Tractor manufacturer Escorts Ltd, with a market-share of 14 per cent across India, is scouting for land in some States to set up a new plant and ramp up production capacity but has ruled out Gujarat as being “too expensive” in terms of cost of land.
While automakers General Motors and Tata Motors, as also companies such as Bombardier, have set up their manufacturing facilities in the State, and India's largest carmaker Maruti Suzuki and French major Peugeot too are eyeing the State, Mr Rohtash Mal, Executive Director and CEO, Escorts Agri Machinery Group, on Tuesday ruled out Gujarat for the proposed plant. “We did consider Gujarat but it is very expensive, even more than gold!,” he remarked while replying to questions here.
Currently, Escorts' facility at Faridabad (Haryana) has capacity to manufacture one lakh tractors per annum and considering increasing it to 1.50 lakh. The company is currently investing Rs 200 crore on the ongoing upgradation of this plant and then expanding capacities. “We are looking at one more location to increase the capacity by 50,000,” said Mr Amit Nandi, Chief, Sales and Marketing.
“Ideally, we would like to set up our plant in close proximity to our main markets,” Mr Mal added. Gujarat contributes 7 per cent to the company's tractor business.
Mr Mal, who launched Escorts' Jai Kisan Series in five new categories in Gujarat in the price-range of Rs 4 lakh to Rs 6 lakh per piece, said that despite population explosion, India is facing farm labour shortages due to rural upliftment schemes launched under the National Rural Employment Guarantee Act (NREGA) which provides jobs to rural labourers in their own areas. This has, despite drought in some States, boosted farm mechanisation, including tractor sales, nearly five times during the last few years, compared with developed nations.
About Escorts' new products, he said these have been developed after receiving feedback from farmers and to cater to various applications and crops in India which has 60 different types of soil. An Escort tractor now comes fitted with an inverter as well, which the farmer can use to provide emergency electricity for basic needs at his home.
Nearly 4.80 lakh tractors were sold in India in 2010-11, including 40,000 in Gujarat. Of late, Maharashtra, Andhra Pradesh and Gujarat have witnessed faster growth in agriculture than Uttar Pradesh, Punjab or Haryana, he added.