Farm Implements & Machinery
The farm machinery and implements sector of Pakistan produces large variety of agricultural implements and machinery including tractors. The industry, however, is dominated by micro and small enterprises most of which are operating from their backyard in small workshops mostly using locally produced conventional machinery. These units, ubiquitous all over Pakistan, outsource components to other small scale operators. The cities of Daska, Faisalabad, Okara and Mian Channu house major clusters of farm implements manufacturers. The farm machinery and implements manufacturing segment is large, fragmented and mostly unorganized. The industry is producing agricultural, horticultural and forestry implements for soil preparation and cultivation (ploughs, disc harrows, laser levelers, seeders planters, seeding drills, rotary tillers), harvesting and threshing machinery (paddy thresher, straw balers, pick up balers, mowers including cuter bar). The industry, which at present caters mainly to local market, is faced with issues of lack of standardization and quality, absence of design & engineering capabilities, weak management structures and financial muscle of manufacturers, unawareness about modern manufacturing practices and performance standards of equipment produced, untrained and low skilled workforce and prevalence of conventional obsolete and inefficient technology and production assets. Despite these issues, the industry has been able to manufacture and satisfy the needs of domestic farming sector in a big way. Some good manufacturers have even started exporting to Africa and Afghanistan. Little effort has been seen in the organized segment to undertake manufacture of standardized farm machinery and equipment for supply to local market. However, the effort had to be aborted for the reason of price in-competitiveness. The farming communities in Pakistan could not be attracted to buy better but expensive equipment due to affordability issues. The National Agricultural Research Council of Pakistan has also developed standardized design & drawing based quality equipment. But for some reasons, there is no co-ordination between NARC and private sector manufacturers. The Agricultural Engineering Departments of the Provincial Governments and their performance have also been below mark. A “Centre for Agricultural Machinery Industries” was established with financial assistance from Dutch Government at Mian Channu which serves as common facility centre and training institute for the cluster there. Overall, the current state of affairs is a mixed bag of performances and opportunities.
Up-gradation of technology, research and development for new products, product development for after-market and non-mainstream OEM’s, product designing and standards development, vendor development for specialized manufacturing
Exports and Potential
The world trade market of over US$ 4 billion exists. Most of this market is for high end standardized products. But due to affordability issues in poor agricultural countries, a market for low end products also exists. Some estimates are that the world trade market for low end products is around US$ 500 million. Pakistan has already entered this low end international market and agricultural implements are currently exported to Nigeria, Kenya, Tanzania, Morocco, Ghana, Afghanistan, etc. All of this export is made through trading export businesses who work as consolidators and exporters operating in these countries. The export performance in numbers is, however, negligible. The improvement in current state of affairs can be managed through capitalizing on existing strengths and by overcoming the weaknesses. Pakistan exports farm machinery and implements to quite a large number of African countries including Nigeria, Kenya, Tanzania, South Africa, Morocco, Ghana and regional countries including Bangladesh, Afghanistan and UAE etc. Most of these exports are made by consolidators, engineering or trading companies securing export orders and getting parts developed through various vendors. Potential exists for exporting to African and regional countries and development of parts for European companies. The chart below depicts Pakistan’s exports of farm implements during the last 5 years.
Tractor Industry Overview
Presently, there are 5 manufacturers/assemblers of tractors in Pakistan. The two leading players manufacture Massey Ferguson and Fiat brands under franchise arrangement. The industry produces 50, 60, 65, 75 and 85 HP tractors. The industry produced 54,375 units during 2007-08 with major share of 98% going to Millat and Al-Ghazi Tractors with combined production volume of 53,242 units.
Exports and Potential
Tractors are being exported to regional countries mainly to Afghanistan. Potential exist for exporting 100 HP – 200 HP tractors to India. Tractors being manufactured in India are relatively of higher cost and power and there is a niche market for low cost tractors.