Mahindra & Mahindra expands overseas tractors and farm machinery business

Rashmi Pratap Mumbai | Updated on January 13, 2018 Published on March 05, 2017

Picks few top markets for manufacturing or sales and distribution set up

Mahindra & Mahindra is expanding the international play for its tractors and farm machinery business, targeting to earn 50 per cent of the revenues from the overseas market in the next two years.

The world’s top tractor maker by volumes is also open to more acquisitions to expand its reach and product capabilities.

“We would like to see ourselves move from being a domestic tractor maker to a global farm machinery company beyond tractors,” said Rajesh Jejurikar, President and Chief Executive, Farm Equipment & Two-Wheelers.

Managing Director Pawan Goenka said the company was looking at acquisition opportunities as a part of its overall game plan for the business.

“If something fits like a puzzle piece, we will go for it,” he said.

The global farm equipment market is estimated at $156 billion of which tractors is only $60 billion.

“There is a large global opportunity outside tractors and we would like to take advantage of it,” he added.

Currently, tractors bring in about 85 per cent of the sales for the business, while the rest is from farm machinery. The company’s target is to bring down the share of tractors to 79 per cent by FY-19.

“We can’t globalise by being everywhere. We have identified a few top markets where we would like to be present through manufacturing or sales and distribution set up. These markets are North and South America, China, Japan and Turkey, where we already have on-ground presence.”

Globalisation initiative

Jejurikar said the company’s recent acquisitions will aid its globalisation initiative. Japan’s Mitsubishi Agriculture Machinery, with its range of rice transplanters and harvesters will help M&M address the requirements of the global rice value chain. The others are Finland’s Sampo Rosenlew and Turkey’s Hisarlal, with strength in the soil preparation area. “We would like Sampo to be the base for harvester product development and centre of excellence,” Jejurikar said.

Turkey is a large market for tractor and farm machinery, pegged at around $3 billion. Hisarlal, said Jejurikar, will provide a good reach to M&M. “It creates a base for us to introduce our tractors using the good distribution structure that Hisarlal brings to us. It will allow us to access markets in CIS and parts of the Middle East,” he added.

The company is also building base organically in Brazil and Mexico. In Brazil, M&M has set up a factory in Porto Alegre from where it plans to launch new portfolio of tractors. It is already sourcing about 60 per cent of the parts locally.

“We will focus on product development around the world. But we will localise our offerings as per the requirements of different countries,” Jejurikar added.

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Published on March 05, 2017
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