The Rs 1,050-crore Tractors India Ltd group is expecting the Caterpillar dealership business – run by the wholly-owned Tractors India Private Ltd (TIPL) – to slow down “temporarily” in this fiscal due to low demand from the road construction sector.

The road sector contributes 40 per cent of TIPL's business.

“We are expecting the demand for Caterpillar equipment from the highway construction sector to slow down temporarily this year due to change in financing pattern of these projects,” the Vice-Chairman and Managing Director, Mr Sumit Mazumder, told Business Line .

According to him, the change over from an erstwhile advance financing method to build-own-operate-transfer (BOOT) has created a problem for the sector as contractors are now saddled with the uphill task of arranging finances for too many projects.

“I believe it's a temporary problem and a solution may be arrived soon,” he added.

New plants

Meanwhile, the holding company TIL Ltd is setting up two plants near Kharagpur to offer its clients a wider basket of infrastructure equipment (other than Caterpillar). The total cost of the two projects is pegged at Rs 200-250 crore.

“We are set to start production from the proposed plant at Changual near Khagarpur in November. The plant will start manufacturing port and yard equipment including gantry cranes, crushers, screens, and hotmix asphalt plants in technical collaboration with Astec Aggregate and Mining Group of the US and Mitsui of Japan,” he said.

The second plant to manufacture Reach stackers (in collaboration with Hyster) and Cranes (in collaboration with Grow Worldwide ) is expected to go on stream in October-November 2012.

Results

TIL posted a consolidated profit of Rs 6.13 crore in the first quarter of this fiscal. The profits were down from Rs 10.04 crore during the corresponding period of the previous fiscal. Net sales moved up by 28 per cent to Rs 353 crore during the quarter.

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