Mumbai, April 20 Mahindra & Mahindra’s Farm Equipment Sector, which exports tractors to 25 countries worldwide, is looking at Africa in a big way. The market here is expected to grow to one lakh tractors annually in the medium term.
Though M&M’s overall tractor exports fell 19 per cent to 7,013 units last fiscal, Africa with 1,600 units was the silver lining in the cloud. “Our success story has been Africa which has seen a 10-fold increase in tractors between 2005 and 2009,” said Mr Anjani Kumar Choudhari, President, Farm Equipment Sector.
Assembly plants
There has also been a proliferation of tractor assembly plants in Africa lately. While Ghana, Nigeria, Namibia and Gambia already have facilities in place, new assembly units are coming up in Angola and Chad.
Sources say that some of these countries have also sought lines of credit from the Government of India. In addition, the local government also support this initiative largely because it contributes to the agriculture sector as well as providing employment opportunities for the locals.
“We export semi-knocked down units which are then assembled in African plants. Recently, we got an order of 800 units from Angola,” said Mr Choudhari.
Long-term strategy
According to him, there is a lot of scope to grow business in this part of the world. “It is something we are looking at as a long term strategy. Right now, the total tractor market there is roughly 20,000 units,” he added.
Mr Choudhari said that Africa was also richly endowed with natural resources (Zimbabwe and South Africa, for instance, have huge agriculture produce) and the market was, therefore, “bound to grow”.
While Africa looks promising, M&M is also focusing on China where it has two joint ventures. Plans are under way to sell at least 35,000 units this calendar. Exports to the US were down 20 per cent last fiscal to a little over 4,000 units largely due to the recession.
Source : Business Line