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M&M to build new tractor plant

India's largest tractor maker Mahindra & Mahindra Ltd announced on Tuesday that it would set up a smaller assembling plant in Rajasthan to help tailor its tractors to the region's farming needs.

Mahindra, which had a 33.5 per cent share of the domestic market last year, already has farm equipment making units in Bombay and Nagpur in Maharashtra that can turn out over 125,000 tractors a year.

It now plans to set up smaller satellite plants across the country to help build tractors suited to a region's specific geography and farm practices.

"There will be a chain of such plants throughout the country, which will produce tractors with high customisation," Mahindra's marketing vice-president, Ravi Santhanam, told a news conference.

The Rs 70-million plant with a capacity to make 15,000 tractors a year will be located at Mehla, about 40 km (25 miles) from the Rajasthan capital, Jaipur. Expected to be commissioned in the next five months, it will be Mahindra's second such tractor facility after Rudrapur in the northern state of Uttaranchal. The Rudrapur plant was inaugurated earlier this year. "The idea behind setting up the satellite plant is to go closer to our customers," Santhanam said.

Mahindra's tractor sales grew 12.1 per cent in the previous year to March to 79,131 units while India's overall tractor market, the world's largest, fell 9.47 per cent to 236,076 units.

But sales in April-May crashed 37.3 percent in keeping with an overall industry trend.

Industry officials have forecast tractor sales to decline by a further five per cent in the current year to March 2002 as the effect of last year's drought in three states and depressed crop prices on farm incomes continue to be felt.

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