India’s largest tractor manufacturer Mahindra & Mahindra (M&M) today signed a technical license agreement with Mitsubishi Agriculture Machinery Company, Japan, for transfer of agricultural machinery technology.
The agriculture machinery technology is being licensed to M&M Farm Equipment Sectors’ (FES) Applitrac business for manufacturing Mitsubishi’s products in India. These machinery will be sold under the Mahindra brand name in India as well as in export markets like China and the Saarc countries.
To start with, M&M will produce the rice transplant machine, priced at Rs 1.75 lakh from its plant in Nagpur. The company is making an investment of Rs 15 crore towards the venture and intends to sell 1,000 units of the machine this year, while the target is expected to go up to 5,000 units per year in the next two to three years.
These machines reduce man-hours while improving costs savings. According to estimates, the rice transplantor can save 30 per cent of costs while employing only three persons against 10-12 persons under manual conditions.
Mitsubishi also partners M&M is the US where it makes compact tractors for the Indian company and sells them under the M&M brand name.
The Applitrac business where M&M sells all products other than tractors, such as harvesters and other machinery, currently contributes Rs 100 crore to M&M’s FES revenue. This is expected to grow to Rs 500-600 crore in the next five years, according to Anjanikumar Choudhari, president-M&M FES.
Further, both companies are also exploring collaboration in the area of tractors. Mitsubishi has expertise in making compact and low-power tractors, whereas Mahindra makes bigger and high-capacity tractor.
“We have a long-term relationship with Mitsubishi. We are discussing a variety of subjects for transfer of technology and design. India is a large market and there can be ways for further collaboration with Mitsubishi”, said Choudhari.