Sonalika tractors to expand manufacturing capacity, eyeing acquisitions
Written by Vivek   
Tuesday, 18 October 2011
Mumbai: The Rs 5000 crore Sonalika Group plans to expand its engine manufacturing capacity at its Hoshiarpur factory in Punjab from 75,000 units p.a. to 150,000 units p.a. in the next fiscal. The factory currently manufactures 1.5 litre and 1.2 litre tractor and car diesel engines. The company plans to increase its tractor manufacturing capacity from 60,000 tractors a year to 1 lakh, within two years.

The company is in talks with private equity players to sell 10 percent stake for around Rs 450 crore. The funds will be used to add production capacity and to acquire an overseas company.

According to Sonalika Group Chairman, LD Mittal, the expansion will happen in a phased manner with minimal investment, as the company already has enough installed capacity.

Sonalika plans to double its exports, from 5,000 units to 10,000 units annually, through product launches and tie-ups. The company also plans to increase its domestic market share from the present 10 percent to 12 percent.

To increase exports, the company is exploring overseas assembly operations in the US and Turkey

Sonalika has also chalked out a Rs 100 crore investment next year, wherein it plans to set up a manufacturing facility in the south, with an installed annual capacity of 30,000 tractors. The company has already received an offer from one of the southern states.

The company is also planning to set up a vendor park near the Hoshiarpur unit.

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