Foreign farm equipment companies eye Indian market

PUNE: Foreign farm equipment manufacturers are taking a closer look at the Indian market at a time when rural economy is thriving and farmhands are difficult to get while use of technology is very limited. Lemken, the German farm equipment manufacturer, will inaugurate its first manufacturing facility outside Europe at Nagpur this month. Italian farm equipment manufacturer Maschio Gaspardo recently set up its manufacturing unit at Ranjangaon near Pune.
Industry sources say that at least two to three foreign companies are likely to set up manufacturing units in India in the next three to four years, bringing in an investment of about 700 crore. The 3,000-crore Indian farm equipment sector is largely concentrated in the unorganised sector.
The use of non-tractor farm equipment in India is still very limited, which is why Indian farm mechanisation is called as tractorisation. Mahindra, the leader of the 26,000-crore Indian tractor market, has its own manufacturing of farm mechanisation solutions.
Lemken has only assembling plants in China and Russia. The Nagpur plant has a capacity to manufacture 3,000 units in a year in the first phase. "With the expansion of the second phase, the capacity will increase to 5,000 units a year," said Lemken India Agro managing director and chief executive officer Arvind Kumar.
The company has invested Rs 60 crore on the first phase and plans an equal investment in the second phase. Lemken will import the special steel required for its implements. The equipment manufactured in India will be 40% cheaper than those made in Germany.
Demand for farm equipment is growing in India because of a robust rural economy, government subsidies, farm labour shortage, improved availability of farm credit and custom hiring.