Italy-based Same Deutz-Fahr group, one of the largest manufacturers of tractors and agri-related equipments, has acquired a 100 per cent stake in Same Greaves Tractors Ltd for a sum of Rs 25 crore.
Same Greaves Tractors Ltd was a 50:50 joint venture between the Greaves group and Same Deutz-Fahr group that had been operating in India since early 2000.
The new company will be called Same Deutz-Fahr India Pvt Ltd from June 1.
Stating reasons for the acquisition, Kamal Bali, commercial director (Asia), Same Greaves Tractors, said, "The last two and a half years was a period of test marketing for the company. The aspirations of the Greaves group were not fulfilled during this period, as the tractor industry did not meet its expected potential of 3,00,000 units. In fact, it declined to 2,00,000 units."
The joint venture company managed to sell only 2,000 tractors during this period.
"Greaves did not want to play the waiting game anymore. The tractor business did not fit well into the group's overall plans and portfolio. But for Same, tractors are bread and butter. So the two companies decided to part ways," Bali said.
Besides acquiring the 50 per cent stake of Greaves, the $900 million Same Deutz-Fahr group has also decided to increase its investment in the company from Rs 60 crore to Rs 90 crore.
With an installed capacity of 10,000 tractors at its Ranipet facility in Tamil Nadu, the company is looking at capturing at least 10 per cent of the D&E segment of tractors in the next three years. It is also hoping to export at least 5,000 tractors over the next few years.
"We will be introducing a range of powerful, feature-rich tractors and diesel engines that score high on performance and reliability," Bali said.
In addition to the 50 HP model, the company plans to launch 42 HP, 60 HP and 70 HP tractors.
"The company is now looking outwards and sprucing up its distribution and marketing efforts," Bali said.
It plans to increase its dealers from the present 60 to around 100 in the next three months. "We are looking at tapping markets like Punjab, Maharashtra and Andhra Pradesh," Bali said.
