International Tractors Ltd (ITL), the flagship company of Sonalika Group, on Monday said it has formed a joint venture with Shandong Luyu Heavy Industry Co to enter into the Chinese market.
As per the joint venture (JV) agreement, Shandong Luyu will offer ITL's range of tractors in the Chinese market.
The partners will also assemble engines for the wheel loader application for captive consumption of Shandong Luyu and other wheel loader construction machinery manufacturers in China.
The JV company will invest USD 10 million to set up a manufacturing facility in China with an installed capacity of 50,000 engine and tractors in the first phase.
"Today ITL has presence in more than 120 countries and is a trusted brand among more than 1 Million farmers across markets, in both India and overseas. China market has enormous potential for our range of tractors and with our association with Shandong Luyu Heavy Industry Co, we are confident of providing farmers in China with best-in-class technology at competitive price point," ITL MD Deepak Mittal said in a statement.
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ITL will also provide customised engines for the wheel loader construction machinery application, he added.
The company is already exporting its engines for tractor application apart from using them for own brand of tractors sold in India and globally.
Shandong Luyu, which is an established player in small size loader, small-medium-sized excavator and forklift in China, also exports products to various countries.
The turnover of the group is over USD 400 million.
"We believe that this JV will be able to penetrate deep range of Sonalika tractors in China," Shandong Luyu Heavy Industry Company Founder and Chairman Yang Shao Jie said.
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