New Delhi: International Tractors Ltd, Flagship Company of Sonalika Group and third largest tractor manufacturer in the country announces its joint venture with Shandong Luyu Heavy Industry Co., Ltd to enter into the Chinese market.
Shandong Luyu Heavy Industry Co., Ltd
located at Laizhou Shahe Industrial Park, Shandong province is an established
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
China is second largest tractor market
of the world, and is slowly gaining relevance for global tractor manufacturers
due to changing market and emission norms which offers an opportunity for
Sonalika to expand its global footprint into China. Sonalika which is already amongst the largest
exporter of tractors from India would add China to its overseas presence with
this joint venture.
This joint venture shall enable Shandong
Luyu Heavy Industry Co., Ltd. to expand its product line up and offer globally
accepted 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 of Shandong Luyu Heavy
Industry Co., Ltd and other wheel loader construction machinery manufacturers
The joint venture agreement was signed
at ITL’s office, New Delhi on Saturday, 19th October 2019 in
presence of Dr. Deepak Mittal, MD, Sonalika-ITL and Mr. Yang Shao Jie, Founder
and Chairman, Shandong Luyu Heavy Industry Co., Ltd. The name of the joint venture entity is
proposed as Luyulika (Laizhou) Agri Machinery Company Limited.
KPMG in India was the exclusive
financial advisors for Sonalika for this transaction.
Commenting on the Joint Venture, Dr. Deepak Mittal, MD – ITL said, “Today ITL has presence in more than 120 countries and is a trusted brand among more than 1 Million farmers across markets, in both India and overseas.
market has enormous potential for our range of tractors and with our
association with Shandong
Luyu Heavy Industry Co., Ltd, we are confident of providing farmers in China
with best in class technology at competitive price point.
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. JV Company will invest USD 10 Million to create a capacity
of 50000 engine & tractor assembly facility in phase-1 and later on further
investments will be planned as per the future expansion.
Mr. Yang Shao Jie, Founder and Chairman, Shandong Luyu Heavy Industry Company Limited said, “We are pleased and excited about this Joint Venture with Sonalika Group and we believe that this Joint Venture will be able to penetrate deep range of Sonalika tractors in China. This Joint Venture shall also help Shandong Luyu Heavy Industry Co., to offer the globally accepted engine technology of Sonalika to its customers. 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.
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