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  • HOPE TO SHOW YOU SOME LESSONS EXPERENTIALLY
  • THEY DID NOT BRING SOLUTIONS BUT BASIC QUESTIONS AND LEARNT KNEELING DOWN
  • KEY TO SUCCESS – INDIAN MANAGEMENT Multi Pronged Strategy Dove to Selling washing soaps to bathing soaps Leverage R&D capability State of the art cars to capture the A Segment High Aspirations Low Income Market Shampoo Sachet/CIGGIE STICK/PCO Logistics HLL Rural thrust-DRILLING THRU ROCK SUZUKI OWN TRUCK FLEET /SERVICE STATIONS ITC chaupal-rural microcredit LOCAL SOLUTIONS AIRTEL-DEFYING THE CAPITAL MYTH
  • GM and Ford – Never recognized the fact that the 2-box cars are the ‘big market’ Pepsi, Coca-Cola, thirst quencher at 10 bucks kellogs – Taste of India ENRON –DIDN’T READ REGULATORY MINEFIELD “ Staying power is meaningless if staying on has no meaning”
  • ASSUMPTION-INDIA IS LIKE WE ARE-THE ARROGANCE OF CORPORATIONS Unified global Strategy replicated in India Kellogs Coke Advertising – Initial days- international Ads---NOW THANDA Hertz Car Rental DishWashers --------------------------------------------------------- Tastes for India – Not kept in mind KFC –FELL FLAT Kellogs – Parantha advt. --------------------------------------------------------- Indian Values and Attitudes Whirlpool– Grahini takes pride in her work So convenience can’t be pitched. Finally Mummy ka Magic DishWashers=WATER/SOAP/GRIME/SERVANTS ------------------------------------------------------------- ‘ Non- value right’ products Lacoste PierRe Cardin GM and Ford did not launch a 2 Box product ----------------------------------------------------
  • STAYING POWER IS MEANINGLESS IF STAYING HAS NO MEANING
  • Its all about consumer Insights Come with an open mind Learn Learn Learn / Unlearn Unlearn Unlearn/ Sachet Story of HLL Cigarette Retailing

Agri.evolution Agri.evolution Presentation Transcript

  • Changes needed in Agriculture Equipment Future Imperatives Presented by – Rohtash Mal, President – Tractor Manufacturers Association, India Member CII National Committee on Rural Development, India ED & CEO Escorts Ltd
  • “ Emerging India” A Fast Growing Market
  • India is set to become 3 rd Largest Economy by 2014 (%) Population growth is slowing Literacy is rising GDP Ranking – PPP 4 th , Nominal 11 th Agriculture growth draws highest attention from Government of India to take the overall GDP growth in double digit figure. 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 2.2 2.1 1.8 1.5 0 0.5 1.0 1.5 2.0 2.5 1901-1950 1951-1980 1981-1990 1991-2000 2001-2010 (%) 17 52 65 80 0 20 40 60 80 100 1950 1990 2000 2010 (proj) (%)
  • India has a Vibrant Private Space
      • 100 Indian Companies have market cap of over US$ 1bn
      • 1,000 Indian Companies have received foreign institutional investment
      • 125 Fortune 500 companies have R&D bases in India
      • 390 Fortune 500 companies have outsourced software development to India
      • 2% bad loans in Indian banks
      • 80% credit goes to private sector
  • “ 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 types suited for round the year cultivation
    • Ranks first in production of Pulses, Tea, Jute and allied fibers
    • Second largest producer of 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,
    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 Agricultural Equipment Industry: The Agricultural Equipment market is driven by several factors GOVT. INVESTING 244 Mil $ PER DAY IN RURAL DEVELOPMENT
  • Potential Exists in Improving Farm Power per Hectare Source : World Bank Despite India is Largest Tractor Producer HP / Ha is low. West Germany Italy UK France Poland Korea USA Turkey Brazil Russia Pakistan India
  • Credit Squeeze Credit Squeeze, Drought and Stock Correction Credit Squeeze & Drought CAGR 1974-79 : 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
  • Source: Sinocast China Business Daily, 01/04/2006 United States [2.4%, 95%] Western Europe [3.9%, 95%] Former Soviet Union [14.4%, 80%] 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 & Farm Mechanization Huge Gap in Mechanization levels Brazil [14.8%, 75%]
  • Mechanization Potential Across Ag Value Chain Tillage& Seedbed Preparation Sowing/ Planting Fertiliser Application Irrigation Harvesting Post Harvesting Inter Cultivation Plant Protection Crop Cycle Rice Horticulture Sugarcane Potato Maize etc Grains Horticulture Sugarcane Potato Maize etc Straw/stalks Forage All Crops All Crops Storage Trash Management All Crops All Crops Crop Care Mechanisation High Low
  • Huge Potential in Tillage and Seeding & Planting Global Scenario Current Indian Practice Right size and price are imperative for leveraging the potential
  • Enormous Scope Exists in Plant Protection Mechanisation Global Scenario Current Indian Practice Appropriate technology shall give the first mover advantage
  • Grain Harvesters in India are limited to few crops and Geography Global Scenario Current Indian Practice Small but efficient harvester for all crops needed
  • Shortage in Farm Labour Pushing Mechanization in Harvesting Solutions Global Scenario Current Indian Practice Sugarcane & Cotton harvesting is high priority Agenda
  • Vast Potential is opening up in Hay Forage and Trash Management Global Scenario Current Indian Practice Emerging market for Baler, Chopper and Silage equipment
  • Key To Success In Indian Market Right sizing of technology & Adoptability
  • Why Adaptability is so Paramount in Indian Context? Some case stories
    • Long Haulers
        • Unilever (HLL)
        • BAT (ITC)
        • Suzuki Motor / Maruti
    • Recent Starters
        • Hyundai Motor
        • LG
        • Samsung
        • GE
    Some Success Stories Localisation Is All Very Well But these are the true road warriors
  • Success in India …what made it happen?
      • General Motors
      • Ford
      • Kellogg
      • Pepsi
      • Coke
      • Enron
      • Electrolux
      • Whirlpool
      • Reebok/Nike/Adidas
      • …… .. and the list goes on.
    “ Failures”
  • Failures in India… why ?
    • Long haul market, ‘hang in there’
    • Not for the faint-hearted
    • Under-investing as bad as over-investing
    • Demands strategy complexity –folks and strokes
    What India means today-Rx An amazing opportunity to Fail….. Or Succeed
    • Build costs in tandem with revenues
    • Needs international fundamental questions-not solutions
    • Exist on Earth and Mars concurrently in terms of market and technology practices
    What India means today-Rx An amazing opportunity to succeed …… ..…or to fail
  • 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 Price is key to success.
  • “ ESCORTS GROUP” Strive to propel change in the Indian Farming Landscape by leveraging its expertise build over 50 years’ experience in India & Global markets.
  • Escorts Businesses
  • Escorts Businesses Agri. Machinery Group
    • Escort is a Technology Driven, Customer Focused Company with a world class Research and Development Center.
    • Has global footprint spread across 20 countries
    • Escorts is the first tractor manufacturer in the world which has been awarded TS 16949 Certification.
  • Thank You! Jai Kisan