Bengal Tools to import & sell Chinese harvesters

UCO Bank to give zero margin finance

The lure of Chinese products is proving too strong to resist for new companies, which see the import and sale of Chinese goods as the best way to start up a new business.

In keeping with this trend, Bengal Tools Ltd (BTL) of Shrachi group is planning to diversify into agro harvesting machinery business using Chinese imports.

The managing director of Shrachi group Ravi Todi said he would be visiting China in end-April to identify a joint venture partner for new products.

Bengal Tools currently has a strong presence in the agricultural equipment market through its power tillers.

The company manufactrures power tiller in collaboration with Zhejiang Sefang of China, one of the leading power tiller makers in the world.

Bengal Tools has tied up with UCO Bank for easy financing of its power tillers.

Todi said BTL would tie-up with a Chinese outfit for new products like agricultural harvesting machinery.

"BTL is in talks with several Chinese companies for tie ups and I am hoping this will be finalised soon," he said.

He made it clear that the tie-up for the new products will be with a new partner and not with the existing partner Zhejiang Sefang.

BTL will import the new products from China in the first phase.

Once the market had been developed, BTL would start manufacturing the new products.

The company currently has two manufacturing facilities - in Dumdum in West Bengal and Bangalore.

Commenting on the financing tie up with UCO Bank, Todi said the alliance would help BTL increase its share in the power tiller market.

The company currently has around 25 per cent market share in 17,000 power tiller per anum Indian market.

It is aiming to grab 30 per cent marketshare through the tie-up.

UCO Bank will finance the power tillers sold by BTL with zero margin money and a repayment period of 7-9 years.

"UCO shall extend credit at 9 per cent, which is 2 per cent below the prime lending rate besides offering a six-month to one year moratorium on payment," a bank official indicated.

The chief executive of the agro division of BTL, S K Nag, said that the company had sold 2000 power tillers in 2004 and was hoping to sell 2,500 in the current year.

The company posted a turnover of Rs 50 crore in the last fiscal, out of which Rs 20 crore came from the agricultural equipment division.