“The Pandemic Has Further Fuelled Farm Mechanisation”

Raman Mittal, Executive Director, Sonalika Group talks to BW Businessworld about the tractor industry in general and Sonalika in particular, their performance in the face of the Covid-19 pandemic, and whether the pandemic has changed the way they do business, among other things. Excerpts:  

The tractor industry has been performing well despite the Covid-19 pandemic hitting the world economies hard. How has your performance been this year?

Sonalika is one of India’s leading tractor manufacturers as well as No 1 export brand from India. We have been spearheading innovation in the agri ecosystem with our widest tractor portfolio in the 20-120 HP range and 70-plus implements to boost farm mechanisation in the country. Our strategy is to offer customised farming solutions specific to the needs of the farmers. Therefore, it is appreciated by over 11 lakh farmers across 130 countries. Our tractor business has outperformed the industry growth month after month and clocked its highest ever H1 sales with 63,561 tractors. Further, we created a historical milestone of delivering 19,000 tractors in October 2020, making it our highest ever retail push in the beginning of the festive season. Our agro solutions business clocked 26,530 implements sale in H1 and crossed our FY20 implement sales in just six months. We registered a whopping 135 per cent growth in September 2020 selling 6,400 units and outperformed industry growth of roughly 30 per cent. The volumes increased significantly to our record breaking 10,018 implements sales in October’20. 

Can you throw some light on factors that have led to such phenomenal growth?

Monsoon plays a critical role along with the crop output. Current rabi production of pulses is estimated to be 15.11 million tonne (MT) as compared to 15.02 MT last year and increase in minimum support prices in the range of Rs 50 – Rs 1,975 per quintal across six rabi crops has led to increased disposable income at farmer’s end. Rains have also made a surprising revisit in various parts of the country with the reservoirs’ holding more water than they have in the past 10 years. This has created a platform for healthy agriculture activities during the rest of this year. 

As a company, our phenomenal growth rides the dominant strategy to introduce new tractors at regular intervals. Our tractors and implements have been very well accepted and appreciated for their technology and consistent performance and that is also reflected in our growth trajectory during the pandemic. 

Has the pandemic changed the way you approach markets?

When the entire country was facing lockdown issues, we were well prepared to meet the needs of farmers with four new advanced tractor series. We had launched the Sikander series two years back that has been very well received by the farmers and now contributes 75-80 per cent in sales. Our recently launched premium tractor series includes Sikandar DLX with its unique blend of style coupled with superior performance and comfort; Tiger series known for its European design and best-in-class performance; the customised tractors series Mahabali and Chattrapati that are designed to meet regional farming requirements in Telengana and Maharashtra respectively. These four next generation tractor models are expected to contribute close to 20-25 per cent of our overall sales. 

Did you also face problems in production and supply schedules due to the lockdown?

Our vertically integrated tractor manufacturing plant at Hoshiarpur, which is powered by robotics and automation, is also fully equipped to develop majority of the components in-house, thus production schedules at Sonalika did not witness a significant impact due to the outbreak of Covid-19. 

In fact, we had reached 80 per cent utilisation in fourth week of May itself and currently operating at 100 per cent levels in two shifts. Our entire supply chain in tech-enabled, thus we have a complete end-to-end supply chain management solution in-house. All our 24 depots spread across the states are inter-connected enabling us to keep a track of the tractor delivered on realtime basis and we manage our production as per the consumption. 

What is the current level of farm mechanisation in the country? Has the pandemic triggered a phase of farm mechanisation?

Today, farm mechanisation penetration in India stands at an average of 45 per cent for the entire crop cycle (from seed bed preparation to harvesting) and farmers are majorly oriented towards application-based farming like puddling, mulching, baler application, orchards, horticulture etc, so there is a huge potential for increasing farm mechanisation in the country. 

Sonalika, as a farm mechanisation expert, offers over 1,000+ customised tractor models with a wide range of 70-plus implements to address various stages of crop cycle ranging from land preparation to post harvesting operations. The range includes Full Cage Wheel for puddling application in states like West Bengal, Madhya Pradesh and Andhra Pradesh; Potato Planter and Rotavator for wheat growing states such as Punjab, Haryana, Uttar Pradesh; Sprayer for orchard farming in Maharashtra. 

Farm mechanisation has been increasingly sought after in the country even from pre-pandemic times. Farmers have been continuously upgrading their techniques to enable them to increase the output from their farm lands. Moreover, the lockdowns led to a huge movement of labour, thereby leading to labour shortage across regions and thus pushing demand for implements. I would say the pandemic has further fuelled Indian farmer’s progress towards farm mechanisation.