Report Analysis

TATA Agrico
By
Naincy Chittransh
IMT Ghaziabad
• Oldest brand under Tata steel.
• Categories – Agri & Construction
Tools, Agri, Industrial and Hardware
Consumables and Tradesmen Hand
Tools.
• The company is keeping up with
industry demand of producing
mechanized products and is
distributed all over the country.
• It is committed towards sustainable
development and guarantees high
quality products.
Market Study - Agri and Garden Hand
Tools
• Products – Hoe, Pickaxe, Shovels, Forks, Rakes, Crowbars, Sickles, Shears, Secateurs etc.

• Findings from 2005 Report:

32% of the domestic production into exports
Maximum demand - Hoe
Agrico - only National level player in this category.
Maximum Production - West Region (46%)
Maximum sales - West (29%) and least in North (19%)
Dealers – 2 to 5 and retailers – 20 to 25 (per city).
Single largest category in export - Mattocks Picks Hoe & Rakes (30%)
Market Study - Agri and Garden Hand
Tools
• Findings from 2017 Report:
Export – Only 3%
Maximum production - North Region(80-85%)
Growth forecast – 4-6%.
Highest domestic production – Secateurs (27%)
Highest Import – Hedge shear (75%) , Highest Export – Loopers (40%)
Falcon is only company established their brand name in highly unorganized market.
Slow growth in Garden tool business due to high penetration of mechanized Power tools.
Market Study - Mechanized Agri
Implements
• Products – Ploughs, Harrows, Cultivators, Levellers, seed Drills, Combines, Reapers, Threshers, Trailers etc.

• Findings from 2005 Report

Highest market demand for Trailers.
Biggest player - Class India Ltd. Rs.85 crs. (34.0%)
Distributors/ dealers account for over 80% of the sales in Uttar Pradesh/ Andhra Pradesh/ Tamil
No single brand dominant
No price regulation in the market
12% domestic growth predicted
Punjab, Haryana, MP, Maharashtra and Tamil Nadu are the key centers for manufacturers.
Market Study - Mechanized Agri
Implements
• Findings from 2006 Report
6.67% export of total domestic production.
Highest market demand and export for Trailers.
Huge initial investments required for Tata Agrico to grow in this segment.

• Findings from 2011 Report

Highly clustered and unorganized in nature.
Demand exceeds supply and quality manufacturers are unable to meet the demand
Harrows and Cultivators have high demand prospects in future.
Highly price sensitive, farmers weak financial position, low acceptance of new products, weak network for transport
Market Study - Agri Consumables
• Products – Tynes, Shovel, Cultivators spring, Disc, Spools, Bushes, Rines, Axles

• Findings from 2006 Report

Highly unorganized 132 crore worth domestic market with 100% domestic consumption.
Key tools – Discs, Tynes and cultivator springs.
Manufacturers mainly concentrated in Northern India.
Consumables industry growing at 16 % p.a
 Market Study - Agri Consumables
• Findings from 2011 Report
Karnal, in Haryana, is a major center for consumables.
20% production for export.
Shovels, rotary blades and discs expected to have the highest growth rate.
Limited market and reach, Price sensitive market.
Suggestion for improvement - Contract manufacturing, Acquiring existing company, Partnering, Sourcing as per
requirement, Multi-location sourcing preferred, Extensive distribution.
• Findings from 2017 Report
• Only 20% into export.
• No online availability of products.
• 65% production in North India.
• 12-14% growth rate expected.
Market Study - General Purpose Hand
Tools
• Products – Spanners, Pliers, Sockets, Screws, Hammer, Bolt Cutters etc.

• Findings from 2005 Report

High export Business – 70% with Spanner – single highest export tool
Highest demand for Hammers and Spanners in domestic Market.
Highest production (88%) and consumption (38%) in North Region.
5% future growth rate.
Suggestions for Tata Steel - Increasing industrial, construction and mining activity and increasing Exports
Market Study - General Purpose Hand
Tools
• Findings from 2011 Report
Highest Manufacturing and consumption (31%) in north India
Export – 59% of domestic production
Key tool – Spanner
Highly competitive, unorganized players, Very high margins required by the dealers, Extensive dealer network, Brand image important,
Findings from 2017 Report
• 55% export.
• Only 4-5% online availability in the country.
• About 60% production in North India.
• 10-12% growth expected.
• High demand of Spanner both in export and domestic market
• Auto and construction sector major contributors for GPHT growth in India with domestic market increasing at a higher rate as
compared to exports.
Challenges for Agrico
• 2005
Low margin – dealers don’t push products
Product priced higher by 20%
Not in export business
Low market penetration – regional and local players giving tough competition.
Threat of duplicate brands
No brand loyalty amongst customers

• 2006
No brand loyalty
High competition from regional brands
High percentage of price sensitive farmers exists in the implement and consumables market
Huge investments required for creating distribution channel, branding and creating awareness
Challenges for Agrico
• 2016
Low visibility of products
Low display of point of sales items
However,
Good SKU’s as compared to competitors
Tata Agrico has 38% stocking share, far ahead of next competition, SR with 6% stocking share

• 2017
Very limited outlets display point of sale items for Tata Agrico
No major promotions offered across outlets covered
Traditional & Garden Tools contribute more than 80%of the overall stocking
Current Industry Situation
• Agriculture - Primary source of livelihood
for about 58% population.
• India is among the 15 leading exporters
of agricultural products in the world.
• The Indian agricultural equipment market
was worth INR 977 Billion in 2019
• Backed by Govt initiatives like Pradhan
Mantri Fasal Bima Yojna, Pradhan Mantri
Krishi Sinchaiyee Yojna, expected to grow.
• Great stress on increasing mechanization
in the sector.
• Labor shortage, ease of financing, rising
income, untapped market are a few
reasons.
Current Industry Situation
• Agriculture equipment industry – driving
force is innovations in design and
introducing advanced machinery.

Major Challenges
• Limited demand due to small farm size
and hence lack of need for huge
investments.
• Farmers being comfortable with
traditional methods.
• Inefficient after-sales services for
equipment due to non availability of
service centers.
Suggestions
• Good Export Opportunities.
• Focus on Direct sales to farmers.
• Opportunity in Southern region of India.
• Increase online availability
• Promotional Activities for establishing Brand Image
• Increase mechanization in the sector
• Help farmers adapt to new ways of farming instead of traditional ways.
• Improve After-sales services.
Thank You