The Hindu Business Line : TAFE aims for export push

TRACTORS and Farm Equipment Ltd (TAFE), a part of the Amalgamations Group, is aiming for a substantial jump in its exports. Last year, it exported 1,600 tractors to various countries, including the US, Europe and parts of Africa.

According to Ms Mallika Srinivasan, Director, TAFE, exports have been growing quite well and there is good potential to grow exports further by tapping new markets.

As part of this strategy, TAFE re-launched its entire range of tractors in the US in April. The company sells tractors in the 35 HP to 50 HP range in the US under its own brand name. This segment, according to Ms Srinivasan, accounts for about 50,000 units in the US annually and is a fairly big segment there. It is also the segment where Indian manufacturers are particularly strong.

She said India's advantage in tractor exports stemmed from the fact that it was a mature industry with a strong supplier base and availability of good engineering talent. The domestic industry also had the scale.

Asked if TAFE and the Indian tractor industry would look at exporting to China, Ms Srinivasan said, "I do not think we are ready to look at China. First of all I would like to look at potential in other markets." The Chinese market presented problems in terms of issues over intellectual property rights and distribution.

In 2003-04, TAFE sold 24,895 tractors against 24,465 units in the previous year. Its market share dropped from 14.25 per cent in 2002-03 to 13.07 per cent the next year.

The total industry sales were 190,530 in 2003-04 against 171,696 the previous year, a 10.97 per cent growth. However, in the first quarter of 2004-05, the company's market share is up to 14.34 per cent. The company sold 8,245 tractors in this period, a 52.80 per cent growth over the 5,396 units sold in the first quarter of 2003-04. During this period, the industry grew 47.80 per cent, to 57,488 units from 38,896 units.

Ms Srinivasan explained that the company tightened its credit policy during 2003-04 and that was reflected in its lower growth rate when compared to the industry's. However, the company's policy helped it in a higher sales growth in the first quarter.

This year, TAFE has launched three tractors in the domestic market: a 52-HP product in Punjab, a tractor specially designed for Maharashtra and a paddy special for the Southern market. Three more models would be launched before the end of this financial year, including a 25-HP one. The company would also launch a tractor in the upper-end of the high HP range (above 60 HP).

Ms Srinivasan said TAFE would strengthen its association with AGCO Corporation of the US, which has an equity stake in the company. "We will strengthen our association with AGCO (on infusing more technology). Wherever they can support us with technology, we will be quite happy to take it," she said.

More Stories on : Outlook | HCV/LCV/Tractors

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page