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Status of Innovation and Technology in Pakistan Tractor Industry

Irfan Aqueel, Millat Tractors Ltd, Lahore

Tractors and farm machinery usage in Pakistan started in the early 1960’s by importing completely built-up tractors and machines. After initial experiments, it was felt that these machines were either too expensive for our farmers or not suitable for our requirements - small farm size and complicated irrigation system. However, advantages of farm mechanization versus traditional bullock farming were well accepted and recognized by the farming community.

The local entrepreneurs saw a gap between the available hardware and the farmers need hence the initiation of a gradual process of local development with the help of foreign partners. This shift was well planned in the light of Govt. of Pakistan indigenization policies and under the technology transfer agreements between the local industry and their foreign partners. The process of indigenization helped in developing a strong engineering infrastructure in the country and exposure to the new manufacturing technologies.

The industry, especially Millat Tractors Ltd. (MTL) established their own R & D facilities in the 1980’s, equipped with qualified team of engineers and necessary infrastructure to facilitate the local production and adoption of new technologies. The innovation process is an ongoing activity in product development, work processes and services to the customers. Total quality management and quality circles practices are well in place which is helping the Company foster an innovative culture. Today, the local tractor industry has indigenization level above 90% and offering an extended range of tractors and farm equipment to its customers. Besides tractors and farm machines, the Company has diversified its product line and also offers; prime movers, diesel generating sets and forklift trucks.

MTL’s technical up-gradation process has been highly instrumental in the Company achieving a market share of over 60% in the local market and eventually gaining access to the global market through the AGCO network. Today, the local tractor industry is highly competitive in the region, especially with China and India, in terms of product specs, prices and quality.

As mentioned above, both the vendors and foreign buyers have strong impact on innovation process in terms of technology exposure and development of products as per market needs. The local industry first got exposure to better specs of products and components supplied by international vendors and then developed and modified locally as per customers’ needs and affordability. This process resulted in creation of more jobs, skill development and lowering product cost. Likewise, the foreign buyers’ demands have forced the industry to improve its products and efficiencies for global competition. It is expected that MTL’s new export venture with AGCO will accelerate its product innovation and development process and in the years to come local tractor and farm machinery industry is expected to follow its footprints.

The Chinese investment, particularly CPEC, is expected to have considerable impact on technology up gradation in the shape of introduction of new technologies and machines and increase in demand of local equipment with customized needs. The tractor industry is already serving the construction and haulage industry by providing higher horsepower tractors and customized attachments as substitute to the expensive larger machines.

The academia has played a pivotal role in innovation and technology up-gradation in various countries like Japan, USA, Europe, India as opposed to Pakistan where this is a weak link. However, during the last few years a change is being observed, especially after return of foreign qualified faculty in the leading universities in Pakistan. Millat Tractors is collaborating with Engineering, Agriculture and Business schools of the leading universities to strengthen its own innovation process and to keep them abreast with the industry demands. The establishment of the first of its kind green engine testing laboratory at Millat with technical support from NUST Islamabad and starting of a project in collaboration with University of Agriculture Faisalabad and USAID for the introduction of Computer Aided Supervision System (GPS & monitoring systems) in tractors and farm machines exemplifies the strengthening bond of industry and academia.

Moreover, public sector organizations and research institutions can also significantly contribute in the innovation process by venturing with the local industry for development of market based products. It has been noticed that either our research institutions work is not in line with market needs and competition or they lack in resources for research.

The Industry associations can also play a major role in creating an innovation based culture by pursuing the Government for the enactment of conducive policies regarding R & D, enforcement of patent laws, allocation of resources and incentives to the Industry. As far as the tractor industry association is concerned, no substantial effort has been made for development of innovation process and technology up-gradation.

Till date the main driver for such initiatives are the private sector companies. However, we are quite optimistic that this culture of industrial innovation will take firm root within the country in the near future.


Syed Muhammad Irfan Aqueel, a professional chemical engineer started his career with ICI Pakistan Ltd as a management trainee in 1981. He then worked his way up the corporate ladder gaining operations exposure to ICI’s various businesses in Pakistan including Soda Ash, Polyester Fibers, Specialty Chemicals, Agrochemicals & Seeds, Paints as well as design, erection and commissioning of medium to large BMR Projects. In 1995 he was seconded to the Project Team working in the UK, which set up Pakistan’s only PTA (pure terepthalic acid) plant in Karachi. During his more than 23 years stay in ICI he attended various advanced management development programs at business schools like INSEAD, France & Ashridge Management College, UK, as well as in-house training at ICI’s facilities in UK, Europe and across South East Asia. He took early retirement from ICI in 2004 while serving as Works Manager Soda Ash Business.

In February 2005 he joined Millat Equipment Ltd. (MEL) as Chief Executive Officer. Taking over at the project stage he not only attained commercial production in record time but also achieved profitability in the 1st year of operations. The company has doubled its sales and profits every year by continuously meeting the OEM requirements of gears and shafts.He played a pivotal role in establishing MEL as a brand name for quality gears and transmission components in Pakistan and abroad. He introduced MEL as a quality gear manufacturer in India, Turkey, Poland and UK.

He was appointed as the Chief Executive Officer of Millat Tractors Limited on 1st January 2012.

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posted by S A J Shirazi @ 3/24/2016 01:12:00 PM,

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