Business Standard

SBH to finance purchase of L&T-John Deere tractors

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Our Regional Bureau Hyderabad
L&T-John Deere Private Limited, a 50:50 joint venture between the Indian engineering major and the US-based leading farm equipment producer, today signed an MoU with the State Bank of Hyderabad (SBH) to provide loans to the farmers at attractive terms and conditions for the purchase of the former's tractors.

L&T-John Deere has set up a tractor manufacturing facility at Pune with an investment of Rs 400 crore, and claims to be the only tractor manufacture in the country with QS-9000 certification.

The company has a sales target of 10,000 tractors in the current fiscal, including export of 3,000 tractors. Of the domestic sales, about 40 per cent comes from the south.

"Our MoU with SBH will enable the farmer to take loan for the purchase of tractor with only 10 per cent down payment at an affordable rate of interest on diminishing balances with a repayment tenure of 7 to 9 years. The rate of interest is 10.25 per cent for loans up to Rs 2 lakh and 10.75 per cent for loans above Rs 2 lakh," said J P Banarjee, the chief marketing executive of L&T-John Deere, here today.

"This will help the deserving farmers to go for mechanisation and thus improve their productivity as well as profitability. Such joint efforts between banks and the tractor industry are essential to transform the face of the Indian agriculture from the current subsistence level to a profitable agricultural business," Banarjee observed.

He said that the company as a part of its initiatives to serve the farming community was planning to take up a pilot project in 100 acres either in Andhra Pradesh or Karnataka to demonstrate best farming practices under low rainfall conditions to ensure the viability of agriculture activity.

"Unlike Israeli project that was initiated in Kuppam, it involves less investment. The road map for the project will be ready by the end of the current fiscal. The location will also be finalised by that time. Our foreign collaborator will be assisting us in this project thorough its crop specialists. We want to take up similar projects in other regions as well in due course of time," Banarjee added.


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First Published: Dec 18 2003 | 12:00 AM IST

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