International Tractors (ITL), part of Sonalika Tractors, aims to further increase its global play and is investing $100 million (Rs 835 crore) in expanding its manufacturing capacity specifically targeted for the export markets.
“We have the capacity to produce 50,000 tractors per annum for exports, we expect to export around 40,000 units this year. There was a need to expand production for exports and hence we are investing $100 million towards a new plant that will be ready in the next two years,” says Gaurav Saxena, Director & CEO, International Business, Sonalika Tractors.
The company has started work on adding a new 100,000-unit capacity near its plant to meet export needs, which is expected to be operational by 2025-26.
His bullishness is on the fact that the company is already a leading global supplier of tractors in the 16HP to 125HP range and claims to be the only Indian company with such a diverse portfolio that meets the varying application needs.
It is also launching 5 new tractors including an electric tractor on October 14. “We will launch the H-series, the hydrostatic range of tractors for the European and USA markets; S-series for the agricultural segment; C-series, or the compact range for southeast Asia and paddy farming; N-series, or the narrow tractors mainly for the orchard and low-profile sector. And lastly, SV-series or electric tractors in the small horsepower range especially developed for the export markets,” reveals Saxena.
At present, the company is said to export products in over 150 countries and has over 3,000 dealerships globally.
Make-in-India for the World
One may think that most tractor customers’ purchase decisions are only influenced by the performance and price of the vehicle, but when it comes to export markets, looks and comfort matter too.
For instance, in some developed countries, the regulations mandate a tractor to have a cabin, which means the need for proper comfort and HVAC, a requirement still not widely seen in India. Hence, for ITL, vehicle design is also a focus area.
This is what Saxena believes has helped the company attain leadership positions in the segments it caters to globally.
“We have a leading market share in many markets in 15-plus countries. In our addressable segment, we enjoy a leadership position in Germany, France, Portugal and Hungary among others. We are the only company in the country that has a separate setup for cabins. We can manufacture 1,000 tractor cabins a year.”
Saxena says at present, almost 80 percent of the tractor parts are produced in-house, this includes engines, transmission, hydraulics and even plastic components.
Future plans
In addition to India, the company has also set up facilities globally including India – Brazil, Algeria, Turkey, Thailand, and USA. This allows it to not only understand the requirements of the local market but also keep an eye on global developments and trends.
It also has a long-standing technical partnership with Japan’s Yanmar, which provides support in terms of new technologies, product development, and quality improvements.
It was earlier this year, ITL acquired Germany-based Thaler, a wheel loader company, that will strengthen and complement its tractor range.
“We have some other companies also in the pipeline where we are looking for major M&A. We are planning an acquisition in Australia, the announcement is expected in a month or two. They make front-end loaders, which is major equipment used in most of the markets along with the tractor,” shares Saxena.
The idea he says is to look at various opportunities that can support its business.
Talking about the topic of alternate energy, Saxena shares that ITL is already selling bio-fuel-powered tractors in the markets where the energy mix is available. As is the case with the various players, it has set up a separate vertical internally called “New Technology” that is exploring newer technologies.
When queried about the potential of autonomous tractors globally and in India, Saxena says, “I strongly believe that autonomous tractors can be used maybe for the orchard application where you can put the tractor and it will keep on moving around. But if you go into the real the application for agriculture and if you look into the India market, we have small land holdings and a huge population. In the future definitely there may be a need for autonomous tractors except small applications, but at present it is a very niche market and it is going to develop very slowly.”
