Deere designs on India

Today tractors, tomorrow tractor components and thereafter agricultural equipment! That''s the blueprint for India from global tractor and agricultural equipment giant, Deere and Company.

On October 6, L&T-John Deere Ltd, a 50:50 joint venture between, Indian engineering giant, Larsen & Toubro and the Deere and Company, officially inaugurated its state of the art tractor plant at Sanaswadi, 30 km from Pune. (Pune is nearly 150 kms from Mumbai, India’s commercial capital) The fully integrated factory is in three parts -- transmission, engine and vehicle assembly.

The plant, with an investment of Rs 390 crore in the first phase, has a capacity to make 30,000 tractors annually. The company has already begun manufacturing its 55 HP tractors at this plant, seeding nearly 250 of them in the market.

In three months time, two more models are to be introduced – the 35 HP and 47 HP - with the third, a 70 Hp in a year''s time. Of these, the 35 HP will become the ''mass'' model, making up for 50 per cent of the company''s annual production by the fifth year.

The company proposes to reach a figure of 1,800 to 2,000 tractors in the first year of production. Currently, production is at eight tractors a day. The company, which has reached an indigenisation level of 65 per cent, expects to achieve 95 per cent by the fifth year.

This is only the beginning. According to Mr. Fred Korndorf, president, worldwide agricultural equipment, Deere & Company, the company is planning to bring into India the full line of agricultural equipment being manufactured by Deere and Company.

Explaining the rationale behind the move, Mr. Korndorf, "We see, in India, a phenomenal agricultural potential which can be realised through the addition of mechanisation, supported with the latest technology. Our core mission is to enable farmers do their job of feeding the world. We look at India as a central global bread basket"

On the other hand, India is likely to become Deere''s source of tractor components for Asia and beyond. "As we go ahead with our program of indigenisation, the components required for Asia and the rest of the world could be sourced from India," said Mr. Korndorf.

Later, speaking to domain-B, he said that, top on the list of farm equipment to be introduced in India would be sugarcane harvesters, ploughs, and tillage equipment. "Maharashtra being strong on sugarcane cultivation, sugarcane harvesters are the obvious choice," he said.

Farm equipment, however, will be introduced only after tractor production gets stabilised and optimised. "This will be the next step, after establishing a market demand that is predictable and will support the necessary investment," said Mr. Korndorf. He ruled out any possibility of the company getting into tractors lower then 35 HP, because, as he says, "John Deere technology is geared to higher productivity and to the larger farmer."

On whether the larger tractor would suit the Indian scenario with its fragmented holdings, he told domain-B that the US practice of contract harvesting could be replicated here. "It is a common practice in the US for contractors to hire out tractors to different farmers at different parts of the year. Farmers can also join together to form a group and buy it collectively, as in a co-operative," said Mr. Korndorf.