Renault Agri to source tractors from ITL

The French tractor maker, Renault Agriculture, will soon start sourcing high-powered tractors from the Punjab-based International Tractors Ltd (ITL), for sale in overseas markets.

The tractors will be powered by 70-120 horse power engines and branded as Renault-Ceris. ITL chairman LD Mittal told Business Standard, "We will manufacture the tractors as per the design specifications of Renault. They will start outsourcing in the next three to four months." He said that high quality with low-cost of production has made Renault decide in favour of sourcing the tractors from ITL.

This would be the first sourcing arrangement by Renault after it acquired a 20 per cent stake in ITL in 2000. Renault Agriculture is a wholly-owned subsidiary of the French automaker Renault.

ITL, the flagship company of the Rs 1,000 crore Sonalika Group, is the fifth largest tractor maker in India. The company is privately-owned by the Mittal family. At present, ITL produces tractors under the Sonalika brandname with 25-60 HP engines at its Hoshiarpur plant in Punjab.

Renault Sonalika International, a joint venture marketing company in which Renault holds 60 per cent stake, will market these tractors worldwide, except in the Indian sub-continent and Europe.

Mittal said tractor sales is likely to go up by 25 per cent this fiscal to 20,000 units from 16,000 in 2002-03. The higher sales is likely to help ITL achieve a profit of Rs 80 crore and a 25 per cent growth in turnover at Rs 500 crore during 2003-04, he added.

The Sonalika Group has recently announced its diversification into manufacturing sports-utility-vehicles through a technical alliance with the UK-based MG Rover and PowerTrain. The SUVs will be produced at a new factory in Himachal Pradesh with an initial investment of Rs 200 crore.