micro-irrigation maker also said it is waiting for the “right time” to launch its qualified institutional placement. It currently has an enabling resolution to raise $150 million, Jain said.
He also said the company’s plans to launch a non-banking financial company is on track and is awaiting approval from the Reserve Bank of India.
Shares of Jain Irrigation ended down 1.18% at Rs172.1 in a firm Mumbai market on Wednesday.