International Tractors to invest Rs 1,000 crore in new plant, R&D operations
The homegrown tractor maker has unveiled five new products including an all-electric tractor for international markets and will set up a dedicated 100,000-unit capacity export plant adjacent to its existing facility in Hoshiarpur, Punjab.
Homegrown tractor maker, International Tractors, which offers its Sonalika and Solis-branded tractors in the Indian and international markets such as Myanmar, Czech Republic, and Germany, has outlined its plans to invest in a dedicated manufacturing facility for exports.
The company unveiled its new range of five tractors for international markets at its Global Partners Summit (GPS) 200 event, which saw participation from ITL's over 200 international channel partners in New Delhi, on October 14. The new export-oriented product range includes ITL's N Series, C Series, S Series, H Series, and the all-electric SV Series of tractors, ranging
from 16hp to 125hp in power output, and catering to various agricultural needs. The new products boast advanced technologies and modern design.
The company which forayed into overseas markets such as those in Europe, North America, Asia, and Africa, in 2010, has achieved a seven-fold growth in this timeframe, growing its exports from 5,070 units in FY11 to 35,160 units in FY23. It continues to remain the top tractor exporter from India for the fourth consecutive year since FY19, and says that it is widening the gap with its main competition which includes John Deere, Mahindra & Mahindra, and New Holland.
Eyeing growing acceptance and demand for its products in global markets, the company has announced an investment of Rs 850 crore in a dedicated tractor manufacturing plant, which will be ready by end-2025, and will be situated adjacent to its existing facility in Hoshiarpur, Punjab. The new facility will have an annual capacity to produce 100,000 tractors, and will export made- in-India tractors which will retail through its over-3,000-strong channel partner network globally.
The state-of-the-art facility will be equipped with modern assembly lines that will roll out one tractor every two minutes. "We will invest close to Rs 850 crore over the next two-three years in technology upgradation with a new facility in Hoshiarpur. The plant will have three different assembly lines that will be able to produce three different product lines simultaneously. We will see bigger, more powerful tractors that will be equipped with new engines, transmissions, and sheet metal come out of this facility," said Raman Mittal, Executive Director, ITL.
Mittal further pointed out that with the commissioning of the upcoming plant, the company will gradually phase out its oldest 100,000-unit assembly line at its existing Hoshiarpur plant to keep the total installed capacity unchanged at 300,000 annual units.
Expanding overseas footprint
While ITL's export market share was pegged at 28 percent in FY23, it grew to 36 percent in H1 FY24. The company says it is expanding its overseas footprint by setting up new assembly plants and offices, such as its recent offshore office in the US. While it presently has assembly plants in the US, Algeria, Brazil, Thailand and Turkey, ITL plans to open more such facilities in the coming years and would also leverage its partnership with Japan's Yanmar.
ITL says Brazil is the biggest export market, and it plans to upgrade its assembly capacity in Brazil from 5,000 to 8,000 units over the next couple of years. The company has also scaled its assembly operations in Turkey from 2,000 to 8,000 units. Moreover, it has a Spare Parts Centre in Germany that helps it to tap into market trends and also respond to customer requirements quickly.
The company' s new range of international products will now enable ITL to tap into more global opportunities in modern farming. While Europe accounts for around 40 percent of its total exports, and within its presence across all 33 EU nations, the company claims leadership in its addressable segment in 15 global markets such as Hungary, Portugal, Iceland, Germany, France, Finland, and Czech Republic, ITL aims to gain more share in markets such as North America.
"The new range of tractors that we have showcased will further strengthen our European presence, and we would like to add more countries where we would target leadership position," said Gaurav Saxena, Director and CEO, International Business, ITL.
Rs 150 crore R&D investment
ITL's latest product showcase includes the S Series which ranges from 16hp to 125hp, and is meant for heavy-duty farming applications. The H Series, on the other hand, will offer hydrostatic automatic transmission for operational comfort and ease of usage. While the narrow N Series is ideal for orchards and vineyards in Europe, Latin America, and South Africa markets, the C Series is compliant with Stage-V emission norms. The all-electric SV Series comes powered by a robust electric motor to offer high torque and power output in the 24-36hp range.
The company says that with the new, designed-in-India range, it will now produce over 400 models at its plant, and will also introduce these products for the Indian customers. "Sonalika was the first brand to export multi-speed and four-wheel tractors and gradually bring them to India. Our new designed- and made-in-India range of Solis tractors with modern technologies will trickle to the Indian market as well," Mittal said.
Beyond its capex in the new greenfield facility, ITL will also invest Rs 150 crore over the next two-three years into R&D to design and develop new products with advanced technologies such as electric, hybrid, and alternative fuels. Combining the two capex outlines, ITL's plans to invest close to Rs 1,000 crore into its business by FY26. The company had clocked 151,660 units with an 11% uptick in FY23, and aims to continue its strong growth in the ongoing fiscal as well.
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