TAFE to recast strategy for sub-20 hp play

Hopes to increase share of exports to 20 per cent in the next three years from the current 10 per cent

February 06, 2014 12:14 am | Updated May 18, 2016 06:13 am IST - CHENNAI:

Mallika Srinivasan

Mallika Srinivasan

Tractor maker TAFE (Tractors and Farm Equipment Ltd.) is looking to recast the “strategy” for Captain Tractors, keeping in mind the company’s current brand identities and quality standards, according to Chairman Mallika Srinivasan.

In 2012, the $1.6-billion TAFE announced its entry into the sub-20 hp (horse power) segment through a strategic alliance with Rajkot-based Captain Tractors Private Ltd (CPTL).

According to the arrangement, CTPL designed, developed and manufactured compact tractors in the sub-20 hp segment for TAFE. TAFE would then be the sole distributor of the tractors produced by Captain.

“Well, we are actually thinking we need to recast. We believe it is a good market niche. It is a long-term play. But we need to … keeping in mind our quality standards and our value proposition to our customers… we would like to recast our strategy in that direction,” Ms. Mallika Srinivasan said in an interaction on Wednesday.

When asked whether a recast indicated that the strategy had not worked, she reiterated TAFE’s commitment to the particular segment.

“We think it can be better for us, and, therefore, we are recasting it. It is too early to say how we will recast. But keeping with our current brand identifies, we would like to recast to reflect that,” she said.

The company’s export strategy has also started paying good rewards, becoming a “differentiating story” for TAFE.

“Exports for the overall industry were marginally down, around 2.4 per cent, until December. This trend was no different in January. But if you look at our exports, we grew it around 23 per cent. So, this has been a differentiating story for us, and also a counter-cyclical force to the downturns in the domestic market,” she said.

She cited a combination of factors ranging from rupee depreciation to deeper penetration and significant forays into newer markets for a `sustainable export’ performance.

She asserted TAFE was giving lot of thrust on emerging markets.

To a question, she said TAFE was hoping to increase the share of exports to 20 per cent in the next three years from the current 10 per cent.

Though there was no structural change in land ownership, Ms. Srinivasan said series of favourable factors such as good monsoon, sharp rise in labour cost, rising aversion to certain kinds of jobs had gone to support the cause of farm mechanisation, helping the domestic tractor industry.

Fielding a range of questions, she said TAFE was looking closely at farm implements.

In fact, TAFE had already set up a new vertical for application business. ``We want to offer wider range of products relevant to farmers,’’ she said. The focus, she said, was to “promote eco-friendly farming”.

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