China is the second-largest tractor market in the world and the joint venture will boost Sonalika's global expansion plans.
International Tractors (ITL), the flagship company of Sonalika Group and the third-largest tractor manufacturer in the country, on October 21 announced its joint venture with Shandong Luyu Heavy Industry Co.
Shandong Luyu, located at Laizhou Shahe Industrial Park, Shandong province is a player in small size loader, small-medium-sized excavator and forklift in China and also exports the products to many countries outside of China. The group turnover is upwards of $400 million.
This joint venture will enable Shandong Luyu to expand its product line up and offer ITL's range of tractors in the Chinese market. The joint venture shall also assemble the engines for the wheel loader application for captive consumption and other wheel loader construction machinery manufacturers in China.
China is the second-largest tractor market in the world and the joint venture will boost Sonalika's global expansion plans.. Sonalika is also amongst the largest exporter of tractors from India.
Deepak Mittal, Managing Director, ITL, said: "China market has enormous potential for our range of tractors and with our association with Shandong Luyu we are confident of providing farmers in China with best in class technology at competitive price point."
ITL will also provide customized engines for the wheel loader construction machinery application. ITL is already exporting its engines for tractor application apart from using its engines in its own brand of tractors sold in India and globally. The JV company will invest $10 million to create a capacity of 50000 engine and tractor assembly facility in phase-1 and later on further investments will be planned as per the future expansion.Yang Shao Jie, Founder and Chairman, Shandong Luyu Heavy Industry Company, said: "Today we are taking a leap ahead with formation of this Joint venture and I am proud to say that Sonalika will be setting up an assembling plant in China, a first by an Indian company for engines."Get access to India's fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs 599 for first year. Use the code "GETPRO". Moneycontrol Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the Moneycontrol website or mobile app.