Is HMT tractors turning around?

“Our losses are on decline and we have taken various measures like value engineering, better inventory control, improving value additions etc. to ensure that we make profit in 2006-07.” Says S.K.Sharma, Group GM.

HMT Limited, a government of India undertaking, was established in 1953 in technical collaboration with M/s. Oerlikon of Switzerland. It manufactures a wide range of products including machine tools, watches, tractors, printing machines, presses, die casting and plastic injection moulding machines, food processing machinery, CNC systems, ball screws etc. It has had technical collaboration with over 30 leading international engineering companies for the manufacture of various products.

Today, HMT has 16 manufacturing units (22 product divisions), assets worth over US $ 250 million, annual turnover of US $ 300 million, ISO 9000 accreditation and the widest range of machine tools ranging from general purpose lathes to CNC turning/machining centres. HMT’s range of products are marketed internationally by its subsidiary, HMT (International) Ltd. HMT(I) also exports machine tools and other engineering products manufactured by other reputed firms in India. It offers a comprehensive package of consultancy, technical and engineering services from concept to commissioning on turnkey basis, too.

Tractors & Agiricultural Implements
HMT commenced manufacturing of agricultural tractors in 1972 in collaboration with Zetor, Czech Republic. Starting with 25 HP tractors, today HMT manufactures a wide range of tractors in the range from 25 HP to 75 HP to suit various farming requirements. The company has tractor plants in Pinjore, Mohali and Hyderabad with capacity of 20,000 per annum. HMT tractor manufacturing units have ISO 9001 certification. The company’s tractors are sold in the international markets, too. It has exported its tractors to USA, Czech Republic, Croatia, Sri Lanka, Bangladesh, South Africa, Senegal, Nigeria, Malaysia, Liberia etc.

“We began with 25 HP tractors, which has been quite popular among the small and medium farmers. Later, we introduced tractors in 25 HP to 75 HP ranges. Our current products are HMT 2522, HMT 3522, HMT 4022, HMT 4922, HMT 5911, HMT 6522 and HMT 7511. Depending on the exacting requirements, the models are accordingly popular. In volume terms, HMT 3522 is our most popular model,” says Mr. S. K. Sharma, group general manager, Tractor Business Group, HMT Limited, Pinjore.

Special Features
The most popular tractor from the HMT stable, HMT 3522, is equipped with hydraulic brakes, PTO through gearbox, which gives variable speed for making it suitable for PTO driven implements, direct axles and portal. “Portal feature helps in maximising traction force while minimising tyre slippage making it most suitable tractor for transportation. It also has a differential lock for making it versatile in wet and rough terrain. It has an efficient direct injection engine which starts easily in cold regions,” says Mr. Sharma. “HMT 3522 ‘s weight to dimension ratio is such that its front does not lift even in steep slopes making it the safest tractor. It meets TREM-II Emission norms,” he adds.

Overall Market Position
According to Mr. Sharma HMT sold around 10000 tractors in the past 12 months. He maintains the company has strong foothold in Karnataka, Madhya Pardesh, Bihar, Himachal Pardesh and Jarkhand with upto 10 per cent market share in these states. He avers, “Even though our overall market share is at present four per cent, we do take pride in the fact that we have not only introduced innovative tractors such as High Speed Tractor, AC Tractor but also helped other tractor manufacturers to establish their plants. Every tractor manufacture in the country uses HMT machines.”

When questioned about the fact that the HMT Tractor Division has been making continuous losses for the past couple of years, Mr. Sharma maintains, “HMT Tractor Business Group continuously made profits till the year 2000-01 since its inception. Due to continuous slide in market in 2001-02 and 2002-03, we had to cut down our production to correct the stock situation. This led to loss during 2002-03 and 2003-2004.” Adding, “Our losses are on decline and we have taken various measures like value engineering, better inventory control, improving value additions etc. to ensure that we make profit in 2006-07.”

The company has around 2200 employees. “Our dealer network is quite strong. We have 300 dealers in the country,” says Mr. Sharma. HMT exports tractors through its subsidiary HMT (I) Limited. “We have exported tractors to Sri Lanka, Nepal, Nigeria, Ghana, Slovakia, USA, Australia, Kenya, Mauritius, Bangladesh etc,” he adds.

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New Technology
Mr. Sharma maintains, “We are investing Rs. 4 crores to establish engine testing laboratory, which is going to be one of the best facility in the country. Another Rs.10 crores is being invested for a modern paint plant, CNC machines, foundry etc. We also have plans to invest Rs.15 crores for modern gear shop technology. Further, we have invested heavily in computerisation of our operations, including computer-aided designing.”

He further says, “We have always been an R&D oriented company and invested substantial amount in engine upgradation and design sourcing and introduced new models through our own R&D efforts. R&D has been built into the systems and processes. Our R&D centre is recognised by the department of science and technology, government of India.” Adding, “Barring one or two tractor manufacturers in the country, most of the other tractor manufacturers are not having much R&D activities. With the above investments, our R&D centre will become one of the best in the country.”

Finance Schemes
Mr. Sharma says, “In India, 90 per cent of the tractors sold are through bank financing. We have entered into tie-ups with leading banks such as SBI, State Bank of Mysore, State Bank of Indore, UCO, PNB, UTI and certain Grameen Banks for financing HMT Tractors.

Tractor Usage
In a study conducted by the company it has been found that a majority of the farmers use tractors for non-farming operations, including hiring to others. “Generally tractors are used for about 4 months for farming operations, and the balance 8 months for non-farming operations such as road and dam construction, mining, haulage, transportation etc,” says Mr. Sharma about the study. He further says, “This year the size of the Indian tractor market is expected to be around 2,30,000- 2,50,000 tractors The tractor industry has been rising at 16 to 20 per cent except for last two years in between, which called for the corrective measures to eliminate excess stock in the market. This year the market is again expecting a growth of 20 per cent.”

Future Plans
Talking about the future plans of the tractor division of HMT, Mr. Sharma says, “As a PSU, we intend to shift the focus from conventional tractors to multi-utility tractors by increasing the use of tractors in areas beyond the farming operations. For this, we have already entered into technology agreement with Trantor Vehicles Limited (TVL), UK to manufacture and market high speed tractors for the first time in the country.”

The high speed tractor, HMT Trantor, was displayed in the recently held Agro Tech 2004 and they evoked keen interest according to company sources. Mounted on 65 HP engine, it travels at a speed of 66 kms per hour besides performing all farming operations of a normal tractor on the field. “HMT Trantor given the advantage of speed will increase the earning power of the buyers. We intend to introduce tractors with suspensions in the range of 90, 110 and 130 HP, which no other manufacturer is offering at present. Besides, we have introduced AC tractors to attract rich farmers and their sons and daughters for agriculture in adverse atmospheric conditions,” says Mr. Sharma.

Mr. Sharma is a Bachelor in Engineering in the electrical stream. “I have done AMIE in mechanical engineering as well. Before I took over as group general manager (tractors), I was heading the machine tool plant in Pinjore. I joined HMT as an engineer trainee and have held various positions in numerous departments. I have extensively travelled abroad to numerous countries for various projects,” he avers.

Our Correspondent

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