Excerpts from an exclusive interview with Parvez Ali, Chief Executive Officer Al-Ghazi Tractors

SHABBIR H. KAZMI, Special Correspondent
Mar 19 - 25, 2007

PAGE: How many tractors are being produced in Pakistan annually?

Parvez Ali: The region now constituting Pakistan has agrarian economy since the times of Moenjodaro. Even today most of the industries - sugarcane for sugar, cotton for textiles, etc. is directly dependent on agricultural crops and tractor is the bulwark of agriculture. Therefore, tractor manufacturers play very important role in Pakistan's economy. Assembly-cum-manufacturing of tractors in Pakistan goes back to the early eighties. Initially five tractor-manufacturing units were sanctioned by the government starting with low volumes of just about 10,000 tractors per annum, which has steadily seen a tremendous growth over the years specially last year when the industry witnessed a spurt. According to the figures released by the Pakistan Tractor Manufacturers Association, 49,462 tractors were delivered in the last fiscal that is the period ending June 2006, compared with 44,231 units sold the year before. Sales are likely to exceed 52,000 units during the current financial year.

PAGE: What level of deletion has been achieved?

Parvez Ali: Indigenization has been the principal focus of bona fide tractor manufacturers who since 1983 have been raising vendor associates to achieve a high degree of local content. Tractor manufacturers are the founding fathers of the mother local vending industry which starting with manufacture of components for tractors with technological, technical and financial support from tractor manufacturers is now supplying parts to the entire automobile sector as also to other industries. The level of indigenization for tractors of 55hp range, which is the standard tractor in Pakistan, exceeds 90 percent. On higher hp ranges where the volumes are low, it is around 75% - as in the case of Al Ghazi Tractors.

PAGE: What is Al-Ghazi's share in the total market?

Parvez Ali: Over the years Al-Ghazi has by the Grace of God emerged as the market leader and as of today we enjoy a market share of 53%, a shade ahead of Millat Tractors, which is a company to respect and which has played a commendable role in the total economic effort. Other than manufacturing and indigenization to raise the vendor network, both companies have invested heavily and whole heartedly in developing a dealer network with thousands of workshops in every nook and corner of the country to bring after sale support at the doorstep of the farmer. Our tractors are thus a household name all over the country.

PAGE: Which are other tractor manufacturers in Pakistan?

Parvez Ali: There are over 15 approved tractor manufacturers on the list of Ministry of Industries. Most of them being screwdriver operations are dormant. Together, Al-Ghazi and Millat Tractors, control 99% of the market share. The other assembler is Universal, which sold 544 tractors during the last fiscal year as reported by PTMA.

PAGE: Does Pakistan still import tractors?

Parvez Ali: The government has allowed import of CBU tractors at zero-rated tariffs - free of duty and sales tax. Some 4000 tractors were imported by five or six companies. Around 3,000 were Belarus, a brand enjoying a small niche market. These tractors in Pakistan are used mostly for transportation and haulage purposes.