Italian farm equipment maker Same Deutz-Fahr (SDF) Group is expanding its product range in the Indian market, for which it is mulling either setting up of a fresh plant or acquiring or partnering a local firm to expand production capacity.
The group is also working to introduce combine harvesters in the Indian market to gradually strengthen its foothold in the farm equipment segment.
"At present, we sell tractors in the 40-80 horse power (HP) range. The plan is to get to 30-35 HP at the lower end and 80-100 HP at the upper range," SDF India Managing Director and CEO Bhanu Sharma told PTI.
With the expansion of the range, specially at the lower end, he said volumes are bound to grow and the company has already started feasibility study to add fresh capacity.
SDF India currently produces tractors and engines from its plant at Ranipet near Chennai. Out of the four brands -- Same, Deutz-Fahr, Lamborghini and Hurlimann -- that the SDF Group has, it sells only the Deutz-Fahr brand in India.
"Once we get into the below-40 HP range, it will give us volume. We should be able to scale up from 2,000 units per annum to 10,000 units fairly quickly in the first phase. In the next three years, we should reach 20,000 units of tractor production in India," Sharma said.
Last year, the company had rolled out 6,000 tractors, out of which 2,000 were sold in domestic market and 4,000 were exported. It currently has a capacity of 15,000 tractors per year from the plant in double shift.
"When we reach production of 20,000 units, our expectation is that both the domestic and export volumes will be 50:50," he said.
On the company's plans for capacity expansion, he said: "Our preference will always be to go on our own. Setting up a fresh plant near our current facility is one of the options."
Considering SDF's history of acquisitions, Sharma said: "It (acquisitions) could also be an option in India or a partnership with a local firm to get ready made capacity could be considered but that would depend on many factors and availability of the right target."
When asked about investments for SDF's planned expansion in India, he declined to comment, saying the company is a privately held firm.
At present in India, the company sells Deutz-Fahr tractors in seven states, including Punjab, Tamil Nadu, Maharashtra and Karnataka.
Sharma said the SDF India's immediate focus would be to penetrate deeper into these seven states before expanding to other states.
"By 2014, we are looking at entering new states-- Gujarat, Bihar, West Bengal and Rajasthan," he said.
On plans to introduce combined harvesters, he said: "Farm mechanisation is bound to grow in India and we see a huge potential. We can adapt our products to Indian requirements and we will introduce our products here."
The group is also planning to make India its global production hub for engines within the next three years and will move its global tractor engine production from Italy and Germany to India. It would soon decide whether to expand the Ranipet plant or a new location would be set up for producing the engines, that would be supplied to SDF's plants across the world.