Mumbai: Indian tractor maker Escorts Ltd, which recently won a $40 million order to supply tractors to Tanzania, is looking to expand its footprint in the African continent, a senior official said on Thursday.
“We are looking at increasing our presence so we are in discussion at various levels. We are discussing with other markets as well,” Nikhil Nanda, joint managing director, told Reuters over the telephone.
The firm will start supplies of premium range tractors to Tanzania later this month. It will also open two offices in the region and set up service support infrastructure, he said.
Escorts, which entered the Moroccan market in April, also sells in other African nations such as Senegal, Sudan, South Africa and Madagascar.
“Africa is a very important market for us and one we would like to grow in terms of numbers,” Nanda said.
Escorts has earmarked around Rs600 million as capital expenditure for its fiscal year ending 30 September to ramp up its tractor business, which accounts for about three fourths of its total revenue.
“A large chunk of our tractor sales still comes from the domestic market. Now with the monsoon being normal I do expect the market to continue to grow,” though the growth may not be as high as what was seen in the first six months, he said.
For the quarter ended 31 March, Escorts’ net profit surged to Rs414.7 million from Rs78 million a year ago. Its net sales rose to Rs672 crore from Rs480 crore.
Escorts also makes construction equipment, auto parts and railway components.
The firm supplies railway components, mostly in India at present, and is in talks with some European firms to expand its offerings in the continent, Nanda said, without disclosing more details.
“Some export markets are also opening up for railway products and we are looking at them...as we move into the next fiscal Escorts is definitely enlarging its product portfolio,” he said.
Escorts is also looking to marginally raise tractor prices to offset an increase in prices of key raw materials.
“We are discussing internally and we do believe in the next 3-4 weeks there would be a slight increase. But I cannot say right now to what extent,” Nanda said.
India’s auto industry has seen an unprecedented boom with record sales seen in May but many top firms have warned of margin pressures due to rising input costs.
Late last month, Indian truck and bus maker Ashok Leyland raised the prices of its medium and heavy trucks by about 3% to recover the increase raw material costs.
At 3:00 p.m., Escorts shares were up 2.8% at Rs198.05 in a firm Mumbai market.