Changes needed in

Agriculture Equipment
Future Imperatives

Presented by – Rohtash Mal,

President – Tractor Manufacturers Association, India
Member CII National Committee on Rural Development, India
ED & CEO Escorts Ltd
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“Emerging India”
A Fast Growing Market

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India is set to become 3rd Largest Economy by
2014

GDP - 28 years of high growth

(%)

10
8.9
8
6.0
6
3.5
4
2 1.0
0
1900-1950 1950-1980 1980-2002 2002-2009

Literacy is rising (%) Population growth is slowing

2.5 2.2
(%) 2.1
100 2.0 1.8
80 1.5
80 65 1.5
1.0
60 52
1.0
40
17 0.5
20
0 0
1950 1990 2000 2010 (proj) 1901-1950 1951-1980 1981-1990 1991-2000 2001-2010

Agriculture growth draws highest attention from Government of India to

take the overall GDP growth in double digit figure. GDP Ranking – PPP 4 , Nominal 11 th th
India has a Vibrant Private Space

– 100 Indian Companies have market cap of over

US$ 1bn
– 1,000 Indian Companies have received foreign
institutional investment
– 125 Fortune 500 companies have R&D bases in
India
– 390 Fortune 500 companies have outsourced
software
development to India
– 2% bad loans in Indian banks
– 80% credit goes to private sector

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“Indian Agriculture”
Snap Shot and Potential

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 INDIAN AGRICULTURE STRENGTH

• Highest Arable Land - 47% of total

land against Avg. 11 % in the world
• Round the Year Cultivation -
20 Agro-climatic regions and 46 Soil types
suited for round the year cultivation
• Ranks first in production of Pulses, Tea,
Jute and allied fibers
• Second largest producer of Wheat,
Rice, Groundnut, Fruits and Vegetables,
Sugarcane & Third largest producer of
Mustard, Potatoes, Cotton lint, etc.
• 102.8 Million Farmers, over 7.5%
owns > 4 ha. Avg farm land size <2 ha,

Average Land Holding and Number of Farmers

Bottom of the Pyramid country, Tractor HP category ranges from 25

HP to 65 HP. Majority falls between 35 – 45 HP category 6
The Agricultural Equipment market is driven
by several factors

Key Drivers for the Agricultural

Equipment Industry:

GOVT. INVESTING 244 Mil $ PER DAY IN RURAL DEVELOPMENT 7

Potential Exists in Improving Farm Power per
Hectare

UK
France West
Germany
Pakistan
Korea
Poland Italy
India USA
Turkey
Brazil
Russia

Despite India is Largest Tractor Producer HP / Ha is low.

Source : World Bank

Indian Tractor Industry Trend

CAGR
1974-79 : 15%
1980-85 :
1%
1986-91 :
13%
1992-97 :
11%
1998-03
Credit:
Squeeze
-9%
Credit
2004-09 : Squeeze,
10% Credit Drought and
Squeeze & Stock
Drought Correction

Largest Tractor Market in World, Set to cross 500,000

tractors a year mark,
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Upsurge in demand to continue
Agriculture: Engaged Population & Farm
Mechanization

Former Soviet Union

[14.4%, 80%]
Western Europe
United States [3.9%, 95%]
China
[2.4%, 95%] [64.9%, 38%]
Africa India
[60%, 20%] [52%,30%]
Brazil
[14.8%, 75%]
Argentina
[9.4%, 75%]

( ) Figures indicate population engaged in Agriculture & level of farm mechanization

Source: Sinocast China Business Daily,
01/04/2006
Huge Gap in Mechanization levels
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 Mechanization Potential Across Ag
Value Chain
Grains
Rice Crop Care Horticulture
Horticulture Sugarcane
Sugarcane All Crops All Crops Potato
Potato Maize etc
Maize etc Straw/stalks
Inter Cultivation Forage
Tillage&
Crop Fertiliser Post
Seedbed Sowing/ Irrigati Harvest
Cycle Applicati Harvest
Preparat Planting on ing
on ing
ion

Plant Protection

All Crops All Crops

Mechanisati Storage
High on Low Trash
Management

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Huge Potential in Tillage and Seeding & Planting

Global Scenario Current Indian Practice

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Right size and price are imperative for leveraging the potential 12
Enormous Scope Exists in Plant Protection
Mechanisation

Global Scenario Current Indian Practice

Appropriate technology shall give the first mover advantage

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Grain Harvesters in India are limited to few
crops and Geography

Global Scenario Current Indian Practice

Small but efficient harvester for all crops needed 14

Shortage in Farm Labour Pushing
Mechanization in Harvesting Solutions
Global Scenario Current Indian Practice

Sugarcane & Cotton harvesting is high

priority Agenda 15 15
 Vast Potential is opening up in Hay Forage
and Trash Management

Global Scenario Current Indian Practice

Emerging market for Baler, Chopper and Silage equipment

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Key To Success In Indian Market

Right sizing of technology

&
Adoptability

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Why Adaptability is so
Paramount in Indian
Context?

Some case stories

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Some Success Stories

Long Haulers
Unilever (HLL)
BAT (ITC)
Suzuki Motor / Maruti
Recent Starters
Hyundai Motor
LG
Samsung
GE

Localisation Is All Very Well

But these are the true road warriors
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Success in India …what made it happen?

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“Failures”

General Motors
Ford
Kellogg
Pepsi
Coke
Enron
Electrolux
Whirlpool
Reebok/Nike/Adidas
…….. and the list goes on. 21
Failures in India… why ?

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What India means today-Rx

 Long haul market, ‘hang in there’

 Not for the faint-hearted
 Under-investing as bad as over-investing
 Demands strategy complexity –folks and
strokes

An amazing opportunity to Fail…..

Or Succeed
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What India means today-Rx

 Build costs in tandem with revenues

 Needs international fundamental
questions-not solutions
 Exist on Earth and Mars concurrently in
terms of market and technology practices

An amazing opportunity to succeed …… ..…

or to fail
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Sum up

• Indian Economy is growing on a sustainable

model.
• Agriculture growth is a Top Priority Agenda with
Indian Govt.
• Abundant potential in farm productivity and
mechanization exist.
• Adoptability for Right size, technology and Price
is key to success.

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 “ESCORTS GROUP”

Strive to propel change in the

Indian Farming Landscape by
leveraging its expertise build over
50 years’ experience in India &
Global markets.
Escorts Businesses

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Escorts Businesses Agri. Machinery Group

• Escort is a Technology Driven,

Customer Focused Company with a
world class Research and Development
Center.
• Has global footprint spread across 20
countries
• Escorts is the first tractor
manufacturer in the world which has
been awarded TS 16949 Certification.

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Thank You!

Jai Kisan

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