Farm equipment manufacturer New Holland Fiat (India), a wholly-owned subsidiary of the US based group CNH Industrial, sees shortage of farm labourers as an opportunity for greater farm mechanisation in India. The company is witnessing a lot of demand for its sugarcane harvesters from Maharashtra, Gujarat, Karnataka and Tamil Nadu. To further its business, the company is setting up a new facility in Maharashtra with an initial investment of ₹550 crore. In an interview with Business Line , its Managing Director Rakesh Malhotra said the company is also battling grey market for spare parts in India. These parts accounted for about 4-5 per cent of the total turnover in 2013. Edited excerpts:

Why are you putting up this greenfield facility in Maharashtra?

We would be investing about ₹550 crore in the first phase to set up a new plant for manufacturing cane harvesters and cotton picking machines. The investments would be raised through internal accruals, and the project would come up at Chakan near Pune, where we have about 70 acres. Farm mechanisation is picking up as manual labour is becoming expensive and more and more entrepreneurs are looking at agriculture as a source of income. We see a lot of demand for harvesters coming from Maharashtra, Gujarat, Karnataka, and Tamil Nadu.

You are also planning to introduce cotton pickers in India?

We are currently testing cotton pickers to be launched in the Indian market. The pickers, designed for local farm conditions, would be rolled out by 2016. These machines have good prospects as there has been an increase in cotton yields during the recent years. These machines can pluck almost 90-95 per cent of the cotton balls from a plant, the rest will have to be handpicked. At present, cotton pickers are not manufactured locally, so it would be a maiden venture.

The use of tractors for non-agriculture purposes such as for road construction projects have declined. What is your take on this?

Yes, this is due to the slow pace of road construction projects. We see the demand bouncing back after a new government is formed.

For the industry, fake spare parts are a serious issue as it tarnishes the manufacturer’s goodwill. What are your plans to tackle this?

To begin with, we intend to ship every single product with a hologram that can be identified under an ultra violet light. Further, we will put as many as eight different identification marks on each one of our nearly 8,000 components sold through dealer networks. These features will be introduced this month, starting with 3,000 fast moving parts such as filters, clutch plates and fan belts.

What is the status of capacity addition/ utilisation at the Greater Noida facility? Are you planning to introduce high horse power machines in the Indian market?

In calendar 2012, we had a capacity of 40,000 units and that was fully utilised. This January, we increased the capacity to 55,000 units of tractors with power ranging from 32-75 HP. We hope that this capacity will also get fully utilised soon.

A few units of 90HP are also being imported and sold in the local market. We sell higher HP tractors globally, and would introduce it in India depending on the demand.

Are the subsidy schemes offered by various State Governments for harvesters effective?

Though harvesters are expensive machines, it would help farming contractors achieve break-even in the first three years.

Some States such as Maharashtra are already offering subsidy. Progressive States such as Gujarat and Tamil Nadu are evaluating the subsidy proposals.

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