Kirloskar Oil Engines steps up focus on farm mechanisation

Date: July 23, 2018

Publication: The Hindu - Business Line

Link: "www.thehindubusinessline.com/economy/agri-business/kirloskar-oil-engines-steps-up-focus-on-farm-mechanisation/article24496760.ece "

Expects sales of its power tillers to rise by two-thirds

Kirloskar Oil Engines Ltd (KOEL), a manufacturer of power gensets and pumpsets, has stepped up its focus on farm mechanisation as it seeks to drive the sales of its power tillers in the country while tapping overseas markets.

The company, which sells power tillers under the KMW brand, is targeting a sales of around 7,500-8,000 power tillers this year, up from 4,500 units sold last year, said Anthony Cherukara, Vice-President, Corporate Strategy and Head-Agriculture Business at KOEL. The company, which focussed initially on the markets in South and East, has expanded its presence in the West and northern States, where it was getting good response for the power tillers, he said.

Power tillers

The shortage of labour and rising wage costs are the key factors driving the demand for the power tiller machines, mainly from the small and medium farmers, whom KOEL is targeting, Cherukara said.

However, the availability of finance has been an issue in expanding the market. As power tillers are not registered with the Regional Transport Offices/Authority, the financial institutions and banks are hesitant in extending the finance to farmers for purchasing them. “We are trying to work out an arrangement with the public sector banks to finance the power tillers,” Cherukara said.

Farm biz growth

KOEL forayed into farm mechanisation three years ago and has set up a Rs 100-crore manufacturing facility in Kolhapur with an annual capacity of 10,000 power tillers. The farm mechanisation business contributes around Rs 200 crore to the topline of KOEL, Cherukara said. KOEL clocked a revenue of Rs 2,887 crore and net profit of Rs 150 crore during 2017-18.

The power tillers are used for various kind of farm operations such as land preparation, weeding and application of fertiliser. Tillers form part of the affordable mechanisation as the cost of these machines are one forth of a tractor.

KOEL has recently launched a 15 HP power tiller, a ride-on machine, on which the farmers can sit and operate. Also, it has launched a tiller with hydraulics, which should benefit the farmers, Cherukara said adding that the company was also working on a rice transplanter. KOEL has partnered with a Taiwanese firm to introduce hand held farm equipments such as brush cutter among others, he said.