This document discusses the agricultural pump market in North and Central Karnataka. It finds that the market size is around 300-400 crore rupees, with the top 3 players (Texmo, CRI, and V Guard) capturing around 40% of the market. Texmo has the largest share at around 20%. It also examines the supply chain models, types of manufacturers, major stakeholders, product types, and impact of drip irrigation. The market for pumps used in drip irrigation systems is around 40-50 crore rupees, which is approximately 20% of the 5-10HP pump market.

1. Agricultural Pump Scenario in North & Central Karnataka

2. Tableof Contents
1 Objectives...........................................................................................................................................................2
2 Methodology ......................................................................................................................................................2
3 Findings..............................................................................................................................................................2
3.1 Supply chain................................................................................................................................................2
3.1.1 Type A .................................................................................................................................................2
3.1.2 Type B..................................................................................................................................................2
3.2 Manufacturer types.....................................................................................................................................2
3.3 Comparitive analysis of stakeholders at various parameters...........................................................................3
3.4 Major players ..............................................................................................................................................4
3.4.1 Comparison between some pump manufacturers ..................................................................................4
3.5 Dealers snapshot.........................................................................................................................................5
3.5.1 Current cope-up mechanismin financial crunch situation .......................................................................6
3.6 Product variants ..........................................................................................................................................6
3.6.1 Categorization of submersible pumps on the basis of H.P........................................................................6
3.7 Agricultural pump in drip irrigation...............................................................................................................6
3.7.1 Market size of agricultural pump in dripirrigation..................................................................................7

3. 1 Objectives
Following were some of the objectives of field visit in North-Karnataka
 Understanding supply chain of agricultural pump
 Understanding market scenario of agricultural pump in North & Central Karnataka
 Understanding current credit arrangements use by stakeholders to meet financial need
 Understanding discounting provided by manufacturers, distributors and dealers
2 Methodology
In order to achieve aforementioned objectives, I visited two districts of North Karnataka (Belgaum and Dharwad) from
25th
September to 27th
September and carried out following activities-
 Semi structured interview with representative of agricultural pump companies at Dharwad agriculture symposium
 Semi structured interview with dealers and distributors of agricultural pump
3 Findings
3.1 Supply chain
Establishedpumpmanufacturerlike Texmo, Shakti, KSB, Lubi etc. practice one tier distribution as represented below-
3.1.1 Type A
Generally,newentrantsandsome oldpumpmanufacturingpractice twotierdistribution asrepresentedbelow-
3.1.2 Type B
3.2 Manufacturer types
Type 1: Those manufacturerwhofollow cash&carry model.
Type 2: Those manufacturerwhoprovide creditdaystodealersordistributors
Pump Manufacturer Dealer Customer
Generally companies deliver the material within 8 days Within 1-2 days
Most of the pumpmanufacturers are based
at Ahmedabad and having
warehouse/godown/C&F agents in
Bangalore and Hubli for serving Karnataka
market.
Almost all dealers who are selling pumps
involve in hardware business. Generally,
dealers receive materialswithin 8days after
order placing.
Mostly customers prefers to purchase
pumps from those dealers whom either
they know or recommended by others.
Pump Manufacturer Distributors Dealers Customer
Generally companies deliver materials within 5-6 days Within 2-3 days Within 2-3 days

4. 3.3 Comparitive analysis of stakeholders at various parameters
Roles &
Responsibiliti
es
 Manufacturing range of agricultural
pumps
 In time delivery of pumps to either
distributor or dealers depending on
supply chain type
 Providing all necessary support to
channel partners
 On time material supply to dealers
 Demand estimation and accordingly
placing orders to manufacturer
 Providing all necessary support to
dealers
 Providing after sale services
(repairing of pumps within warranty
period)
 Providing smooth experience to
customers
 Provide credit support to dealers
(varies from distributor to
distributor)
 Maintaining inventory
 Demandestimation andaccordingly
placing orders to either distributor
or manufacturer
 Providing after sale services
(repairing of pumps within warranty
period)
 Providing smooth experience to
customers
 Provide credit support to customers
(varies from dealers to dealers)
 Need assessment and taking
purchasing decision
 Approaching dealers or distributors
Credit flow
(Type 1
Manufacture
s)
These manufacturers practice cashand
carry model anddo not have provision
of credit days. Dealers require to payat
the time of order
To meet financial requirements,
distributors avail credit from-
 Banks through OD (Secured) or CC
however, these facilities have limit
which depend on dealer’s revenue
and profit (ROI-12 to 14% pa).
Dealers require to payinterest every
month
 Local lenders (Unsecured) at ROI of
24 to 36% pa, require to payinterest
every month
 Availing credit from credit
cooperative society (only members
of society are eligible for availing
credit) of dealers at ROI 11 to 12%
with time periodranges from6 to 12
months.
 Generally, follow cash& carrymodel
To meet financial requirements,
dealer avail credit from-
 Banks through OD (Secured) or CC
however, these facilities have limit
which depend on dealer’s revenue
and profit (ROI-12 to 14% pa).
Dealers require to pay interest
every month
 Local lenders (Unsecured)at ROI of
24 to 36% pa, require to payinterest
every month
 Some dealers sell products at credit
to customers without charging
interest rate. Generally, credit
periodrange between 15 to 45 days
NA
41 2 3
Manufacturers Distributors Dealers Customers
Stakeholder No.

5. ghdk
3.4 Major players
Market size of North& Central Karnatakais around300-400 cr, out of which40% of marketis capturedby three players,namely:Texmo(60cr.), CRI (30 cr.) and
V Guard (30 cr.) another 20-25% market is captured by other reputed companies such as Krilosker, Lubi, Shakti etc. and rest of the market is captured by new
entrantsor local manufacturers. Onthe basisof revenue,pumpmanufacturers canbe categorize intothree categories, namely: leader, challengers and others-
 Texmo is market leader in this market (approx. 20% market share)
 Challengers are CRI, V Guard, Lubi, Krilosker type organizations (approx. 40% market share)
 Others include local manufacturers and new ISI marked manufactured (approx. 40% market share)
3.4.1 Comparison between some pump manufacturers
V Guard Varuna Duke Waterman Torex KSB Texmo Shakti
Supply chain
type
Type A Type A+ Type B Type A Type B Type B Type A Type A Type A+Type B
Distributor
no. in N-KTK
NA 2 NA 2 1 NA NA 1
Dealers no. in
N-KTK
100 40 41 30 45 10 500 20
Credit flow
(Type-2
Manufacture
s)
These manufactures provide 21 to 60
days credit days to distributors or
dealers (interest free) afterwards,
some manufacturers (Lubi,Duke,
Varuna, V Guard) start charging 18%
interest rate pa
 Some distributors provide 15 to 30
days credit period to dealers
afterwards they generally stop
supply of products to dealers
 Rest same as type-1
 Same as type-1 NA
Discounting
Many type-2 manufacturers provide
extra margins todistributors or dealers
if they pay bill amount under credit
days like-
 V Guard provide 3% commission
extra if dealers are able to paywithin
15 days and 1% if dealers are able to
pay within 16-30 days
If end customer is purchasing pumpon
cash then some distributors provide
some extra discount to customers
If end customer is purchasing pump
on cash then some distributors
provide some extra discount to
customers
NA
41 2 3
Manufacturers Distributors Dealers Customers
Stakeholder No.

6. Yearly
revenue
30 cr. 6 cr. 6 cr. 4 cr. 5 cr. 4 cr. 60 cr. 2 cr
V Guard Varuna Duke Waterman Torex KSB Texmo Shakti
Avg. revenue
per dealer
30 lakhs 15 lakhs 15 lakhs 13.3 lakhs 12.5 lakhs 40 lakhs 12 lakhs 10 lakhs
Business
model
Credit Credit
Mostlycashin
some cases
credit
Credit with a
limit
Credit Cash & carry Cash & carry Cash & carry
Credit period
30 days (CF
through HDFC
bank at ROI 18%)
30 days
21 days with
limit of 10
lakhs
(generally 10%
of total order
value)
30 days with
limit of 5-10
lakhs
30 days NA NA NA
ROI after
credit period
18% 18% 18% 18% 18% NA NA NA
Discounting
Within 15 days-3%
Within 30days-1 %
Not provide Not provide
2% within 30
days
2% within 30
days
NA NA NA
Dealer
margin
10% 10% 10% 10% 10% 10% 10% 10%
3.5 Dealers snapshot
Guru Traders Shree Maruti
pumps
Vaibhav Yashwant Rao Manjunath Ashok
Company Local Utkranti Local Texmo Texmo Shakti, Jal Bindu
Sale medium Cash Cash Cash+Credit Cash Cash+Credit Cash
Credit period NA NA 1-2 months NA 1 month NA
Charge
interest
NA NA No (Play on margins) NA Play on margins NA
No. of pumps
sold
1000 500-600 500 1500-1800 800 300
Credit
arrangement
CC+OD by SBI at 12%
with limit of 20 lakhs
No need for taking
credit
CC by BOI, ROI-12% CC+OD at ROI-12% OD:- ROI 14%
No need for taking
credit
Facing credit
issues
No No No No
Sometimes, then avail
credit from local
No

7. Max selling HP
range
7.5 H.P. 5- 7.5 H.P. 5 H.P. 7.5 H.P. to 10 H.P. 5-6 H.P. 5-7.5 H.P.
Guru Traders Shree Maruti
pumps
Vaibhav Yashwant Rao Manjunath Ashok
Selling season November to June November to June November to June November to June November to June November to June
Max
requirement
for credit in
November-December November-December November-December November-December November-December November-December
3.5.1 Currentcope-upmechanismin financial crunch situation
Dealers/distributors avail credit from banks and local lenders to meet their financial obligations, however, during peak season of business existing financial
arrangementisnot sufficienttomeet theirfinancial need.Insuchscenario,eithersome companiesoffershorttime creditpurchases(mostlyinthe monthof feb
and march to meet their annual targets) or dealers/distributors borrow money from family/friends or local money lenders at therate of 2-3% per month.
3.6 Product variants
In this region, majorly submersible pumps (5 H.P. to 20 H.P.) are used by farmers for agricultural purpose.
3.6.1 Categorization of submersible pumps on the basisof H.P
0.5 to 2 H.P. 2 to 5 H.P. 7.5 to 10 H.P. 12.5 to 15 H.P. More than 15 H.P.
Purpose Domestic usage Irrigation Irrigation Irrigation Irrigation
Field Size NA
Small field size of 1 to 3
acres
Medium field size 4 to 12
acres
Large field size Large field size
Price Range
(standard
company)
3000 to 14,000 17,000 to 25,000 27,000 to 42,000 37,000 to 44,000 50,000 and above
Demand (Irri) NA Medium Higest Low Very low
Demand (%
distribution- Irri)
NA 25-30% 45-50% 15-20% 5-10%
Avg life (Irri)
standard manuf.
NA 4-5 yr 4-5 yr 4-5 yr 4-5 yr
Avg life (Irri)
standard manuf.
NA 4-5 yr 4-5 yr 4-5 yr 4-5 yr
Warranty 1 yr 1 yr 1 yr 1 yr 1 yr
3.7 Agricultural pump in drip irrigation

8. Floodirrigationrequireslowpressure-highdischarge pumptomeetwaterrequirementof fieldwhile,dripirrigationrequireshighpressure-lowdischargepumps
because in drip pressure is require to maintainfor efficient usage of drip also, drip increases the efficiency of pumps by 30 to 35% area wise. The cost of high
pressure-lowdischarge pumpsetishigher(4-6 thousandsdependonthe stage of specificationof pumpset) comparedto lowpressure-highdischarge pumpset
for same H.P. Majorly, 5 H.P. to 10 H.P. pump sets are used in drip irrigation.
3.7.1 Market size of agricultural pump in dripirrigation
Market size of agricultural pumpindripirrigationis around 40 to 50 cr (approx.20% of 5 to 10 H.P. market) inNorth& Central Karnataka.

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