ITL to invest Rs 300 cr in expanding tractor unit

Hoshiarpur-based International Tractors Ltd (ITL), the flagship brand of the Sonalika group (manufacturer of Sonalika-brand tractors), will introduce 120-HP four-wheel-drive tractors in the domestic market next year.

Also, the company is planning to infuse Rs 300 crore for doubling the production capacity at the existing units in Punjab.

Speaking to Business Standard, ITL Vice-Chairman A S Mittal said: "Next year, most probably by May or June, we will introduce 120-HP tractors."

At present, ITL manufactures tractors with the Sonalika brand, 30-90 HP. Also, the company is working on modalities to introduce tractors of 90-120 HP. The Sonalika group ranks third in the country in sales.

Apart from power, one of the attractive features of the new model is price. While the imported models cost Rs 12-18 lakh, the 120-HP-powered engine of Sonalika will cost Rs 5-8 lakh. The company has tied up with CLASS of Germany and Renault of France for the supply of high-powered tractors.

Commenting on demand for these high-powered tractors, Mittal said, "In the domestic market, we will launch these tractors keeping in mind firms that are venturing into contract farming in a big way and are also progressive farmers, and for export. As Reliance, Bharti, ITC, etc are venturing into contract farming, there would be great demand for high-powered tractors in the domestic market."

On expansion plans, he said: "We are planning to invest Rs 300 crore for doubling the production capacity at the Hoshiarpur plant, to be invested in phases. At present, the capacity of the plant is 50,000 tractors per annum."

"In spite of ups and downs in the market, we are witnessing a growth rate of 30 per cent annually. So, in order to meet the demand, we are expanding our production facility," he said.

In the last financial year, the turnover of the company was Rs 986 crore, of which exports contributed 6 per cent. "The same growth will take place in this financial year also," he said.

In the next two years the company is hopeful that export will contribute 20 per cent of the turnover. At present, the company exports to South Africa, Zimbabwe, Latin American countries, Canada, the US, France, Australia, Sri Lanka, Nepal Bangladesh, etc.

"Apart from expanding our current capacity, the company has plans to put up a production plant, most likely in Gujarat, Andhra Pradesh or Maharashtra," he said.

3i, Citibank and the Yanmar Group (Japan) hold a 10 per cent, 10 per cent and 12 per cent stake, respectively, in ITL.