Even as it bucked the falling trend in industry sales, the world's third largest tractor maker Tractors and Farm Equipment Ltd. (TAFE) has embarked on capacity expansion.
The flagship company of the Amalgamations Group, the over Rs.8,000-crore TAFE, would invest around Rs.100 crore in a project at Madurai where it already has another plant.
Addressing a press conference here on Tuesday, Mallika Srinivasan, Chairman and CEO, said the proposed facility would make high horse power tractors and aim at global customers. It would have a capacity of 60,000 tractors a year. The project would go on stream in the middle of next year, she added.
The present production capacity of its plants (both TAFE and Eicher put together) is 1.80 lakh tractors a year. This would go up to 2.40 lakh tractors once the expansion at Madurai went into operation fully, she pointed out.
Fielding a range of questions, she said TAFE would also make an additional investment of Rs.25-30 crore in its Turkey plant for value addition. The Turkey unit had a capacity of 15,000 units and was selling 4,200 units at the moment, she pointed out. “Turkey is a good location as a hub for international markets,” she added.
She termed 2011-12 a ‘landmark year' for TAFE. “I am cautious about the industry but bullish about ourselves,” she went on to add, on the prospects for this year. Notwithstanding the near-term irritants, her optimism over medium-term prospects was based on the structural changes happening quietly on the farm front, she said.
In this context, she pointed to the all round improvement in key numbers for TAFE in the just-concluded financial year in the face of extreme poor show by the industry.
TAFE reported a 30.4 per cent growth in consolidated revenue to Rs.8,020 crore for the year ended March 2012, up from Rs.6,149 crore in the preceding year. Tractor sales increased by 26.6 per cent to 1.48 lakh units (1.17 lakh units) for TAFE as against an estimated industry sale of 6.07 lakh units at a growth rate of 11.4 per cent. Significantly enough, TAFE clocked an average growth of 28.58 per cent during November-March 2012 while the industry reported a meagre 0.66 per cent growth during this period.
While the industry as a whole witnessed a robust growth in April-October 2011 at 19.8 per cent, TAFE grew by 26.9 per cent. The industry began to slide since then. However, TAFE reported remarkable sales month-on-month.
In the process, the company gained 3 per cent market share, she pointed out. On the export front, too, TAFE held its own with a market share of 28.77 per cent. Shipping to 73 countries, TAFE breached the Rs.1,200-crore overseas revenue last year. It exported 20,396 units last year. Ms. Mallika Srinivasan predicted that the industry would grow at around 8-10 per cent in the current year.
Close to 68 per cent of revenue for TAFE came from products that were launched in the last three years, she said. Emphasising the need for launching right products for the market, she said, “our growth has been pan-India and across markets and segments.”
She also announced the launch of MF 9500, a 55 hp tractor, along with a host of others.
She insisted that the alliance with Captain Tractors would help TAFE complete the range of products since these were below 20 hp special purpose tractors.
