Tractors India revs up rental business

Tractors India (TIL) wants to rev up its rental business by setting up about 30 rental outlets for its machines in two years.

TIL recently established its branch in Asansol, where it also set up its third rental store. Another store will open in Udaipur next week.

This is in addition to the two rental outlets it already has in Sahibabad in Ghaziabad district and in Bhubaneswar.

The company also intended to set up a component rebuilding centre, certified by Caterpillar, the world's leading manufacturer of construction and mining equipment, and this should be ready sometime this month, Sumit Mazumder, managing director and chief executive officer of TIL, told Business Standard.

So far, the rental business has been largely controlled by the unorganised sector.

"Though machines are available on rent, they are old and low on productivity and efficiency. But TIL provides an almost new machine to buyers at 70 per cent the original cost, with profitability and productivity assured," Mazumder said. The company's entire rental fleet of machines is allotted to buyers for three years and these machines don't require repairs for five years.

The machines on rent are useful particularly to those who cannot afford to purchase equipment certified by Caterpillar.

The earnings from the rental business, however, isn't added to TIL's balance sheet.

"We are also mulling over the possibility of manufacturing gas-powered gensets,'' Mazumder said. The generating cost through these sets is only a fourth of the cost for diesel gensets.

TIL, whose product portfolio includes materials handling, mining as well as power systems solutions, has also resumed manufacturing level luffing cranes.

The company boasts of a 75 per cent market share in the materials handling segment and the parts and services segment is a big money-spinner.

TIL manufactures India's largest mobile cranes in the range of 5 to 100 tonnes in technical collaboration with global leaders.

It is the leading provider of technology-intensive and application-specific heavy engineering equipment for core infrastructure sectors.

It provides for a wide array of core infrastructure sectors such as oil and petrochemicals, roads, steel plants, ports, cement and construction.