The boom in tractor and farm implements sales all through FY 18 has prompted tractor major Escorts to kick in a nearly doubling of production capacity within its Fartdabad factory premises.
According to top company officials, Escorts is looking to take its capacity from the current 80,000 units a year to 1,50,000 a year by 2022. The tractor market has been booming in 2018 and Escorts saw more than 53% growth in February sales alone. “In the next 12 months we will be ready for 120,000-130,000 units/year and then by 2022 we will take it up to150,000 units capacity. Beyond that we will build a new plant,” said Nikhil Nanda, MD, Escort’.
The company had earlier planned to expand capacity at its Faridabad plant to 1,00,000 and has given a green signal for machining capex. The expansion will be funded through cash accruals. Thanks to buoyant demand, Escorts’ current capacity utilisation is 80-85%. “We expect the market to be vibrant in FY19 as well and capacity expansion ROI is going to be good as it will be within the same location.”
Escorts Limited, has once again hit the mark! The sales figures of the giant in March 2018 are reported 11557, much more than its competitor brand Sonalika (10255). Big congratulations to Escorts for an extraordinarily unexpected performance! It sold 11557 tractors in March 2018 in the domestic markets against 7014 tractors in the previous year. Export sales of the company were up by 3.6x. Export figures are reported 233 tractors this year against 65 tractors in March 2017. The total sales, including imports and exports of Escorts in the month of March 2018 were up by 67% yoy. It sold 80,417 tractors in the FY18 much ahead of the low figures in the previous year, depicting a growth of around 26% yoy.
Escort tractor sales are mounting for the past several months on account of 2 successive years of improved crop production, satisfactory monsoon, hassle-free financing and growing usage of tractors in non-agri sectors. Escorts have amazingly beaten Sonalika with rising sales of 67%, one of its major competitors reporting 56% growth. About 20% of tractors are used for non-agriculture use. Drive on roads and highways development as seen in Bharatmala project would also play a key role in enhancing tonnage of tractor segment and the major players within the sector
The company also considering contract manufacturing and private labelling for international players even as it grows its export business.