New Delhi: Mahindra and Mahindra Ltd (M and M Ltd), part of the USD 19 billion Mahindra Group, headquartered in Mumbai, India, announced its second foray into Turkey through the acquisition of Erkunt Traktor Sanayii A.S. (Erkunt), the 4th largest tractor brand in Turkey. This transaction is expected to close by the last quarter of calendar year 2017.
This association with Erkunt on the back of the Hisarlar acquisition earlier in the year will help in growing Mahindra’s farm equipment business in the strategic market of Turkey.
With two strong brands such as Mahindra and Erkunt coming together and with a wider combined product portfolio, this association will offer complete mechanization solutions to the diverse needs of Turkish farmers, thereby creating a more significant presence in Turkey. The association will also build an export business especially in the neighboring markets of the Middle East, CIS and Europe.
Commenting on the development, Dr. Pawan Goenka, Managing Director, Mahindra & Mahindra Ltd. said, “At Mahindra’s Farm Equipment Sector, our strategy is to globalize aggressively and also expand our portfolio to include various new categories of tractors and farm machinery. Turkey is a very important market in our globalization journey and we wish to participate in its entire agri-mechanization landscape. The acquisition of Erkunt will enable Mahindra to expand its footprint in the world’s 4th largest tractor market.”
Rajesh Jejurikar, President, Farm Equipment Sector, Mahindra and Mahindra Ltd. said, “Erkunt is a strong local Turkish brand that has grown very rapidly over the last decade, by expanding its product range. We look forward to collaborate with the Erkunt leadership team to bring synergy and expand our footprint in Turkey.”
Mahindra will also acquire a foundry unit, Erkunt Sanayi A.S., which is a full service provider, from castings to machining. The Foundry Unit focuses on engine blocks, cylinder heads and transmission cases and has a strong customer portfolio including JCB, MAN, Ford and Deutz. The foundry unit had revenue of USD 47 million during 2016.
Established in 2003, Erkunt Traktor manufactures and markets tractors under Erkunt brand in Turkey. It also exports tractors to various global markets under the ArmaTrac brand. Last year, the company sold a total of 4,700 tractors while posting revenues of 314 million Turkish Lira. The company rolls out 23 tractor models ranging between 49 bhp to 108 bhp. M and M said the investment may go up to Rs.322 crore for acquiring 100 per cent stake in Erkunt Sanayi AS (Erkunt Foundry). The entity has a production capacity of 65,000 tons in casting and 32,600 tons in machining. It operates through three different entities around Ankara.