Chandigarh, June 18 Just over a year after acquiring majority stake in Punjab Tractors Limited, country's leading tractor maker Mahindra & Mahindra today said it expects to start manufacturing the Mahindra brand at PTL's plant in Punjab during this financial year.
"We are expecting that we would commence manufacturing our tractors at PTL's plant during this fiscal itself," Anjani Kumar Choudhari, President, farm equipment sector, Mahindra & Mahindra said.
The company would make some investment in the assembly line of the PTL plant to produce the Mahindra brand. "We will have to spend on fixtures of the assembly line in order to make our tractors," he said without disclosing the amount.
PTL has at present a total installed capacity of 60,000 units per annum but it is producing just 28,000 tractors from this facility.
Mahindra & Mahindra had recently deferred its plans to build a tractor facility in Chennai.
It had bought majority stake in PTL in June last year for Rs 1400 crore and holds 64.64 per cent stake.
Choudhari, who is also the Chairman of PTL, also said the company would soon raise the prices of its tractors.
"The input cost per tractor has increased by 10,000 to 12000 and it has made difficult for the tractor producers to absorb the entire cost. That is why we have decided to increase the prices soon," he said, without disclosing the amount and time frame.
Sharing the details regarding stupendous growth achieved by PTL after the acquisition by Mahindra & Mahindra, he said the PTL has been able to improve its receivable amount to Rs 281 crore in 2007-08 from Rs 504 crore in 2006-07. "Similarly, the dealer's stock of the PTL has come down to 3421 units in 2007-08 from 11610 units in year ago period. Moreover its productivity has increased from 40 tractors per shift to 52 tractors in 2007-08," he said. He further said decline in the market share of PTL has also been restricted to 9.1 per cent against growth of 13.2 per cent in 2005.
Talking about PTL's performance in this fiscal, he said the company has registered 78 per cent growth in last two months of April and May. The company sold 5,511 tractors in April and May as compared to 3,090 tractors sold in corresponding period of last fiscal.
Chaudhary also ruled out the possibility of making any fresh investment into PTL but he said that it would invest Rs 32 crore in Swaraj foundry for increasing its capacity to 25,000 tons per annum from 10,000 tons at present.
He said the Indian tractor industry is expected to grow at 5 to 8 per cent this year on the back of increase in rural credit.
Last fiscal, tractor industry in the country observed a negative growth of 5 per cent and producing 3.02 lakh tractors compared to 3.18 lakh units in 2006-07. PTI
Mahindra plans to manufacture tractors in PTL's plant
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