Farm machinery maker Kubota to form capital tie-up with Indian partner Escorts to go global

24, Mar. 2020

Escorts' tractor (Photo courtesy of Kubota Corp.)
Escorts' tractor (Photo courtesy of Kubota Corp.)

NEW DELHI, NNA – Japan’s leading farm machinery maker, Kubota Corp., will form a capital alliance with its Indian partner to share expertise to further penetrate the world’s largest agricultural machinery market and expand beyond.

Kubota will acquire a 10 percent stake in major local peer Escorts Ltd. through a private share placement for about 16 billion yen ($145 million) in June, it said in a statement on Friday.

Demand for reasonable and high-quality tractors has been on the rise not only in India but globally, Kubota spokeswoman Mariko Fujimura at its Osaka headquarters told NNA on Monday. “We hope to launch business operations with Escorts in the global market as well.”

The two agricultural machinery makers established a tractor manufacturing joint venture, Escorts Kubota India Pvt. Ltd., in February 2019, with Kubota holding a 60 percent stake and Escorts owning the remaining 40 percent, according to Kubota.

The local venture, which has an annual capacity of 50,000 units, plans to fully start production in July, the spokeswoman said.

In a bid to step up deeper collaboration, Escorts will buy a 40 percent share in Kubota Agricultural Machinery India Pvt. Ltd., Kubota’s local sales subsidiary established in 2008, according to the statement.

They have yet to fix the transaction value, Fujimura said.

Kubota also eyes setting up a research and development center in the future to develop locally suited products in a speedy manner, the statement said.