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The country’s second largest tractor manufacturer Tractors and Farm Equipment Ltd (Tafe) is currently in negotiations to acquire a 100% stake in one of the two east-European tractor manufacturers--Yugoslavia’s Industrija Masinai Traktora (IMT) and Serbia's Industrija Motora Rakovica (IMR), industry sources told FE.
If the deal goes through with any of the two, Tafe will have to shell out around Rs 1,000 crore. Both the tractor manufacturers have an annual production capacity of around 25,000 units each. Tafe has a production capacity of 85,000 units per annum.
Tafe had acquired 100% stake in Eicher Tractors in 2005 for Rs 310 crore. The company holds around 23% market share in the domestic tractor market.
“Dependence of agriculture on monsoon in India affects tractor sales in the country. We are looking at other markets for a consistent sales growth,” a Tafe official said.
Meanwhile, Tafe is planning to launch a higher capacity tractor (50hp) solely for the US market. The company will sell tractors in the American market through Agco. Agco holds 24% stake in Tafe.
Tafe is expected to register a total turnover of around Rs 3,600 crore in fiscal ending March 31, 2007-08, up 20% over the previous year. During this period, it would see total sales of around 80,000 units, including those from Eicher brands of tractors.
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