Tractor major Sonalika has firmed up plans to double tractor manufacturing capacity with an investment of Rs 500 crore at its Hoshiarpur facility in Punjab as it seeks to enhance domestic market share on the back of growing demand.
On export front, Sonalika has also plans to set up a tractor assembly plant at Turkey as part of its strategy to push up exports.
"We will invest Rs 500 crore in our expansion at our facility in Hoshiarur. It will be operational by March 2015," Sonalika Group Vice Chairman A S Mittal told PTI.
Post expansion, the company will be producing 500 tractors a day (1.50 lakh units per annum) as against manufacturing of 260 tractors a day at present, said Mittal.
"After expansion, our facility will emerge as world's largest integrated tractor manufacturing facilities under one roof," he claimed.
Punjab based Rs 5,000 crore business conglomerate expects to have market share between 15-20 per cent after expansion. The company currently enjoys 10 per cent market share in domestic tractor market with total size expecting to reach 6 lakh units this year.
"Tractor segment in the country is growing because of labour shortage, farm mechanisation and new irrigation facilities coming up in the country," said Mittal.
Betting big on overseas markets for its tractors, Mittal said the Sonlika Group has plans to set up a new tractor assembly facility in Turkey as the country offers immense potential for tractor segment.
"We are thinking of having an assembly facility in Turkey with size of 20,000 units per annum. The total market for tractors in this country stands at one lakh units per annum," he said.
Sonalika already has assembly facilities in Brazil, Argentina, Nigeria and Algeria. It supplies tractors in Completely Knocked Down (CKD) conditions to overseas markets.
Mittal said the company is focusing on several export markets, including Germany, France, South Africa, Argentina, Brazil, Turkey, Algeria and , Egypt for increasing its exports.
Sonalika plans to launch new range of tractors with higher capacity such as 75 HP and 100 HP for export markets. Besides, the company is also looking at sub 20 HP range of tractors for gardening purposes.
"What we are focusing is on 75 HP and 100 HP. We are also looking at smaller segments like sub 20 HP which are gardening tractors required for grapes. These tractors have requirement in countries like France and Germany," he said.
Sonalika is looking to enhance share of export in total sales from 17 per cent to 30 per cent on growing overseas market.
