South Korea’s second biggest tractor maker — the LS Mtron division of LS Group — aims to ship $15 million worth of tractors to Iran this year with a view to expanding its presence in the Middle East and Africa.
The company has explored local manufacturing and assembly options with government officials in Iran, following a memorandum of understanding with the Iranian agriculture ministry and Arghavan Adineh, one of the country’s largest importers of agricultural equipment and LS tractor distributor since 2014.
LS Mtron says its 40-95 horsepower tractor shipments to Iran grew in value from $2 million in 2014 to $7 million in 2015.
It’s estimated that Iran Tractor Mfg. Co. (ITMCO) holds 80% of the 20,000 unit tractor market with 50-150 horsepower models based on Massey Ferguson designs up to 30 years old powered by Perkins-license Motorsazan diesel engines.
Western manufacturers make little headway in what is the largest tractor market in the Middle Eastern and African regions.
Lee Gwang-won, LS Mtron CEO, notes that with 60% of potential arable land undeveloped, the outlook for the Iranian agricultural equipment market is bright with high growth potential. He adds that a stronger presence in Iran would have strategic value to LS Mtron as a steppingstone into other Middle Eastern and African markets.