Date post: | 19-Feb-2018 |
Category: |
Documents |
Upload: | aziz-malik |
View: | 218 times |
Download: | 0 times |
of 19
7/23/2019 Agricultural Equipment 09052008
1/19
www.ibef.org
AG R I C U LT U R A L E Q U I P M E N TOctober 2007
7/23/2019 Agricultural Equipment 09052008
2/19
The share of Agriculture in Indias GDP has been diminishing
AGRICULTURAL EQUIPMENT
October 2007
Growth rate of Agriculture sector has been erratic
2 4 6 8 10 120
2004-05
10.7%
2005-06
0.7%
2006-07
2.7%
Agriculture Growth rate (%)
and the share of the sector in overall GDP is declining
17.5 18 18.5 19.5 20.5 2117
2004-05 20.8
2005-06 19.9
2006-07 18.5
Agriculture share of GDP (%)
2019
However, it continues to be of high significance, as more than
60% of the population are involved in it
The Agricultural Equipment Industry is a key sector that
contributes to Agricultural growth and productivity
7/23/2019 Agricultural Equipment 09052008
3/19
The Agricultural Equipment Industry spans all activities across the value chain
Indias agricultural equipment industry has a
diverse product portfolio catering to activities
across the value chain
Land development, Tillage,
Seed bed Preparation
Sowing and Planting Weeding, Inter cultivation,
Plant Protection
Harvesting
and Threshing
Post harvest
and Agro processing
1. Tractors
2. Levelers
3. Ploughs
4. Dozers
5. Scrapers
1 Drill
2 Seeder
3 Planter
4 Dibbler
5 Transplanter
1 Shovel/Plough
2 Harrow
3 Tiller
4 Sprayer
5 Duster
1 Harvester
2 Thresher
3 Digger
4 Reaper
5 Sheller
6 Sickle/ Dao
1 Seed Extraitor
2 Extraitor
3 Dehusker
4 Huller/ Dehuller
5 Cleaner
6 Grader
7 Mill
8 Dryer
However, the organized market largelyrevolves around tractors, tractor driven
devices and tillers.
AGRICULTURAL EQUIPMENT
October 2007
7/23/2019 Agricultural Equipment 09052008
4/19
The Agricultural Equipment market is driven by several factors
Key Drivers for the Agricultural
Equipment Industry:
Driver Impact on agricultural equipment industry
Improved availability of credit
Emergence of Contract farming and
dedicated sourcing with corporate
partnership
Focus on Productivity to maximize ROI
from agriculture
Opportunity for employment in urban
areas pressurizing agricultural wages
Increased competition driven by
WTO Norms
AGRICULTURAL EQUIPMENT
October 2007
7/23/2019 Agricultural Equipment 09052008
5/19
There has been an increased focus on Mechanization of Agriculture
Increased adoption of mechanization in an
attempt to ensure greater ROI and sustainability
of agriculture
0.2 0.4 0.6 0.8 1 1.2 1.4 1.6
Use of power for agriculture
0
1971-72 0.30
1981-82 0.47
1991-92 0.76
2001-02 1.23
2005-06 1.50
Total Power, kW/Ha
AGRICULTURAL EQUIPMENT
October 2007
7/23/2019 Agricultural Equipment 09052008
6/19
15
There has been an increased focus on Mechanization of Agriculture
Mechanisation primarily driven by increased
use of tractors, which is replacing manual and
animal labour
50 10 20 30 40 50
Source of Power-Percentage share over 4 decades
n 1991-92 n2001-02 n 2005-06z
power
Tiller
Electric
Motor
Draught
Animal
Agriculture
worker
Diesel
Engine
453525
Tractor
AGRICULTURAL EQUIPMENT
October 2007
7/23/2019 Agricultural Equipment 09052008
7/19
The sector has grown steadily over the past 25 years
The growth in domestic volumes has been
due to an urge for productivity enhancement,
aided by imminent threat of low cost imports
aided by WTO
350000
300000
250000
200000
150000
100000
50000
0
1982-8
3
198
5-8
6
1988-8
9
199
1-9
2
1994-9
5
199
7-9
8
2000-0
1
200
3-0
4
Tractors, Sales
Tillers, Sales
Salesinnumbers
AGRICULTURAL EQUIPMENT
October 2007
7/23/2019 Agricultural Equipment 09052008
8/19
Exports, primarily in Tractors, have been a key driver for growth
India is developing into a hub for manufacture
of Agricultural Equipment, primarily tractors
50 100 150 200 2500
2000-01
2001-02
2002-03
2004-05 235.4
149.4
98.5
2003-04 176
78
n Agri Equipment Exports, US$ Million
CARG 31%
Consistent growth in exports at CAGR of 31 percent
in value terms
Exports primarily driven by Tractors
AGRICULTURAL EQUIPMENT
October 2007
7/23/2019 Agricultural Equipment 09052008
9/19
Overall, the sector presents significant opportunities,
tempered by increasing competition
HIGH
MEDIUM
LOW
Threat of New Entrants
Current players well established
New entrants will need to invest in Brand,
Distribution, Financing and Service Network
AGRICULTURAL EQUIPMENT
October 2007
7/23/2019 Agricultural Equipment 09052008
10/19
Overall, the sector presents significant opportunities,
tempered by increasing competition
Supplier Power
Well developed supplier industry
Most suppliers are small and lack of economies
Competitive Rivalry
Number of well established players, with new players
entering
Good technological capability
Increased mechanisation presents new growth
opportunities
AGRICULTURAL EQUIPMENT
October 2007
7/23/2019 Agricultural Equipment 09052008
11/19
Overall, the sector presents significant opportunities,
tempered by increasing competition
Customer Power
Wide variety of choice for customers
Many customers do not have access to organised
finance
Threat of Substitutes
New innovations in semi-automated mechanisation
being tried out, in place of capital intensive equipment
AGRICULTURAL EQUIPMENT
October 2007
7/23/2019 Agricultural Equipment 09052008
12/19
There are also a few key issues that impact growth in the sector
Key Concerns / Dampeners
Sub-optimal irrigation infrastructure
Many farmers still lack access to financing and depend
on unorganised moneylenders
Increasing fragmentation of land, skewing cost
structure of agriculture against capital investment High product life, resulting in low rate of replacement
and upgradation
Increasing prices of fuel leading to greater cost
of operations
AGRICULTURAL EQUIPMENT
October 2007
7/23/2019 Agricultural Equipment 09052008
13/19
Tractors and accessories provide the most significant
Investment Growth opportunity in the sector
n Animal Drawn Seed Cum Fertilizer Drill
n Tractor Drawn Seed Cum Fetilizer Drill
n Animal Drawn Leveller
n Tractor Operated Levellers
n Manually Operated Plant Protection Equipment
n Power Operated Plant Protection Equipment
n Drip & Sprinkler Equipment
n Horticultural Tools (Power Operated)
n Tractorsn Power Tillers
n Tractor Operated Dise Harrow
n Tractor Operated Cultivator
n Tractor Operated Rotavator
n Potato Digger
n Straw Reaper
n Forage Harvester
Tractors and related equipment have lowpenetration indicating high growth potential
100 20 30 50 60 9070 8040
12.5
2
16.7
6.6
8.9
4.3
28.5
8.3
6.2
7
36.10
84.8
Penetration,
No.s per
1000
Hectare
18.2
2.1
0.9
18.8
AGRICULTURAL EQUIPMENT
October 2007
7/23/2019 Agricultural Equipment 09052008
14/19
105 150
Uttar Pardesh
Gujarat
Maharashtra
Haryanna
West Bengal
Tamil Nadu
Andhra Pradesh
Karnataka
Bihar
Orissa
Rajasthan
Madhya pradesh
There are several states that provide attractive investment opportunities
Several factors are considered for assessing the
attractiveness of a location for investment
Factor consolidation for manufacturer
Demand conditions
Government subsidy to farmers for purchase of
agricultural equipment Consolidation of farms
Irrigation Infrastructure
Current share of industry output
Proximity to regional markets
Subsidisation of Agricultural Equipment (US$ million)
AGRICULTURAL EQUIPMENT
October 2007
7/23/2019 Agricultural Equipment 09052008
15/19
There are several states that provide attractive investment opportunities
Based on the above factors, Punjab andMaharashtra
emerge the most attractive destinations for investment
in this sector.
Share of Agricultural Equipment Output
n Punjab n Uttar Pradesh n Haryana
n Rajasthan n Madhya pradesh n Gujarat
n Maharashtra n Bihar n West Bengal
n Karnataka n Andhra Pradesh n Others
0.5%
21.0%
0.2%
AGRICULTURAL EQUIPMENT
October 2007
7/23/2019 Agricultural Equipment 09052008
16/19
Profiles of Key Players in India
Mahindra & Mahindra Limited (M&M)
Distribution and sale of farm equipment and related
utility vehicles
Established market leadership in the sector over past
24 years
One of the top five tractor brands in the world,the company has its own state-of-the-art plants in
India, USA, China and Australia and has a capacity to
produce 1,50,000 tractors a year
AGRICULTURAL EQUIPMENT
October 2007
7/23/2019 Agricultural Equipment 09052008
17/19
Profiles of Key Players in India
Tractors and Farm Equipment Limited (TAFE)
A unit company of the Amalgamations Group, one of
Indias largest Light Engineering Groups
Collaboration with AGCO Corporation, Georgia, one
of the largest manufacturers, designers & distributors
of agricultural equipment.
Has a network of more than 500 dealers, branches,
service outlets as well as its own sales offices and
depots covering the entire length and breadth of India
AGRICULTURAL EQUIPMENT
October 2007
7/23/2019 Agricultural Equipment 09052008
18/19
Profiles of Key Players in India
John Deere
John Deere established a green field project in 1999
under a 50:50 joint venture with Larsen & Toubro
Limited (L&T)
A state of the art tractor manufacturing plant for
5000 series John Deere tractors was set up at
Sanaswadi, near Pune, in the state of Maharashtra
Tractors manufactured in Sanaswadi are also exported
to the USA, Mexico, Turkey, North and South Africa,
and South East Asia. The company has received awards
for export excellence in 2005 and 2006 from the
Engineering Export Promotion Council.
AGRICULTURAL EQUIPMENT
October 2007
7/23/2019 Agricultural Equipment 09052008
19/19
This presentation has been prepared jointly by the India Brand
Equity Foundation (IBEF) and KPMG Advisory Services Private
Limited (Author).
All rights reserved. All copyright in this presentation and related
works is owned by IBEF and the Authors. The same may not be
reproduced, wholly or in part in any material form (including
photocopying or storing it in any medium by electronic
means and whether or not transiently or incidentally to some
other use of this presentation), modified or in any manner
communicated to any third party except with the written
approval of IBEF.
This presentation is for information purposes only. While due
care has been taken during the compilation of this presentation
to ensure that the information is accurate to the best of the
Authors and IBEFs knowledge and belief, the content is not
to be construed in any manner whatsoever as a substitute for
professional advice.
The Author and IBEF neither recommend or endorse any
specific products or services that may have been mentioned
in this presentation and nor do they assume any liability or
responsibility for the outcome of decisions taken as a result
of any reliance placed in this presentation.
Neither the Author nor IBEF shall be liable for any direct or
indirect damages that may arise due to any act or omission
on the part of the user due to any reliance placed or guidance
taken from any portion of this presentation.
DISCLAIMER
www.ibef.org
AGRICULTURAL EQUIPMENT
October 2007