Tractor manufacturers are making rapid strides in the wake of infrastructure development and the mechanisation of agriculture. The past two years have seen the industry growing at over 20 per cent a year. Although the cost of credit has risen, the demand for tractors is growing unabated, and all players – big and small, including ancillaries – have benefitted.
Vendors catering to tractor manufacturers said their hands are full and labour shortages are coming in the way of meeting orders. According to Prakash Sharon, executive director of HMT’s tractor division, the mushroom growth of private finance companies in recent years has provided a big push to tractor sales. Coupled with better remuneration for crops in the form of minimum support prices, the government’s focus on priority sector lending and escalating returns on land transactions, this has increased the purchasing power of farmers.
Tractor manufacturers are highly dependent on ancillaries for components such as gearboxes, brakes and engines. The expansion of big players is bound to percolate down to small entities in this trade.
Mahindra and Mahindra’s Swaraj division, located at Mohali, which produced 62,000 tractors last year, envisages manufacturing close to 75,000 tractors this year to match the demand.
Sonalika Tractors, a brand of International Tractors Limited, is looking to increase its sales from 50,000 to 70,000 tractors (of which 10,000-15,000 tractors will be for the export market).
Even new entrants such as ACE (Action Construction Equipment) Tractors, based at Palwal near Delhi, are upbeat and expect to go from 3,500 tractors last year to 6,000 tractors this year.
“The increased use of tractors in transport of construction material and expansion of the irrigation network in Rajasthan (which helped farmers to increase the area under cultivation) has given a fillip to our sales. We plan to expand our operations pan India in the coming years,” said Surjit Singh, CEO of ACE Tractors.
C B Goyal, who has been a vendor to the tractor industry for a couple of years, said it was difficult to meet deadlines, as orders were pouring in on an unprecedented scale, but procuring skilled manpower was proving to be a problem.
Nitin Peshawaria, who runs an auto ancillary in Chandigarh, faces the same problem: “We are consistently upgrading our machinery to expedite processes but there is a dearth of suitable manpower to run the latest equipment.”
Ancillaries located in the NCR belt are aggressively investing in low-cost automation to improve quality and increase volumes.
Naresh Kansal of Kansal Engineering Limited, which has plants in Gurgaon, Derabassi, Bhopal and Mohali, said that investment in low-cost automation has not only improved quality but also the work culture in his factories. Reduced manpower lowers the space requirement and the cost of manpower management, he said.
Most players are consistently doing in-house R&D to launch new variants of tractors and agriculture tools.
