KARACHI: Millat Tractors Ltd (MTL) has signed a fresh agreement with AGCO Corporation to export Pakistan-made Massey Fergusons tractors through AGCO’s global network.
“This has been Millat’s goal for a long time as the previous agreements restricted export of tractors,” MTL informed the stock exchanges on Nov 11, 2015.
Babar Mobeen of BMA Capital Management said that on a sustainable basis, MTL sells 28,000 tractors per annum with the maximum capacity to produce 45,000 units. “This reflects utilisation of 62 per cent, resulting in a spare capacity of 17,000 tractors. The contract would enable the company to efficiently utilise its idle capacity,” he noted.
On the other hand, the overall tractor segment posted a decline of 33pc YoY during 4MFY16 to reach at 9,148 units due to delay in the launch of provincial tractor subsidy schemes. The Punjab and Sindh governments had announced subsidy of 25,000/29,000 tractors in budget 2015-16.
According to Mohammad Tahir Saeed of TopLine Securities, tractor manufacturers approached the governments to shelve the scheme in case the government was running short of funds.
“Anticipation of the official launch of the scheme is causing farmers to hold back their purchases,” he said.
Millat Tractors sold 5,721 units in 4MFY16 compared to 8,496 units in the same period last year.
Al-Ghazi Tractors sales stood at 3,132 units in July-Oct 2015 as compared to 4,894 units
in the same period last year. Sale of Orient IMT Tractor increased to 293 units from 166 units.
Published in Dawn, November 14th, 2015
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