Chennai-based tractor manufacturer Tractors and Farm Equipment Ltd (TAFE) said the company would invest ₹250 crore by end of this financial year on expansion and development of new products.

The company, with four factories, has a capacity of around two lakh units a year, which it plans to increase to around three lakh units a year in the next two years, Mallika Srinivasan, Chairman and Chief Executive Officer, TAFE, told Business Line .

“New product development and all the processes will mean an investment of ₹500 crore, half of which is already on ground in the last two years, so another ₹250 crore will be spent by end of this year,” she said.

Srinivasan said revenue-wise, TAFE has done well at around ₹9,663 crore last year (till March 31) from ₹8,290 crore the previous year, and is expected to do better this year too.

Strong exports Overall, the domestic market is strong and exports are stronger, as the company’s products are well accepted overseas, especially the smaller horse-power (hp) tractors (under 100 hp), she said. The company sold 1.7 lakh tractors last year, of which around 15 per cent were exported to over 80 countries, Srinivasan said, adding that next year, exports are expected to rise to 20 per cent.

A major chunk of TAFE’s exports go to Africa, South America, Eastern Europe and the Asia Pacific, including Sri Lanka and Nepal.

“Our experience in the emerging markets is very helpful because a lot of lessons have been learnt from there.

“Technology-wise as well as with the good range of products — we launched 50 new variants last year alone in the exports markets,” Mallika Srinivasan said.

Innovate and develop She said the company, which has a big research and development team, will continue to innovate and develop newer products for each of the markets it operates in. Apart from four tractor plants, the company also has an engines factory and two engineering plastics units, employing over 2,500 engineers. However, its major business is tractors, which contribute around 90 per cent to its total revenues.

Sales up 20% TAFE has over 1,000 distribution networks across the country which sell its three brands — Massey Ferguson, TAFE and Eicher.

According to analysts, India sold around 6.5 lakh tractors last year, up 20 per cent over the previous year.

TAFE enjoys a near 25 per cent market share, the second largest, after Mahindra & Mahindra, by volume.

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