Sonalika International plans major
expansion in Africa
TRACTOR MAKER KEEN ON ADDING TWO NEW ASSEMBLY PLANTS
TO THE EXISTING FACILITIES AND TAP POTENTIAL IN THE DEVELOPING CONTINENT
NEW DELHI 20th March 2014: In
the view of Indian of an annual export of 6,000 tractor units to Africa, tractor
manufacturer Sonalika International is planning to add two more
assembly plants to build on the three existing facilities they have
in Africa in order to tap the potential of the huge unutilised arable
land bank of the 54 nation continent.
"We are planning to add another two assembly plants by
this year. All Indian, Chinese and European tractor
brands are present in Africa but Indian products are the most adaptable for the
Terrain. It is important to engage companies and governments alike in
agriculture therefore we are looking at
options in South Africa and in the East African countries" Rajiv
Wahi, senior president, international business,
International Tractors Ltd, a Sonalika Group Company, said.
With the three existing assembly plants in
Cameroon, Nigeria and Algeria, the investment needed to set
up any assembly plant depending on the capacity, volume and
localisation would be between $5 million and $20 million. Being
nine times the size of India, the African continent still has 60
percent of unutilised arable land. It still depends on very
basic agricultural methods and a net importer of
agricultural products.The African continent needs 100,000 tractors
with a deficit of 70,000 tractors. India has the pioneering position in
the tractor industry in Africa due to cost and durability factors
In agriculture, Africa is today where India was 30 years
back. Our knowhow and expertise are very relevant for Africa.
In the early 1970s, India's tractor market was around 30,000 - 40,000 annually
and during that time India was a net importer."
Sonalika Tractors, which started exporting to Africa 11
years ago, is now present in around 30 countries on the continent.
The decision to set up new assembly plants in Africa is part of the company’s
strategy to ace in the available market segment. The African terrain is very
similar to Indian climatic conditions and hence makes an apt adapting
environment for Indian Products. Africa has similar
fragmented land holdings as in India. Ninety percent of tractors are based in
five countries South Africa, Algeria, Morocco, Tunisia and Egypt in a continent
of 54 nations. These countries have more than 20,000 tractors. The rest of the
countries have only a couple of hundreds.