Eyeing growth in the farm equipment sector under the government's plan of doubling farmers incomes' by 2022, International Tractors Limited (ITL) is consolidating its portfolio of tractors and farm equipment by introducing two new brands - Solis and Yanmar. The two brands will sell alongside ITL's domestic tractor brand Sonalika, which already is among the top 3 tractor brands in India.
While Solis is ITL’s existing tractor brand limited to the export markets, the Yanmar range is being built by the company under its partnership with Japan’s Yanmar Agribusiness Company Ltd. Latter are also 30% equity stakeholders in the Punjab-based ITL, which recorded turnover of more than ₹5,400 crore in FY19.
As Solis and Yanmar make their foray into India’s farm equipment industry with their complete global range, ITL has been making and exporting tractors sold in the foreign markets under the two brands. The company began exporting Solis tractors since 2011 and has exported the same to over 120 countries.
Talking to Mint, Raman Mittal, executive director, ITL said, “These tractors were already produced in India but weren’t available locally until now. ITL makes tractors for Yanmar’s global markets. But this is the first time when next generation Japanese tractors are being built in India. These will be exported to USA, Europe and are also configured for the Indian farming needs."
ITL plans to sell 50,000 units under its Solis and Yanmar brands in the next 5 years on the back of a separate retail network of 400 dealerships, which it plans to set up in 2 years.
With Sonalika, Solis and Yanmar brands in its portfolio, ITL is gunning to become the second largest tractor player in India in the mid-term. The company is number three player after Mumbai-based Mahindra & Mahindra (M&M) and Chennai-based Tractors and Farm Equipment Limited (TAFE).
“With Solis and Yanmar coming into India, we are definitely gunning for the number 2 position. However, our bigger objective is to achieve annual tractor sales of 200,000 units in another 4 years from now. If we do this, the number two position will follow," said Mittal. ITL recorded total sales of 114,000 units in FY19, growing 14% year-on-year.
While ITL’s Sonalika portfolio has over 51 models in the 18hp-110hp range, the company said it is preparing more than 40 models under the Solis and Yanmar brands, all to be launched in FY20.
“So both ranges would be equally sufficient and will cover the whole spectrum," he added.
ITL’s manufacturing facility at Hoshiarpur, which it dubs as the world’s largest tractor plant, has annual production capacity of up to 300,000 units. Of this, while the capacity of 200,000 units is allocated to Sonalika, 100,000 units can be produced under the Solis and Yanmar brands put together.
According to Mittal, bringing the Solis and Yanmar range to its domestic portfolio won’t cannibalize the Sonalika products. “These are all completely different tractors. For example, Yanmar tractors are lightweight and are purpose built for paddy fields. Meanwhile, Solis tractors are more versatile in bringing in new implements to enhance productivity on the field. They offer specific applications in potato and sugarcane farming. Solis products are also good for orhards," he added.
Mittal, who remains optimistic about India’s potential in the tractor industry, said the need to enhance productivity and ground water depletion leads to necessary adoption of farm mechanization. He suggested that although the current slowdown is cyclical, government’s agriculture and infrastructure push coupled with good monsoon can generate tractor demand. He expects the industry to see revival September – October onwards.