The new facility has been conceptualised to expand ITL's share of the southern Indian tractor market in its total sales volumes to 15 per cent from 5 per cent in the next two years.
"We have identified three states, including Karnataka, Chennai and Andhra Pradesh for setting up a new tractor manufacturing facility in one of these states and we have written to these states for allotting land to us for our proposed facility," Sonalika Group Chairman L D Mittal told PTI.
"We want to tap the southern market in a better way by having a new facility," he added.
Sonalika Group has proposed to set up the new tractor facility on 25 acres of land with an installed capacity of 25,000 tractors per annum. "The investment in the proposed facility could be in the range of Rs 100 crore," he said.
Currently, over 30 per cent of the company's tractor sales are in the traditional markets of Punjab and Haryana.
Most recently, Sonalika commissioned a new plant with an installed capacity of 25,000 tractors in Bihar at an outlay of Rs 50-55 crore. This plant caters to eastern Uttar Pradesh, Bihar, Jharkhand, West Bengal, Orissa and the northeastern states.
The company currently has an installed capacity for manufacturing 55,000 to 60,000 tractors per annum. "We want to scale up this capacity to 100,000 tractors per annum in a phased manner," he said.
Sensing demand for high capacity tractors in global markets, ITL is working on developing a 120-hp tractor for the first time for European and African markets.
"This tractor (120 hp) will be meant for big land holdings like in European and African countries. It will be rolled out by end of this year for exports," he said.
The company currently offers a 90-hp tractor, which is the largest in its wide range of tractors.
Bullish over the growing size of the tractor market in the current fiscal, Sonalika Group is aiming at 50 per cent jump in sales volumes. "Last fiscal, we sold 45,000 tractors with growth of 35 per cent. This fiscal, we are aiming at a 50 per cent increase in sales," he said, adding that the tractor industry will grow by 15-20 per cent this year.
Similarly, the company is also eyeing a 50 per cent jump in overseas sales as it exports its tractors to 58 countries.
The Sonalika Group has also decided to set up an assembly line in Turkey to expand its export market. "We have already set up an assembly line in Cameron and Nigeria and now we plan to have another line in Turkey," he said.
The company has set a target to achieve sales of Rs 3,500 crore by the end of the current fiscal against a turnover of Rs 2,500 crore last fiscal.