Millat Tractors Ltd

HISTORY OF MILLAT TRACTORS

Millat tractors Limited (MTL) was established in 1964, to
introduce and market Massey Ferguson (MF) Tractors in Pakistan. An
assembly plant was set up in 1967 to assemble tractors imported in semi-
knocked down (SKD) condition.
In 1972, the company was nationalized under Economic Reforms
Orders and renamed as Millat Tractors Limited MTL started
assembling and marketing tractors on behalf of Pakistan Tractor
Corporation( PTC) which was formed by the Government for import of
tractors in CKD condition. In 1980 and entrusted this task to PTC.
In 1981, PTC transferred this role indigenization to MTL. This was
the turning point in the companys history and it went about the task
methodically and rapidly. The companys history and it went about the
task methodically and rapidly. The company undertook this new role with
enthusiasm and in the spirit of national development and proved its
engineering capabilities by surpassing the deletion targets set by the
Government.
In 1982, MTL took a giant step towards self-reliance by setting u
the first engine assembly plant in Pakistan. The company made strategic
decision right in the beginning to bring those manufacturing facilities in
house for which capabilities did no exist in the country and for parts
which required high investment and precision. Therefore, in 1984,
sophisticated manufacturing facilities for the machining of intricate
components were set up. These were previously not available in Pakistan.
Currently, critical components like engine block, hydraulic lift cover,
front axle support and center housing are being machined successfully in
house at MTL from local sourced castings.

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At MTL we firmly believe that producing of international quality

standards is the key to our continued success and growth and the quality
control department converts this belief into reality.
In 1992,the company was privatized, and the employees joined
hands and took over its management by winning an open bid.
To maintain its leadership role in tractor manufacturing in the
country, MTL continues to look towards future, to identify and exploit
new opportunities and t consolidate the existing ones. The new tractor
Assembly Plant is part of this philosophy. This plant started its production
in 1992. The establishment of this modern plant not only increased
production capacity to 16000 tractors per year on a single shift basic, but
also provided a quantum jump to the quality of the assembled tractors and
pushed MTL into ranks of the major tractor manufacturing companies of
the world.
In 1993, MTL acquired the management control of Bolan Castings
Limited (a public limited company specializing in intricate automotive
casting), in partnership with employees of the company.
The Company looks to the future with optimism and plans to
broaden its customer base. Consequently the opportunities are being
explored in multiplication of engines and tractors in areas other than the
farming sector. Mass production of generation sets was started in 1994,
while a 3 ton forklift Truck branded as Millat, based on TCM technology,
was launched in the year 2002. Both of these products are mad by using
Perkins engines and have been well accepted by the market.
In 2002, MTL established a wholly owned company named Millat
Industrial Products (Pvt) Limited to manufacture quality automotive
batteries.
There is a constant endeavor at all levels of the organization to
better the companys performance by offering upgraded ranger of its

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products and services. Our technological collaboration with AGCO

Limited UK, Perkins Engines Limited UK, and M/s Anhui Heli Co. Ltd.
China, has been of great help in updating technology levels and
introducing new models.
The company has been the regular recipient of the Corporate
Excellence Award of Management Association of Pakistan and the top
Companies Award o Karachi Stock Exchange since early eighties. MTLs
Annual report has been acknowledged as the Best Annual Report by the
institute of Chartered Secretaries and Admin Association of Pakistan for
several years.
The employees of the company, continue to work with full zeal and
motivation to further improve performance standards. We are confident
that the company will keep marching forward in service of the nation and
the valued customers.

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INTRODUCTION OF MILLAT TRACTORS LIMITED

Millat Tractors Limited (MTL), an over Pak. Rs. 5.5 billion company, is
ISO 9002 certified for its operations has been a regular recipient of Top
Company and Management Excellence awards. The leading
engineering concern in the automobile sector. MTL manufactures a range
of Massey Ferguson (MF) tractors under technical collaboration with
AGCO of USA (Massey Ferguson Ltd. U.K.) and diesel engines with the
caterpillar USA (Perkins engines, U.K.), Diesel generating sets only.
Recently, an agreement for technical collaboration has also been signed
with. Anhui Heli of peoples republic of china for manufacturing of
forklift trucks.
The company founded in 1964, the company was acquired by its
employees in 1992 with 51% share holding. subsequently, the company
also acquired Bolan casting Limited, one of the largest foundries in the
country. Over the years, the company is maintaining a wide field network
spread all over the country. Its tractor dealers are 69,46 spare parts dealers
and 312 lone shops.
So the company has spread its products throughout the length and
breath of the country.
Today the population of MF tractor made by MTL exceeds
250000 while the total member of tractors in the company is
approximately 500,000. Every second tractor in Pakistan is a MF tractor.
This achievement has been made possible only through the
companys commitment to quality, after sale service and its human
remorse development.

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MANAGEMENT HIERARCHY AT MTL

Organization Hierarchy

Chairman & Chief

Executive

Company Secretary

Dy. Managing Director Dy. Managing Director

(Tech & Admn) (Fin. & Management)

Chief Gen. Manager Gen. Manager Sr. Manager

Financial Projects Dev. Gen. Manager Maintenance
Officer Admn. Pur

Chief Director
Financial Marketing
Officer

Gen. Manager Manger HRD Manager

O. C. internal Audit

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At MTL, there is centralized decision making process. Documentation

procedure is formal e.g. in case of providing after sale service (warranty /
replacement) for defective parts the procedure is as follows:
Customer goes to dealer and tells the problem.
Dealers replace the parts from his inventory and afterwards fills the
claims form and takes the collective defective parts to the Millat
Tractors Limited.
MTL inspects the part and then either replaces part to the dealer or
credits the balance to dealers accounts.

For the extra ordinary problem or defect the claim procedure is different
and as follows:
Customers go to dealer and tells the problem.
Dealer sends a notice to the Millat Tractors Limited and then a
team from MTL visits the tractor and then decides whether to
improve the claim or not.
If the claim is accepted then the part is sent to the dealer for
replenishment.

DEPARTMENT AT MTL
In order to have maximum efficiency, Millat Tractors Limited functions
are very structured. The division of work and labor is done in a very
designed manner and all the work requirements have been distributed
properly among the various departments.
Every department fulfill its own requirements and done its own work.
There are following department on Millat Tractor Limited.
Human resource development and training department (HRD)
Marketing department

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Administration department
Finance department
Auditing department
EDP (electric data processing) department

A hierarchy exists in each department and the functions of the department

flow in that particular cadre, whether they are flowing from top to bottom
or from bottom to top. Some departments have further sub-departments as
well, like marketing is the biggest department of MTL, so it has 7-sub
departments. Similarly, sub departments exist in administration
department.

MANAGING EMPLOYEES AT MTL

Total number of employees are 1000, among them 185 are executives,
workers are 815, engineers are 74, qualified accountants are 8 and MBAs
are 16.
Once it hires employees, it does not fire them because of hiring cost and
image will hurt. MTL hires employees on basis of following factors.
Nature of job
What skills required to satisfy the job requirements.
What market is paying to them.

In order to motivate the employees they offer reward system just like
production bonus scheme and profit sharing planes.
There is also promotion system at MTL. Employees are promoted on the
basis of job duration. They are not promoted before 5 years. But if
employees show extraordinary performance then 1st their performance is

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classified into 3-categoreis such as A category, B category and C

category then special increment is there in their salaries.
MTL follows knowledge base approach. According to it, it trains and
educates the employees via different training programmes. So, MTL
initiates different in-house and outside the house training programmes. In
house training programmes include, employees do the different job
(especially marketing personnel) related courses from Lums and IBA.
MTL also sends employees abroad, human resource department also
conduct seminars regarding production department. Through these
seminars labor force is trained to reduce the rejection rate and to
successful implement the TQM system. At MTL annual functions and
parties are arranged and employees are given annual and weakly leaves
(2- leaves in a weak) in order to reduce their boredom and frustration
level. free lunch is provided to them., Free of cost medical facility is also
given to them.

PRODUCTION PLANT
There is only one production plant located in Lahore. Its working
capacity 70-120 tractors per day.

PRODUCT LINES
MF 240 (50 hp) Tractor
MF 260 Turbo (60 hp) Tractor
MF 375E (75 hp) Tractor
MF 385 (85 hp) Tractor
MF 385 4WD (85 hp) Tractor
Generating Sets (15-42 KVA)
Prime Movers
Forklift Trucks (3-Ton Capacity)

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A range of agriculture implements.

STRATEGIC BUSINESS UNIT

Among the above mention product generating sets forklifters and
prime movers are generating high profits. These products have less
market share but have the more opportunity for market growth. So
on the basis of these qualities we can categories as the problem
child.
Local manufacture of agricultural implements erodes its
profitability in agricultural implement. These products have the
low growth market and low market share so we consider these
products as dogs.
Tractors are consider to be as the stars on the basis of high market
share and high market growth.

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HIERARCHY OF STRATEGIC INTENT

Vision
Millat to be global group of companies, recognized for a range of quality
products with innovative design capabilities.

Mission Statement
To be market leader in agricultural tractors and machinery building
companys image through innovation and compositeness, grow by
investing into group of companies, ensuring satisfaction to customers and
stakeholders and to fulfill social obligation.

Proposed
Vision : vision of Millat Tractors should be:
1. To improve and maintain the leadership position
2. Millat Tractors Limited is dedicated to provide quality innovative
products with the best package of guaranty and warranty for its
customers when ever they are
3. To make Millat Tractors as leaders all the way
4. we can here to better serve our customers with the best quality and
diversified range of products providing best after sale service as
well.

Proposed Mission Statement

Mission Statement of Millat tractor should be:
To retain and improve Millat Tractor good will, profit ability and
market leadership by manufacturing the quality Tractors and machinery
and making human capital more committed, productive and efficient.

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GOALS AND OBJECTIVES

Goals
Establish dealers network all over Pakistan to ensure the
availability of their products.
To completely satisfy the customers
Manufactures farm equipment and other engineering goods that
conform to the specified standards to enhance farm mechanization
for achieving self-sufficiency in against agricultural products,
saving of foreign exchange and developing technical and
engineering capabilities in the country.
Ensure customer satisfaction by providing quality products at
competitive prices with the warranty coverage and ensuring after
sale service.
Constantly endeavor to be market leader in terms of market share
and technology pace-setters in area of operations and to
continuously improve efficiency and competitive strength.

Objectives
By continuously improving performance, aim to generate earnings
sufficient to ensure a secure future for the company and to produce
and increase shareholders return.
To enhance creativity and job satisfaction, provide employees
opportunity for personal development.
A company went to exercise a 50%-55% sale in coming fiscal
year.
But according to Millat tractors these objective vary from year to year.

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TARGET SETTING AT MILLAT TRACTOR

Millat tractor limited held monthly and annual based meetings to set the
targets. There are different types of targets just like, production related,
import related, supply related, quality maintenance, delivery, finance,
manpower related targets. proper budget is allocated to achieve these
target. There are some factors which considered at the time of setting
targets.
What is the current sale level and what it was in past?
What is companys current profit level and what it was in past?
What is the companys current growth and what it was?
Business success and failure.
How many complaints company receive and among these how
much it accept.
Also consider how much time and cost it will take?
There are two-way communication in order to set the targets. In this
communication session two parties are involve. Top management and
middle management . These targets are split in different targets and
spread them to make these targets operationalize. Again monthly
meetings are held in order to check the performance of the employees
towards the achievement of these targets. There is incentive scheme to
motivate the employees to achieve these targets. There are production
bonuses and cash rewards.

CASH REWARD / PROFIT SHEARING PLANE

22% of the companys profits are shared among the employees.

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Production Bounces
Production standards are set, i.e. 28000 tractors / annum. On meeting and
exceeding these targets they are given production bonuses. In order to
meet the sales targets, MTL also give the incentives to dealers but
considering these tractors that factors are

That past performance(Low, medium and high performers).

Financial cost of incentives scheme
What was the result/output of the last incentive scheme.
After that MTL do the cost benefit analysis. If the targets are not achieved
then they held the brain storming session. In this session front line field
officer (regional officers) give the monthly reports, share the problems
with the market executives.

Internal Problems Analyzed At Millat Tractors Limited

Millat Tractors Limited is not facing any problem regarding
finance but following problems are identified at Millat Tractors Limited
Product development
Demand Management
o Weak in aggressive marketing.
o Unsatisfied delivery procedure.
o Lack of proper survey (Market research).
Delay in tractor delivery.
No team work.
Totally centralized decision making.
Time consuming producedure .
No customer dealing department in real meaning.

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PRODUCT DEVELOPMENT (OPERATIONAL LEVEL

PROBLEM)
On the basis of 58% - 60% market share, Millat Tractors Limited
consider itself as a market leader but in order to retain and improve its
market share by prevailing in overall Pakistan. Tractors market instead of
its current market (upper Punjab and upper Sindh) through changing
phrase

We better know what customer requires. As

What actually customer wants.

Its true that Millat Tractors Limited is producing new products (generating sets,
fork lift trucks and prime movers) and modifying its available products
(Tractors) but t should modify tractors by introducing those features which
customer requires and create a sustainable competitive advantage.

Now the question arise, why people in lower Punjab prefer 480 model (Fiat
Tractors) rather than models introduce by Millat Tractors?

The answer of this question is that the farmers of these areas mostly use rota-
wheater which do not work well with the 240hP Model of MTL. it efficiently
work with the 480 hP of Al-Ghazi Tractors. So in order to capture this market
MTL should introduce those models of tractor which efficiently work with the
rota-wheater.

DEMAND MANAGEMENT

Weak In Aggressive Marketing

Marketing personnel have a view in their minds that when any customer comes
to the market to buy tractors knowing already what they have to buy either
Fiat or MF, so there is no need of marketing. They do not realize that
changing the minds of the customers is essential in order to survive in a
market. Due to poor marketing, lack of interaction with the customers and
incompetent marketing personnel, Millat Tractors Limited could not

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penetrate in Bahawalpur and other markets of lower Punjab as well.

Millat tractor limited is enjoying as a market leader but it should be noted
that FIAT has been gaining a lot of market share for some years. So there
should be change in the marketing strategies and efforts should be
invested in marketing.

UNSATISFIED DELIVERY PROCEDURE

Millat tractors limited is more relationship oriented than customer

oriented. It shows the biasness and discriminatory behavior with their
customers. Company is following the policy to deliver the product to
those customers who are higher in status e.g. if customer has placed and
order month ago and when MPA places an order now then MPAs order is
given priority and the tractor is soled to him ignoring the customer who is
already waiting for delivery. This should be noticed by top management
and amendments should be make in policy.

LACK OF PROPER SURVEY

There is no proper procedure being followed by MTL to find out

following types of problems:

What type of problems organization is facing?

What problems are being faced by clients.
Whether clients needs are changing or not?
What are the reasons, Millat tractors is not capturing the market
share in lower Punjab, lower Sindh and other areas. Even they are
providing a better package of after sales service?
What MTL competitors are doing?

So market research is a better solution for all these problems.

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DELAY TRACTOR DELIVERY

Proper Delivery

There is another problem regarding long delivery period and availability

of tractors to be sold to the clients. Clients always face difficulty in
getting the tractors on time.

No Team Work

At Millat Tractors Limited people do not work in a team. Every one is

working for their on self interest. The top management should create an
atmosphere in order to change the attitude of the employees so that better
result can be obtained.

Centralized Decision Making

Basically all the decisions are made by higher authority regarding all the
procedures in the office e.g. purchase, sales, production etc. all the
decisions regarding employees are taken by the top management and they
are not allowed to participate in any decision. Most of the time first line
employees know better than middle and top level management.

Time Consuming Procedure

Every procedure takes a lot of time to be completed if anything required

in office e.g. even smallest purchase have been made it takes a hell of
time to complete the purchasing process. Another example is that if the
company requires smallest equipment for office it takes a lot of time to
get an approval from head office e.g. if a printer is required in office.

NO CUSTOMER DEALING DEPARTMENT IN REAL MEANING

There is no customer dealing department to deal with the customers face

by face. Every client or a new customer to comes to the office for

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obtaining the information or for purchase of any MTL products has to

meet the marketing personnel. The marketing personnel only focus on the
job they are assigned.

PREMATURE LAUNCH OF 260 TURBO (60 HP) TRACTOR

Early and premature launch of 260 model has created the problem for
Millat Tractors Limited. This model is not well appreciated by the
market. This problem again indicate the flaws of marketing department
and lack of marketing research. Through the proper market research they
could launch this model at appropriate time so, Millat Tractor is thinking
to launch this model with some modification.

CORPORATE LEVEL STRATEGY

If we go by the text, then corporate strategy answers the question that in
what business the company should be in

Diversification
Millat Tractors Limited involve in diversified business that have already
been listed.

Forms Of Diversification
MTL using following three forms of diversification
1) Vertical diversification
2) Horizontal (related) diversification
3) Global diversification

Vertical Diversification
MTL is involve in backward integration by producing gear boxes and rex
barren batteries. It not only consumes these parts itself but also sell these
to other customers as well.

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Horizontal Diversification
MTL has expanded its business by horizontal diversification through
producing agriculture implements generating sets, fork lift trucks, prime
movers and automobiles (Army Jeeps) as well. Their intention is to invest
in that business when the risk is low in the sense of less competitive
business and also acquire those business which the Govt. has disinvested.

Global Diversification
At global level, Millat Tractors Limited exports its products in form of
CkD (Completely knock down) components which its foreign customer
requires so that import cost can be reduced. MTL imports its products to
Malaysia, Bangladesh, Srilanka, Afghanistan, Keynia, (200 Tractors),
Middle East, Sudan, and Nigeria. But Al-Ghazi is not in this position to
export their products.

Means Of Diversification
There are two sources which are used by MTL to diversify its business.
Internal development
Acquisition

Internal Development
Through internal development, Millat Tractors Limited has started
producing the other products such as gear boxes, agricultural implements,
generating sets, fork lift trucks, prime movers and automobiles(army
jeeps).

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Acquisition

Rex Barren batteries

Millat tractors limited, the producer of Massey Ferguson brand of tractors
have acquired the assets of rex barren batteries limited for Rs. 13.55m, by
making the highest bid at the auctioneers.
The assets of rex barren, located in Kasur included land measuring 16
kanals 18 marlas with the covered area of 22,750 sq.ft and machinery /
equipment capable of producing 60,000 batteries of different sizes.

Bolan Castings
In 1993, the company in collaboration with the employees of Bolan
Castings Limited acquired the management control of Bolan Castings
Limited by purchasing 51% of the company shares offered by the Govt.
as a part of process of privatization. The management control of BCL was
taken over after successfully submitting the highest bid of Rs. 24.55 per
share in open bidding. BCL provides major castings for automobile
industry and also 50% of the company requirement are met from it. Since
acquisition of control by MTL, BCL has also performed very well and
has been a growth pattern.

Business Level Strategy

Business level strategies determine how the company should compete in
each of its business. These are specific to business.
Millat tractors limited consider itself as a market leader on the basis of its
58%-60% market share and quality products. Millat tractors main
competitor is Al-Ghazi tractors limited. There is intense competition
among them.

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Differentiation
Being a market leader, MTL differentiate its products by offering a best
after sales service & warranty maintenance package. The warranty
package is as follows.
Under 1- year warranty or 1200 H of running whichever comes
first, parts are replaced free of cost.
It renders free services and provides free filter on tractors with the
30h/ traveling.
Other facilities provided by MTL but not by its competitors are as follows
If the farmers have purchased tractors from Lahore it can be
repaired from any work shop which are present allover Pakistan
MTL dealers do not require identity card when customer came
here to sell the product.
For MTL initiates after sale service programmes such as free
work shops, free repair and maintenance programme and doorstep
programmes.
MTL has training school for dealers, technical colleges and
general people.
Here main source of promotion and marketing of their products is
distinctive package of after sale service.

Recommended Strategies
Company should acquire other related business as well in order to offset
the risk. It should acquire those business where the competition in order
to achieve the major portion of profitability and which has the potential
for sale and growth.
MTL should also acquire the Govt. or Private agencies for consultancy to
remove weaknesses and solve the problems.

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Another way to reduce the problems and weakness is that it should do the
strategic alliance with Al-Ghazi Tractors.

OPERATIONAL LEVEL STRATEGIES

Total Quality Management

Among the 2-dominant strategies for the operation management i.e. CPR
and TQM.
At MTL, TQM is used to improve and maintain the tractors quality. Here
their basic purpose is to minimize the errors rate and make it zero level.
So this is the only way to transfer best quality to the customer. There are
quality control systems and quality control circles. There is a proper
procedure to maintain and improve the quality from purchasing raw
material to supply tractors to customers.
MTL believes on continuous improvement. Here the changes are
revolutionary rather than evolutionary. So on the basis of these, they are
using single looped learning model

Competitive Environment
Among the 5-forces of competitive environment, it gives more importance to
rivalry among existing firms. There is intense competition among MTL and Al-
Ghazi Tractors i.e. the thing which they want to avoid. On number 2 nd, new
entrant is also creating a threat for them.
MTL mostly uses a blend of offensive and defensive tactics. it uses proactive
approach when it is going to launch a new model or after sale service. It uses a
reactive Tactic when Al-Ghazi Tractors Limited take initiator of price was then
in this situation, it also has to reduce little bit price and little bit consider the
competitors pricing straregy.its competitors (AGTL) prices are lower because
of 2-reason. First is , it is located in tax free zone and next it has been switched
over from Italic technology to Turkish technology which has reduced per unit
cost. But Alghazi has also make the delivery procedure more prompt.
SWOT ANALYSIS

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The swot analysis consist of analyzing the organizational strength and weaknesses,
and its opportunities and threats which are related to external environment. it helps to
identify a strategic niche that the organization might exploit. Here is a swot analysis
of Millat Tractors Limited.

Strength
Millat tractors limited is strong organization as for as its competitor is
concerned. Basically the activities the firm does well or the resources it
has or it controls are referred to as its strength.
Following are the strengths of MTL.

Good Will / Well Established Image

MTL has an excellent goodwill in the market and in stock exchange.

Market Share
A market share of 58%-60% proves to be a demanding strength of the
Millat Tractors Limited.

Repair Facility
MF tractors can be repair from any workshop located in any area of
Pakistan. There is no specification, regarding repair maintenance of
tractors such as if the customer has purchased tractor from Lahore, he can
repair it from D.G. Khan or Mailsi workshop as well.

Delivery Through Dealers And Direct Cash Basis

MTL has strength over their competitors . it delivers tractors through
dealers and direct cash basis delivery is also made. But Al-Ghazi tractor
makes delivery just through dealers.

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Licenses And Technology

Licenses and technology from Massey Ferguson, UK gives Millat
Tractors limited an extra edge.

ISO 9002 Certification

Another, solid strength of Millat Tractors Limited is ISO 9002
certification for its engine assembly, tractor assembly and laboratory.

AFTER SALE SERVICES

A good package of after sales service by Millat Tractor is another strength
on its competitor and provide the customer satisfaction.

Availability Of Parts
Millat tractors parts are readily available all over Pakistan that is another
strength.

Network Of Dealers And Workshops

There are 69 tractor dealers, 46 spare parts dealers and 312 workshops all
over Pakistan.

Diversification
Millat tractors limited has diversified its business by producing
agricultural implements, generating sets, fork lifters, rex barren batteries
and now working on the automobiles business as well.

Experience
Another strength of MTL is that it has been established since 1964 so it
has experience labor force.

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Price Earning Ratio

MTL enjoys a higher percentage in stock exchange due to higher price
earning ratio.

WEAKNESSES
Weakness are the activities the firm does not do well or the resources it
does not fully utilized or the resources it needs but does not have. Though
Millat Tractors Limited in a successful organization but it has following
weaknesses.

Job Staticness
There is lack of job rotation in MTL which has created the staticness and
reduce the productivity and efficiency of the employees.

Indispensability
High market share another strength has mad Millat Tractors to think that
they are leaders so they do not put its efforts to those areas which are
weak and need its attention.

Long Delivery Period

As compare to its competitors delivery time period of tractors delivery is
long.

Diversion Of Concentration
Due to diversified work at MTL, it might not able to fully concentrate on
its primary operations.

Non Specialized People At Front Desks

The marketing department has good workers but they are not good at
public dealing and less interaction with the customers.

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Long Procedures Of Decision Making

There are long decision making procedure. Not quick decision are taken
so these long procedures are time consuming.

Opportunities
Opportunities are positive external environmental factors. They have
following opportunities for Millat Tractors Limited.
Expansion In Automobiles, Implements, Fork Lifts Trucks And
Generating Sets, REX barren batteries & Bolan casting.
Due to changing needs of country, MTL has the opportunity to make
power machine along with manufacturing tractors and diversifying its
business.

Crop High Yields And Rates

If the crop yield is high and the farmers are going to get good price for it
so this wills increase the demand of the tractors.

E-Commerce
MTL can established B2B e-commerce application with its dealers, spare
parts and workshops. This will help them to make true MANAGEMENT
INFORMATION SYSTEM

THREATS
Threats are negative external environmental factors. The external factors,
which can be prove negative for Millat Tractors are as following:

Political Instability
The major threats which is faced by MTL is the instable political
environment. A policy being carried out by one government is changed by
next coming up government. Such as Awami Tractor Scheme and

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Green Tractors Loaning Scheme. Every government shows biasness

and make policies by considering their favorites.

Strong Local Competition

MTL has face a very strong competition not only in tractors but in
agriculture implements as well. In tractors the major competitor is Al-
Gahzi Tractors Limited and in agricultural implements all the local
manufacturers are its competitors .AGTL has achieved a major portion of
the market share so rapidly by reducing per unit cost of tractor by
switching from Italy (FIAT) technology to Turkish technology
(TUMOSAN) and by managing its delivery period.
Pest Analysis
POLITICAL
In 1979, Zia government imply the ordinance for the automobile
industry. According to this ordinance the formers are indicated to
produced all the imported items at local level. MTL acted upon this
ordinance in 1981. Uptill now all the government policies are in favour of
farmers. Banazeer Government had introduced Awami Tractor scheme
and Nawaz Shareef Government had introduced Green Tractor Scheme.
According to this schemes prices of the tractors declined. MTL also gave
the sacrifice by reducing the profit margins and on the other hand
government reduced the taxes but this reduction was not so much
supportive.

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[Safety and Environmental Protection]

The Company has a separate Horticulture Department to make the

environment pleasant, green and full of flowers. The Company has
been participating since many years in the Horticultural and flower
competitions arranged by Government and other institutions. The
Company again won best performance awards in different
competitions. To promote healthy environment within the Company
and its surroundings, a major Tree Plantation Campaign was
undertaken and over 2500 trees were planted.

However, the Company remains fully committed towards the

requirements for safety and environmental protection. All the operations
are continuously monitored to meet the requisite standards in these areas.
The Company's operations continued under safe operating conditions and
the past excellent record in this respect was maintained during the year.
The safety committee closely monitors all activities to create awareness
and education for the adoption of best safety practices.

Social Responsibility and Community work

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Compliance with the spirit of laws, timely payment of all govt. Taxes and
dues. Obligations, the Company continued to promote various welfare
schemes, organizations and charitable institutions. The Company
provides financial assistance for promoting education, health and social
activities to schools,

Hospitals and charitable trusts as and where requested by them. The

Company has been sponsoring Golf Tournaments at the national level and
musical activities etc.
Technology
The Company produced 14,652 tractors as against 15,370 units of last
year reflecting a decrease of 5 %. The production was in line with the
requirements of the Marketing Department.

As part of the Company's policy of providing appropriate products to

meet customers' requirements, two new models i.e. MF-260 Turbo (60
HP) and low cost option of higher HP MF-375E (75 HP) have been
introduced in addition to the existing models MF-240 (50 HP), MF-385

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(85 HP) and MF-385 4 Wheels Drive. We are now well placed in the
market by offering a wide range of products meeting all pocket needs.
This also places us in a comfortable position to meet future WTO
conditionalties. We are confident that our current products quality will
place us in a good position to compete globally. Encouraged by this
acceptability we plan to continue with the concept of offering products
suited to the market needs to further enhance our existing tractor range.
Future Outlook
Pakistan' agricultural sector will remain stagnant unless we optimize our
farm power level through extensive use of agriculture, machinery and
tractors. The
Company feels that the tractor market would remain at
the same level in 2002-2003 as in the current year.
MTL will strive to maintain its market share and play a
positive role aimed at boosting the agricultural sector.

The Company expects that the tractor industry will grow further due to
restructuring of ADBP recently being taking place, formation of politic
Government in October, 2002 and Afghan potential i.e. participation of
Pakistan in the rehabilitation of Afghanistan.

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Habib Bank Ltd. and The Bank of Punjab are already extending tractor loans
and improving their share in the tractor industry which shall reduce dependence
on ADBP
Suggestions
We gave following suggestions for Millat Tractor Ltd. By acting upon these
MTlL will not only profitable itself but also play an important role in the
development of the economy.
1. Marketing is called s back bone of an organization. a poor marketing of a
good product can disaster results while good marketing of bad product can
make me rich other rights. There is a lot of room of improvement present in
the marketing development regarding marketing research to identify where
the problem (what is the reason of sales decline) & which section of an
organization is weak dealing with the customer in this regard special
improvement in booking section is required. The best way at booking
section. The problem is due to the job of persons at booking section. To
show the problem course covering the topic how to deal with the different
people should be organized.
2. They should change their thinking that they will always remain leader of
tractor industry but they should understand that every business has to face
the decline stage as well in order to remain at maturity, it is necessary they
should capture those markets in which they still did not penetrate & The
competitor analysis thoroughly.
3. Another area which demand attention is that of job rotation. Employees are
not so much productive, motivated and efficient because of their routine
job.
4. They also are allowed the operational level employee in decision making
process especially when the decision are taken about the labour force
because most of the time they better know about what is beneficial and
suits to them.
5. The delivery time period at MTL is 21-days arrangement should be made to
decrease the delivery time so that service level can be improved.

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