Sonalika Plans to Take Tractors Global
New Delhi: To increase Sonalika's tractors reach across international markets, Makers of Sonalika branded tractors, Japanese agri-equipment manufacturer Yanmar is looking at leveraging India as a global production base, after increasing its stake in International Tractors (ITL).
“As far as ITL and Yanmar goes, our product range complements each other, our tractors are designed for multiple uses whereas they have expertise in making products for specific applications," said Raman Mittal, executive director, ITL.
"Besides, we are setting up a state-of-the-art tractor manufacturing facility in Hoshiarpur, Punjab. We will synergise operations and leverage the facility as a global production base to expand presence across international markets, particularly in Europe and the US,” he added.
The capacity to manufacture 200,000 units per annum, is the ITL’s second manufacturing facility and is scheduled to come on-stream next month. At the site, the company has invested close to Rs 800 crore.
At the time of the transaction, Naoki Kobayashi, India head and member of Yanmar Board had confirmed that ITL is an integral part of the growth strategy for Yanmar and the recent investment is a testimony towards this commitment.
Late last month, in one of the largest foreign capital inflow into India’s core agriculture-related industrial sectors, Japan’s Yanmar agreed to buy 17.5% stake in ITL . The shares held by the world’s largest private-equity fund, Blackstone Group, would acquire by Yanmar. The deal values ITL at Rs 9,000 crore.
In the next few months, subject to receipt of requisite regulatory approvals, the transaction is expected to close. Yanmar had acquired 12.5% stake in the company in 2005 and is an early investor in ITL.
Mittal said, “Blackstone Group was mulling an exit as private equity funds go. We have cash reserves of over Rs 3,000 crore and are a debt-free company. To provide an exit to Blackstone, we were earlier considering an IPO. But now that Yanmar has bought over the stake, the IPO is no longer necessary.”