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Transcript of agrievolution 222011
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Changes needed inAgriculture EquipmentFuture Imperatives
Presented by – Rohtash Mal,
President – Tractor Manufacturers Association, India
Member CII National Committee on Rural Development, India
ED & CEO Escorts Ltd
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“Emerging India”
A Fast Growing Market
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India is set to become 3rd Largest Economy by2014
1.0
3.5
6.0
8.9
GDP - 28 years of high growth
0
2
4
6
8
10
1900-1950 1950-1980 1980-2002 2002-2009
1.0
2.22.1
1.81.5
0
0.5
1.0
1.5
2.0
2.5
1901-1950 1951-1980 1981-1990 1991-2000 2001-2010
(%)
(%)
Population growth is slowingLiteracy is rising
17
5265
80
0
20
40
6080
100
1950 1990 2000 2010 (proj)
(%)
GDP Ranking – PPP 4th, Nominal 11th
Agriculture growth draws highest attention from Government of India totake the overall GDP growth in double digit figure.
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India has a Vibrant Private Space
– 100 Indian Companies have market cap of overUS$ 1bn
– 1,000 Indian Companies have received foreigninstitutional investment
– 125 Fortune 500 companies have R&D bases inIndia
– 390 Fortune 500 companies have outsourcedsoftwaredevelopment to India
– 2% bad loans in Indian banks
– 80% credit goes to private sector
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“Indian Agriculture”
Snap Shot and Potential
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INDIAN AGRICULTURE STRENGTH
• Highest Arable Land - 47% of total
land against Avg. 11 % in the world
• Round the Year Cultivation -20 Agro-climatic regions and 46 Soil typessuited for round the year cultivation
• Ranks first in production of Pulses, Tea,
Jute and allied fibers
• Second largest producerof Wheat,
Rice, Groundnut, Fruits and Vegetables,Sugarcane & Third largest producer of Mustard, Potatoes, Cotton lint, etc.
• 102.8 Million Farmers, over 7.5%owns > 4 ha. Avg farm land size <2 ha,
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Bottom of the Pyramid country, Tractor HP category ranges from 25
HP to 65 HP. Majority falls between 35 – 45 HP category
Average Land Holding and Number of Farmers
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Key Drivers for the AgriculturalEquipment Industry:
The Agricultural Equipment market is drivenby several factors
7GOVT. INVESTING 244 Mil $ PER DAY IN RURAL DEVELOPMENT
t t t
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otent a x sts n mprov ng arm ower perHectare
Source : World Bank
West
Germany
Italy
UK
France
Poland
Korea
USATurkey
BrazilRussia
Pakistan
India
Despite India is Largest Tractor Producer HP / Ha is low.
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Credit
SqueezeCredit
Squeeze,Drought and
Stock Correction
CreditSqueeze &Drought
CAGR1974-79 : 15%1980-85 :1%1986-91 :13%1992-97 :11%1998-03 :
-9%2004-09 :10%
Largest Tractor Market in World, Set to cross 500,000
tractors a year mark,Upsurge in demand to continue
Indian Tractor Industry Trend
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i l d l i
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Source: Sinocast China Business Daily,
01/04/2006
United States
[2.4%, 95%]
Western Europe
[3.9%, 95%]
Former Soviet Union
[14.4%, 80%]
Brazil
[14.8%, 75%]
Argentina
[9.4%, 75%]
India
[52%,30%]
China
[64.9%, 38%]
Africa
[60%, 20%]
( ) Figures indicate population engaged in Agriculture & level of farm mechanization
Agriculture: Engaged Population & FarmMechanization
Huge Gap in Mechanization levels
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Mechanization Potential Across AgValue Chain
Tillage&
SeedbedPreparat
ion
Sowing/Planting
FertiliserApplicati
on
Irrigation
Harvesting
PostHarvest
ing
Inter Cultivation
Plant Protection
CropCycle
RiceHorticultureSugarcane
PotatoMaize etc
Grains
HorticultureSugarcanePotatoMaize etcStraw/stalksForage
All Crops
All Crops
StorageTrash
Management
MechanisationHigh Low
All Crops
All Crops
Crop Care
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Huge Potential in Tillage and Seeding & Planting
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Global Scenario Current Indian Practice
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Right size and price are imperative for leveraging the potential
E S E t P t P t t
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Enormous Scope Ex sts n P ant Protect onMechanisation
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Global Scenario Current Indian Practice
13Appropriate technology shall give the first mover advantage
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Key To Success In Indian Market
Right sizing of technology
&Adoptability
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Why Adaptability is soParamount in Indian
Context?
Some case stories
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Long Haulers
Unilever (HLL)
BAT (ITC)
Suzuki Motor / Maruti
Recent Starters
Hyundai Motor
LG
Samsung
GE
Localisation Is All Very Well
But these are the true road warriors
Some Success Stories
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Success in India …what made it happen?
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General MotorsFord
Kellogg
PepsiCoke
Enron
ElectroluxWhirlpool
Reebok/Nike/Adidas
…….. and the list goes on.
“Failures”
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Failures in India… why ?
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Long haul market, ‘hang in there’
Not for the faint-hearted
Under-investing as bad as over-investing
Demands strategy complexity –folks and
strokes
An amazing opportunity to Fail…..
Or Succeed
What India means today-Rx
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Build costs in tandem with revenues
Needs international fundamental
questions-not solutionsExist on Earth and Mars concurrently in
terms of market and technology practices
An amazing opportunity to succeed …… ..…
or to fail
What India means today-Rx
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Sum up
• Indian Economy is growing on a sustainable
model.
• Agriculture growth is a Top Priority Agenda with
Indian Govt.
• Abundant potential in farm productivity and
mechanization exist.
• Adoptability for Right size, technology and Priceis key to success.
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“ESCORTS GROUP”
Strive to propel change in theIndian Farming Landscape by
leveraging its expertise build over 50 years’ experience in India &
Global markets.
E B i
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Escorts Businesses
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Escorts Businesses Agri. Machinery Group
• Escort is a Technology Driven,
Customer Focused Company with aworld class Research and Development
Center.• Has global footprint spread across 20
countries• Escorts is the first tractor
manufacturer in the world which hasbeen awarded TS 16949 Certification.
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Thank You!
Jai Kisan
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