Hoshiarpur
(Punjab) based Sonalika group International Tractors Ltd (ITL) is contemplating
on establishing two more assembly plants in Africa, riding back on the success
of exporting 6,000 units in that region. According to the company, it will add
two more assembly units to the three existing factories it has in Africa,
apparently with the aim of tapping the potential of the vast unutilised arable
land bank of 54 nation continent.
Rajiv Wahi,
Senior President, International Business, International Tractors Limited said:
"We are contemplating on adding two more assembly facilities by this year.
All Indian, Chinese and European tractor brands are present in that region,
nevertheless Indian tractors are the most adaptable for the terrain. Therefore,
it is pertinent to engage firms and governments alike in agriculture. We are
looking at options in South Africa and in the East African nations".
The company
already has three plants in Cameroon, Nigeria and Algeria. What is more, the
investment needed to establish any assembly unit depending on the capacity,
volume and localisation would be anywhere between US $ 5-20 million (Rs 20
crore to Rs 122 crore approximately). What with nine times the size of India,
the African continent still has an estimated 0 percent of unutilised arable
land. Furthermore, it still banks upon the conventional agricultural practices.
Africa is also the net importer of agricultural products. It needs one lakh
tractors with the paucity of 70,000 vehicles. Eventually, India is in an
advantageous position as far as the tractor industry is concerned in that
region, thanks again to the factors including durability and cost.
In terms of
agriculture, Africa is way behind, something like India was some three decades
ago. Sonalika's experience and expertise are very much relevant for that
region. Back n the early '70s, India's tractor market was pegged between
30,000-40,000 units per annum. During that time, India was a net importer, the
official added.
Sonalika commenced
shipping its products to Africa almost 11 years ago. Currently, the firm
exports to around 30 nations in the continent. The decision to establish new
assembly plants in that region was part of its strategy to excel in the
available market segment. The African terrain is akin to Indian climatic
conditions, hence it makes sense preferring Indian products.
Like in
India, Africa also has fragmented land holdings. Around 90pc tractors are
located in countries such as South Africa, Algeria, Morocco, Tunisia and Egypt.
This is only scratching the surface, where the continent still is left with 54
countries. all the five nations put together, there are around 20,000 tractors.
All other nations have a combined figure of few hundred tractors.
International
Tractors Limited is part of Rs 5,000 crore Sonalika group.