Right track

New Delhi, July 19: Mahindra and Mahindra’s bid for Tractorul SA, the largest tractor manufacturer in Romania, has been shortlisted. The final decision will be taken by the end of August.

Along with the Indian tractor and utility-vehicles company, Romanian conglomerate MYO- is also bidding for Tractorul. MYO- is into agricultural equipment business.

The state-owned Romanian tractor company was put on auction by the government as Italy’s Landini had decided against buying it after prolonged negotiations.

Sources said, the Romanian government would directly negotiate with bidders for its 80 per cent stake in Tractorul. The plan to buy Tractorul is part of M&M’s strategy of going global.

Earlier this month, M&M said it had put in a formal bid with AVAS, the government agency in charge of the privatisation process in Romania. M&M is not the only Indian company interested in Tractorul. According to reports in the Romanian media, the Tata group has also evinced interests.

Tractorul has a capacity of 18,000 tractors per year in the 26-100 HP category. Its integrated plant in Brasov makes 24,000 diesel engines for tractors and has a castings and forging capacity of 35,000 tonne and 20,000 tonne respectively.

At present, over 7 lakh Tractorul machines are in use Turkey, Egypt and Iran.

If the deal sails through, it would give M&M a strong foothold in the European market. Romania is set to enter the European Union in 2007.

The Romanian tractor market is small, some 6,000-odd units a year. Compared with this, 1.9 lakh tractors were sold in India in 2003-04.

Mahindra (China) Tractor Co, a joint venture between Mahindra Overseas Investment Co (Mauritius) Ltd and Jiangling Motor Co group, had acquired Chinese tractor firm Jiangling Tractor Co last year. This would enable M&M tap the tractor market in China. It would also source parts cheap for its Indian and overseas manufacturing units.