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Lemken India Agro-Equipment, the wholly-owned subsidiary of German manufacturing major Lemken GmbH, aims to expand its dealerships from 20 to 34 in the 2015-16 fiscal and establish a presence in Gujarat and Madhya Pradesh to further its foothold in the ₹3,000-crore domestic agro-equipment market.
Lemken dealers are present in Punjab, Maharashtra, Tamil Nadu, Andhra Pradesh and Karnataka.
The company will also ship its first consignment of eight ploughs to Turkey this month and is looking to export between 150 and 200 units to South Africa, South-East Asian countries and the European market this year.
Managing Director and CEO Arvind Kumar said the firm leveraged technology over price competitiveness in the pre-harvest agri-implements it manufactures. The expansion plans are being undertaken after healthy returns posted since Lemken began commercial production at its Nagpur facility in January 2013.
“We are focusing on Gujarat and MP now. There’s no real competition in terms of technology in India, it’s only in pricing. There are acquisition constraints since financing isn’t available,” he told BusinessLine .
The company sold 1,000 units of hydraulic reversible ploughs (1 MB, 2 MB and 3 MB) in 2014-15 and was aiming to see that rise to 1,500 units in the coming fiscal. Kumar stated that the turnover of ₹15 crore last year would likely rise to ₹25-30 crore in 2015-16.
Embrace technologyKumar said State governments need to gear more towards promoting technology in agriculture.
“State authorities provide subsidy on the basis of the lowest priced product. So, if a local plough costs ₹70,000 and the subsidy of 50 per cent is given, that ₹35,000 is the same amount given for our plough that costs twice as much but is more fuel-efficient and has a longer life,” he said, claiming productivity has risen by 15-20 per cent for farmers who used Lemken implements.
Around ₹80-90 crore has been invested in the Nagpur plant, which is functioning at 50 per cent capacity, and Kumar expected the figure to rise to ₹120 crore as the firm diversified its product portfolio to include a power harrow and tine cultivator this year.
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