The Gujarat government plans to privatise the public sector Gujarat Tractors by divesting 51 per cent of its stake to a private entrepreneur.
Interested private parties are required to submit a technical bid by January 31. A F Ferguson, the consultancy and accounting firm, is advising the state government on the privatisation move. Gujarat Tractors produces tractors in the 25-50 HP range and its two main products are the 35HP and 50HP tractors. The 50HP tractors are very popular with the Indian market, industry sources said.
The unit has a technical collaboration with Zetor Tech of the Czech Republic. In the eighties, the state government had taken over the unit from a private entrepreneur and was managed by the Gujarat Agro Industry, till a workers co-operative took over the management 6-7 years back. The plant located near Vadodara currently produces only 100 units per month, or 1,200 tractors per year though its annual capacity is between 10,000-12,000 tractors.
The company has been facing problems due to sluggish demand for small tractors recently due to adverse excise duty structure.
A big tractor faces 10 per cent excise duty while the levy is 18 per cent for the small avatar. Thanks to this situation, the market for small tractors with engine capacity of less than 1800cc is expected to shrink to 15 per cent from 40 per cent in 1992-93.
The tractor market is currently dominated by Mahindra and Mahindra which has a 27.7 per cent share followed by TAFE with 18.7 per cent, Punjab Tractors Swaraj with 13.67 per cent, Escorts with 11.05 per cent, Eicher with 11 per cent, Ford with 8.86 per cent and HMT with 8.35 per cent.
