Financial Daily from THE HINDU group of publications
Saturday, Apr 09, 2005
Alliances & Joint Ventures
Agri-Biz & Commodities - Farm credit
Bengal Tools ties up with UCO Bank
Kolkata , April 8
BENGAL Tools Ltd, which is engaged in marketing power tillers, has tied up with UCO Bank for financing its products.
A special scheme, named UCO Shrachi Sifang Krishi Jyothi, has been worked out under which the bank will finance without margin money and the usual rate of 15 per cent not being charged. The repayment period is seven to nine years. The scheme will allow a moratorium of six months to a year - more than the usual repayment period of five years.
Power tillers, explained Mr Ravi Todi, Director, Bengal Tools, are mostly funded by banks. Such financing is normally done under ordinary banking norms, which are sometimes tough for small and marginal farmers. The latest tie-up will help promote the use of power tillers among small agriculturists, he stated.
The Government, it is pointed out, is placing considerable emphasis on rural credit; tie-ups with banks such as UCO may be viewed in the backdrop of such emphasis. Power tillers, Bengal Tools Ltd pointed out, are being distributed under subsidy through different State governments.
"The Indian market (for power tillers) is about 17,000 units. The eastern and southern States are the main markets. Bengal Tools plans to consolidate its presence in these markets as well as increase its network", Mr Todi maintained, adding that West Bengal was among the most important markets for power tiller manufacturers.
It may be mentioned here that the market is dominated by players such as VST and Kamco, both of which are based in the southern region. Bengal Tools is the dominant player in the east.
In talks to enter Chinese market
The company has started talking to a few Chinese suppliers for bringing in advanced agricultural machinery. Some of the products that may be introduced in the local market are being identified.
Bengal Tools, Mr Todi observed, has lined up an expansion plan, which will, among other things, feature tie-ups with Chinese players. While a separate product line will be brought about for this purpose, the company has also lined up plans to upgrade and add value to its existing products.
Its proposals may well include the introduction of new models, tapping fresh distribution opportunities that are offered by Self Help Groups and increase all-India sales targets by a significant margin.
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