M&M expands overseas tractors and farm machinery business
Mahindra & Mahindra (M&M) is expanding the international play for its tractors and farm machinery business, targeting to earn 50% of the revenues from the overseas market in the next 2 years.
The world’s top tractor maker by volumes is also open to more acquisitions to expand its reach and product capabilities.
Rajesh Jejurikar, President and Chief Executive, Farm Equipment & Two-Wheelers said that “We would like to see ourselves move from being a domestic tractor maker to a global farm machinery company beyond tractors.”
The company was looking at acquisition opportunities as a part of its overall game plan for the business, said Managing Director Pawan Goenka. The global farm equipment market is estimated at USD 156 billion of which tractors is only USD 60 billion.
He added that “There is a large global opportunity outside tractors and we would like to take advantage of it.” Currently, tractors bring in about 85% of the sales for the business, while the rest is from farm machinery. The company’s target is to bring down the share of tractors to 79% by FY-19.
“We can’t globalise by being everywhere. We have identified a few top markets where we would like to be present through manufacturing or sales and distribution set up. These markets are North and South America, China, Japan and Turkey, where we already have on-ground presence.” Jejurikar said the company’s recent acquisitions will aid its globalisation initiative.
Japan’s Mitsubishi Agriculture Machinery, with its range of rice transplanters and harvesters will help M&M address the requirements of the global rice value chain. The others are Finland’s Sampo Rosenlew and Turkey’s Hisarlal, with strength in the soil preparation area.
Jejurikar said that “We would like Sampo to be the base for harvester product development and centre of excellence.”
Turkey is a large market for tractor and farm machinery, pegged at around USD 3 billion. Hisarlal, said Jejurikar, will provide a good reach to M&M.
He added that “It creates a base for us to introduce our tractors using the good distribution structure that Hisarlal brings to us. It will allow us to access markets in CIS and parts of the Middle East.”
The company is also building base organically in Brazil and Mexico. In Brazil, M&M has set up a factory in Porto Alegre from where it plans to launch new portfolio of tractors. It is already sourcing about 60% of the parts locally.
Tag Keyword: Mahindra & Mahindra , Tractors , Farm Machinery Business , Overseas Market