Mahindra-Yueda joint tractor venture in China inaugurated

Mr. Anand Mahindra, Vice Chairman & Managing Director, Mahindra Group, and Mr. Hu Youlin, Chairman, Yueda Group, recently inaugurated the tractor joint venture formed between the two groups. The joint venture ceremoniously rolled out its 125hp tractor at a colourful ceremony at the JV’s new 38,000 tractor capacity plant at Yancheng, China, which was attended by senior Government officials of Jiangsu Province and Yancheng City.

The new company, Mahindra Yueda Yancheng Tractor Company Ltd. (MYYTCL), has been formed between Mahindra’s Farm Equipment Sector (FES), one of the world’s top tractor brands and the market leader in India, and Jiangsu Yueda Yancheng Tractor Manufacturing Co. Ltd., a leading Chinese tractor manufacturer. The registered capital of the JV is RMB 265 million. Mahindra holds 51 per cent share in the JV through its subsidiary, Mahindra Overseas Investment Company (Mauritius) Ltd.

This is the second tractor venture of Mahindra in China. Its current tractor business is known as Mahindra China Tractor Company Ltd. (MCTCL). With MCTCL’s Feng Shou and MYYTCL’s Jinma brands, Mahindra’s tractor operations in China are well set to exploit the fast growing market.

Mr. Anand Mahindra said: “I have always believed that India and China have unique and complementary strengths, which, when pooled together, can take on the world. We already have a successful joint venture with Jiangling Tractor Company. This JV between M&M; and Yueda Groups will further combine Indian entrepreneurial and managerial skills with Chinese competitiveness and efficiency. I am sure this formidable combination will contribute substantially towards realising our ambition to be the leading tractor manufacturer in the global market”.
Mr. Anjanikumar Choudhari, President, Farm Equipment Sector, Mahindra & Mahindra Ltd., observed: “The inauguration of this joint venture is a significant step in our plans for the China market. The Jinma brand is extremely strong in the domestic China market, and the company is also one of the biggest exporters of tractors. Along with our current operation at Nanchang, we will have a much larger scale on which we plan to build up our business in China. We will have a product range going up to 125hp. We will also have a large manufacturing base which will be used to not only produce for the domestic market but also for low-cost manufacture for export”.

The tractor industry in China has grown from about 56,000 units in 2003 to 2,22,000 tractors in 2008, a CAGR of 32 per cent. The new agriculture policy introduced by the Government in 2004 has played a major role in this growth with a number of positive measures, including abolition of tax on agriculture.

The new JV is located in Yancheng city in Jiangsu Province. Its product portfolio comprises tractors ranging from 16hp to 125hp. MYYTCL will have a strong distribution network covering 25 provinces in China. It will also build on the existing export operations with a footprint in more than 60 countries, including the US, South America, Russia, Europe and Africa.

The Yueda is one of the top 100 business groups in China, has a turnover of $7.3 billion and has a presence in various sectors of the Chinese economy, including automobiles and tractors, coal and mining, infrastructure and real estate, textiles and garments, hotels and supermarkets. Over the last 29 years, Yueda has established itself as an international group with partnerships and joint ventures with reputed international companies like Kia Motors from Korea, French supermarket major Carrefour, Triumph from Germany, and Fuji and heavy construction machinery giant from Japan. The group employs more than 30,000 people.