Sonalika International plans major expansion in Africa

HYDERABAD, India - March 21, 2014 - PRLog -- NEW DELHI:  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.