Agricultural Equipment Industry

Farm Machinery Industry in India

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FARM MACHINERY INDUSTRYIN INDIA

Presented by:Bhanupriya

Choyal

Master’s Seminar on


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Objectives:

•To present the overview of Farm Machinery Industry with the focus on Tractor Industry in India.

•To analyze the prevailing trends in the Tractor Industry.

•To analyze the Growth drivers of the Industry.


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Overview• Agricultural Machinery industry plays an important role in the Indian economy as the agriculture sector still contributes majorly to the country’s GDP.

•Share of the sector in overall GDP is declining. However, the sector remains significant as it employs more than 50 percent of the country’s population.•The agricultural equipment sector is a key sector that contributes to agricultural growth and productivity.

2007-08 2008-09 2009-10 2010-11121314151617

Share of Agriculture sector in India’s GDP (%)

GDP %


04/07/2023 42005-06 2006-07 2007-08 2010-09 2009-10 2013-14

0

20

40

60

80

100

120

140

$66Bn$69Bn $72Bn $79Bn

$99.2Bn

$124Bn E

Overall World agriculture equipment market is likely to grow at a rate of 4.5% and expected to reach about $124 Bn in 2014.Indian Agriculture equipment market contributes around 10% of global equipment market and is sized at $10 BnOver the last few years Indian agricultural equipment market has been widely exposed to international trade.Global majors like John Deere , New Holland & Same Deutz have already made an entry in Indian market , whereas Indian players are looking for alliances with foreign partners overseas.

Worldwide Agriculture Equipment Market(2006-2014),USD billion


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Chronology of Farm Mechanization in India

Pre-Green Revolution Era(1947-1965)

Green Revolution Era(1965-1975)

Post-Green Revolution Era(1975 onwards)

1. Farming by traditional methods

2. Low productivity (0.58 t/ha/yr)

3. Increase in production was attributed to increase in cultivated area

4. Farm power availability was about 0.27 kW/ha

5. Share of animal power sources was 98 to 88%

1. High yielding variety ,fertilizer , chemical inputs

2. Productivity increased (1.14 t/ha/yr)

3. Need for timeliness in farm operations realized

4. Introduction of improved farm machinery

5. Farm power availability was about 0.47 kW/ha

6. Share of animal power sources decreased from 88% in 1965 to 62% in 1975

1. Use of scientific methods in cultivation of crops

2. Raise in the productivity level 2.14 t/ha/yr

3. Increase in the availability of farm power to 1.2 kW/ha

4. Reduction in the share of animal power from 62% in 1975 to 24% in 1997

5. More implement/equipment and machinery put to use for all the farm operations


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1. Tractors2. Levellers3. Ploughs4. Dozers5. Scrapers

1. Seed Drills2. Seed cum fertilizer Drill3. Zero till drills4. Transplanter

1. Shovel /Plough2. Harrow3. Tiller4. Sprayer5. Duster

1. Harvester2. Thresher3. Digger4. Reaper5. Sheller6. Sickle/ Dao

1. Seed extractor

2. Dehusker3. Huller/

Dehuller

4. Cleaner5. Grader6. Mill7. Dryer

Land development, tillage, seed bed preparation

Sowing and planting

Weeding, inter cultivation, plant protection

Harvesting and threshing

Post harvest and agro processing

India’s agricultural equipment industry has a diverse product portfolio :

Technology Advancement over the years…….

Tractor drawn mould board plough

Tractor mounted Disc Harrow

Tractor mounted Seed drill

Animal drawn mould board plough

Blade Harrow

Dibbling Stick

Animal drawn planter

Tractor driven Planter

Animal drawn hoe

Power Tiller

Paddy harvester

Self propelled combine harvester

9


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Global Scenario


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There is greater stress on mechanization of agriculture

There has been a sustained increase in the adoption of mechanization in an attempt to ensure greater return on investment (RoI) and sustainability of agriculture.

Use of power for agriculture(KW/Ha)

Source of power – percentage share over 4 decades

Ag worker Animal Tractor Power tiller

Diesel Engine

Electric Motor

5040302010 0

Mechanisation primarily driven by increased use of tractors, which is replacing manual and animal labour.


04/07/2023 11Source:www.ibef.org


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Tractor Industry in India


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Overview• Introduction• Historical Background

Market Information• Evolution of Market • Current Scenario & Trends• Market Growth Rate• Growth Drivers

Market Players & Situation Analysis• Industry at a glance• Market size• Major Players and their share

Conclusion


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Introduction


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History of Evolution

1868 – Introduction of Farm tractors with steam engine.

Most popular steam tractor was the Garrett4CD.

In 1907 - Henry Ford produced first gasoline powered tractor “automotive plow”.

Later , an Irish engineer named Harry Ferguson’s designed a hydraulic system for carrying implements.


Market Information

• Evolution of Market • Current Scenario & Trends• Market Growth Rate• Growth Drivers


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Evolution of the Industry in India

Inception Phase (1945 to 1965)

Development Phase(1980 to 1992)

Regulatory Phase (1965 to 1980)

Liberalization Phase(1992 to 2002)

Growth Phase(2002 onwards)

Industry Tractor Industry- Sales Performance

Source : CMIE Database , ICRA Estimates

Trend in Yearly Tractor Sales Volume ( Domestic + Export)

Industry Tractor Industry- Sales Performance

Trend in Monthly Tractor Sales Volumes (Domestic + Export)


Indian Tractor Industry-Region-wise Performance


•Shift in Spotlight to Under-penetrated Markets

Indian Tractor Industry-Region-wise Performance


Indian Tractor Industry- HP-wise Performance•Sales to witness polarization towards high & low powered segments



•Exports increase with addition of new destinations

Trend in Tractor Exports from India


Tractor Industry in India-Competitive Landscape



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GrowthDrivers


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Indian Tractor Industry- Growth Drivers Lower level of Tractor penetration –scope for further improvement

Source: World Bank , Emkay Reseach

Tractor Industry in IndiaGovernment support for agriculture and rural development:

Indian Tractor Industry- Growth Drivers

Trend in spend on Agriculture by GOI



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Indian Tractor Industry- Growth Drivers

Improved Credit Environment

2007

2008

2009

2010

2011

0 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000

60,270

78,381

103,875

130,830

157,698

2,140

5,560

8,556

13,343

15,029

Private Banks(INR Cr) PSB(INR Cr)


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Tractor Industry in IndiaIndian Tractor Industry- Growth Drivers

Scarcity of farm labour : Alternate employment opportunities following urban migration and other Government-run schemes such as the National Rural Employment Guarantee Act (NREGA) have necessitated greater farm mechanisation.

MGNREGA - rising employment and wages


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Increasing non-agricultural applications: Increasing use of tractors for haulage in infrastructure and construction projects


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Strong replacement demand :Roughly 40% of domestic demand is from the replacement market. The average life-cycle of a tractor has reduced to ~8-9 years from ~11-12 years. Export Sales

Addition of new export destinations and increased offerings by domestic manufacturers in the higher HP segment has spurred export growth in FY11 and 9mFY12.

Monsoons among the factors supporting tractor industry growth


Market Players & Situation Analysis

• Industry at a glance• Market size• Major Players and their share


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•The Indian tractor industry is relatively young but the largest tractor industry in the world (accounting for 30% of Global production).

•Industry characterized as medium HP Tractor Industry because of the fragmented land holding in India.

•Since last decade industry had been growing (Y-o-Y)@ more than 15%.

•In last two years Industry is growing (Y-o-Y) @ 28% & 24% in FY10 and FY11 respectively.

•Market size of the industry has reached to 5.5 lac units in FY11, with industry growing at a robust pace in the past two years.


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Tractor Industry in India - Major Players


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Share of Major Players

M & M40%

TAFE23%

Escorts10%

ITL8%

John Deere9%

New Holland6%

Others3%

Share (%)

Indian Tractor industry has 13 national and few regional participants. The market share is however, concentrated amongst the top five manufacturers, accounting for over 90% of total volumes.


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M & M TAFE Escorts ITL John DeereNew Holland

22

1722 21

4440

Y-o-Y Growth(%)


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Domestic & Foreign Collaborations of Tractor Manufacturers

Price List of Different Categories Tractors


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REFERENCES

•www.icra.in•www.cmie.com•www.ibef.in•www.zinnov.com•http://agricoop.nic.in•www.ficci.com•www.emkayglobal.com


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Thank You

Agricultural Equipment Industry

Career

Transcript of Agricultural Equipment Industry