In a bid to take a slice of the estimated Rs 3,000-crore agro equipment market in India, Germany-based manufacturer Lemken GmbH and Co KG has set up its first non-European manufacturing unit at Butibori, Nagpur.
In the first phase of operations, its wholly-owned subsidiary Lemken India Agro Equipment Pvt Ltd, will make hydraulic reversible ploughs that can be used on tractors over 40 HP in power.
The company has invested Rs 60 crore to set up this facility and plans to implement a second phase, involving an equal amount, to make seedbed preparation implements, cultivators and disc harrows a year or so later.
Nicola Lemken, Partner, Lemken, and the seventh generation of ownership of the family-run-business, said the Nagpur plant will cater to the growing demand for agro equipment in India. Lemken also plans to export to countries in South-East Asia and Africa form here.
The Nagpur facility has the capacity to make 3,000 units annually in the first phase, which will be scaled up to 5,000 units in the second phase.
“All the equipment will be locally made from imported boron steel, Arvind Kumar, CEO, Lemken India said, adding local manufacture will make equipment 40 per cent cheaper in comparison to importing it. Initially, the company is setting up 35 dealerships in Maharashtra, Punjab, Karnataka, Andhra Pradesh and Tamil Nadu in the next one year, and plans a stage-wise national roll-out subsequently.
The Indian agro-equipment market is largely unorganised but estimated at Rs 3,000 crore annually, he said, pointing out that with 43 per cent of area under cultivation against 11 per cent world wide, the potential to increase productivity through mechanisation was high.
Lemken GmbH has three plants in Germany and is setting up an assembly plant in China that will become operational in 2013.