New Delhi : Auto major Mahindra & Mahindra has decided to separate the agri business of its subsidiary Mahindra Shubhlabh Services and merge it into itself.

Mahindra Shubhlabh Services Ltd (MSSL) has been into various aspects of agriculture such as seeds, fertilisers, chemicals and farm finance among others, while also focusing into exports of fresh fruits. The move to separate the agri business is a part of MSSL's strategy to focus more on the fresh fruits exports business.

"In view of the agri inputs business being a high gestation business, MSSL now intends to streamline its operations and wants to focus only on the fruits business and explore strategic options to grow this business domestically and globally in terms of scale and profitability," M&M said.

The fruit business is currently focused on exports of grapes to Europe and MSSL plans to expand it into other fruits businesses. M&M, which is the country's largest utility vehicle maker, said that MSSL's agri input business such as seeds, seed potato and crop care products, is strategically an important business for the auto major.

"... it directly relates with the farmer and farm tech prosperity, essential for improving customer bonding, customer loyalty and market penetration of your company (M&M)," it added.

"... going forward, the agri inputs business would be demerged into your company (M&M) owing to its strategic importance and funding resources required for the same," the company said in its Annual Report for 2009-10.

The auto major had announced a demerger scheme in March this year between the shareholders of MSSL and M&M.