The Rs 6000 crore Lachhman Das
Mittal and family controlled Sonalika group is on a major export drive to push
global sales of its tractors, apart from consolidating its domestic sales,
thereby aiming to fully utilise its total plant capacity of 3 lakh units per
annum in Hoshiarpur, Punjab in the near future . According
to the company’s new five-year plan, it is hopeful of exporting at least 50,000
units per annum alone to its equity partner Yanmar of Japan.
Sonalika Group’s flagship
company International Tractors Ltd manufactures tractors under the name
Sonalika and Solis. While the family takes an active part in the day to day
running of the company, with LD Mittal and his son Deepak Mittal operating out
of Delhi, Amrit Sagar Mittal, Vice chairman of ITL and LD Mittal’s elder son
operates out of Hoshiarpur. He is a hands on and focussed man when it comes to
The Hoshiarpur plant of Sonalika
is the world’s largest integrated tractor plant, while the company is the third
largest manufacturer of tractors in the country.
“We are currently exporting to
around 80 countries...the whole of Africa, the whole of Europe, part of
America, China and Russia ...Within five years we will be able to achieve in
terms of sales all this number of 300,000 tractors (current plant capacity). Of
this 50,000 will be exported by Yanmar to their different locations under their
brand,” AS Mittal told Motown India in an exclusive
Mittal said the company plans
to produce on an average 10,000 units of tractors per month at the Hoshiarpur
plant beginning May 2017. In the financial year 2016-17 the company achieved
all-time high sales of 81531 units with growth of 19.6pc over the previous
year. Of this domestic sales stood at 69,290 units with an annual growth of
18pc over the previous year while exports increased significantly by 29.3 pc to
A fairly young company, International
Tractors Ltd was set up in 1996. Its founder Lachhman Das Mittal had set up Sonalika
Agro Industries Corporation way back in 1969 to support the Indian farmers with
mechanisation technology. ITL today produces tractors between 20 HP to 120 HP. The
new integrated tractor manufacturing plant in Hoshiarpur has a capacity to
manufacture approximately 2 lakh tractors. The old plant adjacent to the new
one has a capacity of manufacturing 1 lakh tractors per annum.
The company has strategic
partnerships with Blackstone PE of Singapore and Yanmar of Japan. While the
company is tight lipped about its financials, it has been reported in the
recent past that Blackstone Group will be selling its 17.75% equity stake in
International Tractors to Yanmar Rs1,700 crore. The company has been valued at
Rs 9500 crore. Blackstone had invested about $100 million (Rs 520 crore then)
for a 12.5% stake in the tractor maker in 2012, and had subsequently raised its
stake to 17.75%. Yanmar already owns 12.5% in ITL. Yanmar could now end up
having a 30pc equity stake in the company while the remaining 70pc will
continue to be with the founders led by the chairman LD Mittal.
At the Hoshiarpur integrated tractor
plant, the company makes its own sheet metal, transmissions, hydraulics, gear
box and engines. Each tractor that is produced at the plant is tested for
quality and build. From tractors as small as 20HP ones meant for orchard
application to ones as big as 120HP Solis tractors are made at the plant here,
which include both 4X4 and 4X2 tractors and some of them fitted with air
The plant has its own press
shop, heavy and light machine shops, an engine shop, an R&D centre, PT-CED
& Robotic paint shop and a new assembly plant.
AS Mittal said that as per the
company’s five year plan, ITL will be selling around 50,000 units of tractors
to Yanmar which in turn would be sold by Yanmar to its customers worldwide
while the remaining would be sold through ITL to its own markets. Capacity
utilisation of its 3 lakh capacity plant too would go up significantly in the
next few years. Larger tractors with capacities as high as 180hp would also be
manufactured by the company, he added.
“In India, tractors up to 60
hp constitute almost 99pc of tractor sales. Earlier, it was as low as 35hp to
45hp. But in the export markets there is a lot of demand for not only the 20HP
tractors that are meant for orchard applications but also higher HP tractors.
We produced tractors upto 120 hp but will soon be making tractors up 180HP,”
Mittal said. Uttar Pradesh is the largest consumer of Sonalika tractors. ITL
sells tractors under the Sonalika and Solis brands, the latter meant
exclusively for exports.
“When we talk of those
customers (global) and when we talk of higher HP tractors, tractors of 100HP or
tractors of 120HP, the cost is equivalent to a Mercedes C class,” heinformed.
With the Mittal family now
putting all their efforts into Sonalika tractors, it is just a matter of time
before their ‘Make in India” efforts see a speedy growth for their tractor business
and an almost full capacity utilisation of their Hoshiarpur plant.