VST Tillers Tractors begins production at new Hosur plant

VST Tillers Tractors Ltd, the Bangalore-based tractor manufacturer, has commenced production at its greenfield tractor plant in Hosur industrial town on the Tamil Nadu-Karnataka border. The first tractors from the new unit rolled out on April 25. VST manufactures tractors with technical designs supplied by Japanese auto major Mitsubishi.

The new plant, set with an investment of Rs 70 crore and spread across 14.6 acres at Sipcot Phase-I in Hosur, has a manufacturing capacity of 36,000 tractors per annum.

Talking to Autocar Professional, BCS Iyengar, executive director of VST Tillers Tractors, the company will initially manufacture around 10,000 tractors comprising 18.5hp and 22hp models at the new plant in 2014-15. 

Thus far, VST has been manufacturing both tractors and tillers at its Bangalore plant. Now, the tractor manufacturing operation stands shifted to Hosur while tiller production will continue at the Bangalore facility. In 2013-13, the company produced 7,400 tractors with 100 percent local components. Critical machined components such as the crankshaft, connecting rod, cylinder rod, cylinder block and camshaft are produced at the Mysore plant while vendors in Tamil Nadu supply castings and sheet metal proprietary items for the tractors manufactured at the new Hosur plant.

With the government recognising the need to focus on mechanisation in small farm holdings which account for about 70 percent of landholding in India, the company expects this to be a major factor driving future demand for tractors and tillers in India.

According to Iyengar, with the new Hosur plant, VST, which posted a turnover of Rs 620 crore in 2013-14, is targeting Rs 1,000 crore in topline revenues in the next two years. He said the Indian tractor market, which is the largest in the world, saw a marginal decline during 2012-13. The industry sold 590,672 units of tractors compared to 607,658 units in the previous year.

“The industry is expecting to bounce back with the agriculture sector doing better with favourable policies. With labour becoming an ever-increasing challenge, low-cost mechanisation will fuel growth for power tillers and low horsepower tractors in the near- and long-term,” he added.

Iyengar claimed VST Tillers Tractors is the undisputed leader in the power tiller segment. The company expects to increase tiller sales to 30,000 units in 2014-15 compared to 27,000 units in the previous fiscal.