Mahindra to make rice harvesters

Mahindra Farm Equipment Sector (FES), which has established itself as a dominant player in the tractor segment, is expanding its portfolio by offering allied services as well.

FES has tied up with Mitsubishi Agricultural Machinery (MAM), a unit of Japan’s Mitsubishi Corp, to sell rice transplantation machinery in India.

Under the alliance, MAM will provide the technology and the product will be sold under the Mahindra brand name. This alliance will take forward M&M’s rather small presence in this segment. FES inherited the harvester business from Punjab Tractors Ltd (PTL) following the latter’s acquisition.

Anjani Kumar Choudhary, president, FES, said, “When we inherited the business from PTL, the company under the Swaraj brand was selling only about 100 harvesters and had a turnover of only Rs 12 crore, with 1.2% contribution to the total revenue of FES.”

Choudhary said through this alliance the company in the initial phase plans to sell about 1,000 harvesters a year, and in 2-3 years take it to 5,000 units a year, increasing the revenue contribution to about Rs 100 crore, or 10% of the FES revenue.

The harvester will be priced at Rs 1.75 lakh and sold through FES’s 1,200 dealerships. The product will be manufactured at company’s Nagpur plant.

With an investment of about Rs 15 crore, the company will first sell only rice harvesters and then expand it to other crops.  Gautam Nagwekar, chief operating officer, FES, said, “We also have an informal buyer-seller relationship with a German company, which makes sugarcane harvesters. We will in future also get into a formal alliance with them as their product can be modified to suit other crops as well.”

The alliance is not just restricted to making harvesters but MAM, which also makes compact tractors, and FES may also work together is making smaller tractors for the Indian market, said Toshiaki Shimzu, president, MAM, said.

FES already has a nano tractor of 15 BHP - Yuvraj. MAM makes compact tractors for M&M, which the latter sells in the US market under the Mahindra branding.

The alliance also plans to export the rice harvesters to China and Saarc countries. However, since FES already has two joint ventures in China, Choudhary said they will over a period of time manufacture the product in China itself using the existing facilities that the company has with its JV partners.

After establishing itself as a serious player in the Chinese market, FES is looking at Latin American markets to get some share in the tractor segment there.

“The Latin American markets are not as big as the Chinese one, but we are trying to get the feel of these markets and have already set up distributors in Brazil, Columbia and Venezuela. One never knows how rapidly these markets will develop and then we would forge alliances there as well just the way we did in China,” Nagwekar said.