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



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.



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



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



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



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.



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



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



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









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



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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agrievolution 222011