SITL | Integrated Manufacturing Key To Maintaining Quality & Growth

SITL | Integrated Manufacturing Key To Maintaining Quality & Growth

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The tractor industry in India has been on a downward curve for the last two-and-half years. While manufacturers see a revival on the cards, Sonalika International Tractors Ltd (SITL), the third largest tractor maker in the country believes that to maintain quality and growth, integrated manufacturing is key. The company's facility in Hoshiarpur, Punjab – also its mother plant – is claimed to be the world's largest integrated tractor manufacturing plant. We recently interacted with Raman Mittal, Executive Director, Sonalika International Tractors Ltd about the company's plans to increase its global footprint, and trends for the future.

MANUFACTURING CAPABILITY

SITL manufactures almost all the components that are required for a tractor, including engines, gears, transmission, hydraulics, sheet metal, cabins and plastics. Seats and exhaust systems will be the next set of systems to be built in-house. Tyres, battery and fuel injection pumps are the few components that SITL sources from other suppliers. In addition to the assembly of aggregates, the company engages in core machining and manufacturing in-house.

In the case of engines, machining of components such as cylinder heads and block are undertaken by SITL, and it also manufactures its own gears. Hydraulic components are also manufactured internally, and so are sheet metal components. SITL also manufactures its own plastic components, through in-house manufacture of dyes and its injection moulding shop.

The main advantage of such integrated manufacturing is the lack of dependency on a vendor ecosystem or on new technologies, noted Mittal. The company can develop its own technologies of transmission or engines, and apply them on its products quickly. Mittal added that machines, equipment and testing at the facility are likely on par with Japanese and European automotive OEMs. Also, SITL believes in not only making products in India, but also looking at making quality in India.

The company has a market share of 12 % currently, and offers a vast portfolio of tractors, ranging from 20 hp to 120 hp. The company is working on launching a 120 hp CRDI engine. The company exports to over 80 countries, with market leadership in three. Mittal informed us that the company is now expanding its market reach to countries such as the US, Europe and Africa, by building products that are global in nature.

TRACTOR MARKET TRENDS

The biggest change globally, with regards to technologies being adopted into tractors and other off-highway vehicles, is in the form of emission standards. Mittal said the drastic change in emission norms is a key threshold to move forward with global operations. In line with current norms, the company has launched Common Rail Diesel injection (CRDI) engines. Another important factor that is yet to gain traction in the domestic market is in the improvement of comfort features by reducing NVH, and improving touch-and-feel. Customers are gaining more awareness on such requirements, and are demanding for such features in tractors, Mittal said.

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SITL wants to be independent in terms of developing powertrains that are compliant with European or US norms, as well as improve the overall vehicle quality. Mittal also said that SITL is one of the few tractor manufacturers to make air-conditioned cabins in-house, which is an important export-related factor.

All R&D work is carried out by about 250 engineers at the Hoshiarpur plant. The R&D set-up consists of endurance laboratories, field laboratories, emission laboratories, design centre and field testing area. The company also ties up with its distributors and franchisees to carry out filed testing in international markets. In addition, SITL works in partnership with engineering companies for development of key components. Additionally, a separate design centre looks into the manufacturing of dyes. SITL invests almost 5 % of its turnover in R&D, and this is expected to grow further with the development of newer products and platform, noted Mittal.

The company also has a training centre that carries out internal technical training to dealers and other service teams of the company. It also imparts external training to farmers to educate about the best usage practices and benefits of using tractors.

INVESTMENT & FUTURE

Over the last three years, SITL has invested about Rs 500 cr at its Hoshiarpur plant, increasing annual production capacity to 200,000 units from the earlier 75,000. The additional production volumes will be available this year onwards, said Mittal, who added that the company today is the only tractor maker to carry out complete robotic painting.

Mittal said that at its peak, the tractor industry in India had a market size of between 5.75-5.8 lakh units. India has a total of about 6.5 lakh villages, which shows potential for further penetration of the industry. Mittal also noted that there is further opportunity for exports to grow between 25 and 30 % in five years, which currently accounts for about 10-12 % of the company's business. In all, SITL believes the tractor industry to show growth in the coming years.

Text: Naveen Arul