Millat Tractors

HISTORY OF MILLAT TRACTORS

Millat tractors Limited (MTL) was established in 1964, to introduce and market Massey
Ferguson (MF) Tractors in Pakistan. An assembly plant was set up in 1967 to assemble
tractors imported in semi- knocked down (SKD) condition.
In 1972, the company was nationalized under Economic Reforms Orders and renamed as
Millat Tractors Limited MTL started assembling and marketing tractors on behalf of
Pakistan Tractor Corporation( PTC) which was formed by the Government for import of
tractors in CKD condition. In 1980 and entrusted this task to PTC.
In 1981, PTC transferred this role indigenization to MTL. This was the turning point in the
companys history and it went about the task methodically and rapidly. The companys
history and it went about the task methodically and rapidly. The company undertook this
new role with enthusiasm and in the spirit of national development and proved its
engineering capabilities by surpassing the deletion targets set by the Government.
In 1982, MTL took a giant step towards self-reliance by setting u the first engine assembly
plant in Pakistan. The company made strategic decision right in the beginning to bring
those manufacturing facilities in house for which capabilities did no exist in the country and
for parts which required high investment and precision. Therefore, in 1984, sophisticated
manufacturing facilities for the machining of intricate components were set up. These were
previously not available in Pakistan. Currently, critical components like engine block,
hydraulic lift cover, front axle support and center housing are being machined successfully
in house at MTL from local sourced castings.
At MTL we firmly believe that producing of international quality standards is the key to our
continued success and growth and the quality control department converts this belief into
reality.
In 1992,the company was privatized, and the employees joined hands and took over its
management by winning an open bid.
To maintain its leadership role in tractor manufacturing in the country, MTL continues to
look towards future, to identify and exploit new opportunities and t consolidate the existing
ones. The new tractor Assembly Plant is part of this philosophy. This plant started its
production in 1992. The establishment of this modern plant not only increased production

capacity to 16000 tractors per year on a single shift basic, but also provided a quantum
jump to the quality of the assembled tractors and pushed MTL into ranks of the major
tractor manufacturing companies of the world.
In 1993, MTL acquired the management control of Bolan Castings Limited (a public limited
company specializing in intricate automotive casting), in partnership with employees of the
company.
The Company looks to the future with optimism and plans to broaden its customer base.
Consequently the opportunities are being explored in multiplication of engines and tractors
in areas other than the farming sector. Mass production of generation sets was started in
1994, while a 3 ton forklift Truck branded as Millat, based on TCM technology, was
launched in the year 2002. Both of these products are mad by using Perkins engines and
have been well accepted by the market.
In 2002, MTL established a wholly owned company named Millat Industrial Products (Pvt)
Limited to manufacture quality automotive batteries.
There is a constant endeavor at all levels of the organization to better the companys
performance by offering upgraded ranger of its products and services. Our technological
collaboration with AGCO Limited UK, Perkins Engines Limited UK, and M/s Anhui Heli Co.
Ltd. China, has been of great help in updating technology levels and introducing new
models.
The company has been the regular recipient of the Corporate Excellence Award of
Management Association of Pakistan and the top Companies Award o Karachi Stock
Exchange since early eighties. MTLs Annual report has been acknowledged as the Best
Annual Report by the institute of Chartered Secretaries and Admin Association of Pakistan
for several years.
The employees of the company, continue to work with full zeal and motivation to
further improve performance standards. We are confident that the company will keep
marching forward in service of the nation and the valued customers.

INTRODUCTION OF MILLAT TRACTORS LIMITED

Millat Tractors Limited (MTL), an over Pak. Rs. 5.5 billion company, is ISO 9002
certified for its operations has been a regular recipient of Top Company and
Management Excellence awards. The leading engineering concern in the

automobile sector. MTL manufactures a range of Massey Ferguson (MF) tractors

under technical collaboration with AGCO of USA (Massey Ferguson Ltd. U.K.)
and diesel engines with the caterpillar USA(Perkins engines, U.K.), Diesel
generating sets only. Recently, an agreement for technical collaboration has also
been signed with. Anhui Heli of peoples republic of china for manufacturing of
forklift trucks.
The company founded in 1964, the company was acquired by its employees
in 1992 with 51% share holding. subsequently, the company also acquired Bolan
casting Limited, one of the largest foundries in the country. Over the years, the
company is maintaining a wide field network spread all over the country. Its tractor
dealers are 69,46 spare parts dealers and 312 lone shops.
So the company has spread its products throughout the length and breath of
the country.
Today the population of MF tractor made by MTL exceeds 250000 while the
total member of tractors in the company is approximately 500,000. Every second
tractor in Pakistan is a MF tractor.
This achievement has been made possible only through the companys
commitment to quality, after sale service and its human remorse
development.
MANAGEMENT HIERARCHY AT MTL

Organization Hierarchy

At MTL, there is centralized decision making process. Documentation procedure is

formal e.g. in case of providing after sale service (warranty / replacement) for
defective parts the procedure is as follows:
Customer goes to dealer and tells the problem.
Dealers replace the parts from his inventory and afterwards fills the claims
form and takes the collective defective parts to the Millat Tractors Limited.

 MTL inspects the part and then either replaces part to the dealer or credits the
balance to dealers accounts.
For the extra ordinary problem or defect the claim procedure is different and as
follows:
Customers go to dealer and tells the problem.
Dealer sends a notice to the Millat Tractors Limited and then a team from
MTL visits the tractor and then decides whether to improve the claim or not.
If the claim is accepted then the part is sent to the dealer for replenishment.
DEPARTMENT AT MTL

In order to have maximum efficiency, Millat Tractors Limited functions are very
structured. The division of work and labor is done in a very designed manner and
all the work requirements have been distributed properly among the various
departments.
Every department fulfill its own requirements and done its own work. There are
following department on Millat Tractor Limited.
Human resource development and training department (HRD)
Marketing department
Administration department
Finance department
Auditing department
EDP (electric data processing) department
A hierarchy exists in each department and the functions of the department flow in
that particular cadre, whether they are flowing from top to bottom or from bottom
to top. Some departments have further sub-departments as well, like marketing is
the biggest department of MTL, so it has 7-sub departments. Similarly, sub
departments exist in administration department.
MANAGING EMPLOYEES AT MTL

Total number of employees are 1000, among them 185 are executives, workers are
815, engineers are 74, qualified accountants are 8 and MBAs are 16.
Once it hires employees, it does not fire them because of hiring cost and image will
hurt. MTL hires employees on basis of following factors.
Nature of job
What skills required to satisfy the job requirements.
What market is paying to them.
In order to motivate the employees they offer reward system just like production
bonus scheme and profit sharing planes.
There is also promotion system at MTL. Employees are promoted on the basis of
job duration. They are not promoted before 5 years. But if employees show
extraordinary performance then 1st their performance is classified into 3-categoreis
such as A category, B category and C category then special increment is there in
their salaries.
MTL follows knowledge base approach. According to it, it trains and educates the
employees via different training programmes. So, MTL initiates different in-house
and outside the house training programmes. In house training programmes include,
employees do the different job (especially marketing personnel) related courses
from Lums and IBA.MTL also sends employees abroad, human resource
department also conduct seminars regarding production department. Through these
seminars labor force is trained to reduce the rejection rate and to successful
implement the TQM system. At MTL annual functions and parties are arranged and
employees are given annual and weakly leaves (2- leaves in a weak) in order to
reduce their boredom and frustration level. free lunch is provided to them., Free of
cost medical facility is also given to them.
PRODUCTION PLANT

There is only one production plant located in Lahore. Its working capacity70-120
tractors per day.
PRODUCT LINES

 MF 240 (50 hp) Tractor

MF 260 Turbo (60 hp) Tractor
MF 375E (75 hp) Tractor
MF 385 (85 hp) Tractor
MF 385 4WD (85 hp) Tractor
Generating Sets (15-42 KVA)
Prime Movers
Forklift Trucks (3-Ton Capacity)
A range of agriculture implements.
STRATEGIC BUSINESS UNIT
Among the above mention product generating sets forklifters and prime
movers are generating high profits. These products have less market share
but have the more opportunity for market growth. So on the basis of these
qualities we can categories as the problem child.
Local manufacture of agricultural implements erodes its profitability in
agricultural implement. These products have the low growth market and low
market share so we consider these products as dogs.
Tractors are consider to be as the stars on the basis of high market share and
high market growth.

HIERARCHY OF STRATEGIC INTENT

Vision
Millat to be global group of companies, recognized for a range of
quality products with innovative design capabilities.
Mission Statement

To be market leader in agricultural tractors and machinery building companys image

through innovation and compositeness, grow by investing into group of companies,
ensuring satisfaction to customers and stakeholders and to fulfill social obligation.
Proposed
Vision : vision of Millat Tractors should be:
1. To improve and maintain the leadership position
2. Millat Tractors Limited is dedicated to provide quality innovative products with the
best package of guaranty and warranty for its customers when ever they are
3. To make Millat Tractors as leaders all the way
4. we can here to better serve our customers with the best quality and diversified range
of products providing best after sale service as well.
Proposed Mission Statement
Mission Statement of Millat tractor should be:
To retain and improve Millat Tractor good will, profit ability and market leadership by
manufacturing the quality Tractors and machinery and making human capital more
committed, productive and efficient.

GOALS AND OBJECTIVES

Goals
Establish dealers network all over Pakistan to ensure the availability of
their products.
To completely satisfy the customers
Manufactures farm equipment and other engineering goods that conform to
the specified standards to enhance farm mechanization for achieving selfsufficiency in against agricultural products, saving of foreign exchange and
developing technical and engineering capabilities in the country.

 Ensure customer satisfaction by providing quality products at competitive

prices with the warranty coverage and ensuring after sale service.
Constantly endeavor to be market leader in terms of market share and
technology pace-setters in area of operations and to continuously improve
efficiency and competitive strength.
OBJECTIVES

By continuously improving performance, aim to generate earnings

sufficient to ensure a secure future for the company and to produce and
increase shareholders return.
To enhance creativity and job satisfaction, provide employees
opportunity for personal development.
A company went to exercise a 50%-55% sale in coming fiscal year.
But according to Millat tractors these objective vary from year to year.
TARGET SETTING AT MILLAT TRACTOR

Millat tractor limited held monthly and annual based meetings to set the targets.
There are different types of targets just like, production related, import related,
supply related, quality maintenance, delivery, finance, manpower related targets.
proper budget is allocated to achieve these target. There are some factors which
considered at the time of setting targets.
What is the current sale level and what it was in past?
What is companys current profit level and what it was in past?
What is the companys current growth and what it was?
Business success and failure.
How many complaints company receive and among these how much it
accept.
Also consider how much time and cost it will take?

There are two-way communication in order to set the targets. In this

communication session two parties are involve. Top management and middle
management . These targets are split in different targets and spread them to make
these targets operationalize. Again monthly meetings are held in order to check the
performance of the employees towards the achievement of these targets. There is
incentive scheme to motivate the employees to achieve these targets. There are
production bonuses and cash rewards.
CASH REWARD / PROFIT SHEARING PLANE

22% of the companys profits are shared among the employees.

PRODUCTION BOUNCES

Production standards are set, i.e. 28000 tractors / annum. On meeting and
exceeding these targets they are given production bonuses. In order to meet
the sales targets, MTL also give the incentives to dealers but considering
these tractors that factors are
That past performance(Low, medium and high performers).
Financial cost of incentives scheme
What was the result/output of the last incentive scheme.
After that MTL do the cost benefit analysis. If the targets are not achieved then
they held the brain storming session. In this session front line field officer (regional
officers) give the monthly reports, share the problems with the market executives.
INTERNAL PROBLEMS ANALYZED AT MILLAT TRACTORS LIMITED

Millat Tractors Limited is not facing any problem regarding finance but following
problems are identified at Millat Tractors Limited
Product development
Demand Management
o Weak in aggressive marketing.
o Unsatisfied delivery procedure.

o Lack of proper survey (Market research).

Delay in tractor delivery.
No team work.
Totally centralized decision making.
Time consuming producedure .
No customer dealing department in real meaning.
PRODUCT DEVELOPMENT (OPERATIONAL LEVEL PROBLEM)
On the basis of 58% - 60% market share, Millat Tractors Limited consider
itself as a market leader but in order to retain and improve its market share
by prevailing in overall Pakistan. Tractors market instead of its current
market (upper Punjab and upper Sindh) through changing phrase
We better know what customer requires. As
What actually customer wants.
Its true that Millat Tractors Limited is producing new products (generating sets,
fork lift trucks and prime movers) and modifying its available products
(Tractors)but t should modify tractors by introducing those features which
customer requires and create a sustainable competitive advantage.
Now the question arise, why people in lower Punjab prefer 480 model (Fiat
Tractors) rather than models introduce by Millat Tractors?
The answer of this question is that the farmers of these areas mostly use rotawheater which do not work well with the 240hP Model of MTL. it efficiently work
with the 480 hP of Al-Ghazi Tractors. So in order to capture this market MTL
should introduce those models of tractor which efficiently work with the rotawheater.
DEMAND MANAGEMENT
Weak In Aggressive Marketing

Marketing personnel have a view in their minds that when any customer comes
to the market to buy tractors knowing already what they have to buy either Fiat

or MF, so there is no need of marketing. They do not realize that changing

the minds of the customers is essential in order to survive in a market. Due
to poor marketing, lack of interaction with the customers and incompetent
marketing personnel, Millat Tractors Limited could not penetrate
in Bahawalpur and other markets of lower Punjab as well. Millat tractor
limited is enjoying as a market leader but it should be noted that FIAT has
been gaining a lot of market share for some years. So there should be
change in the marketing strategies and efforts should be invested
in marketing.
UNSATISFIED DELIVERY PROCEDURE
Millat tractors limited is more relationship oriented than customer
oriented. It shows the biasness and discriminatory behavior with their
customers. Company is following the policy to deliver the product to those
customers who are higher in status e.g. if customer has placed and order
month ago and when MPA places an order now then MPAs order is given
priority and the tractor is soled to him ignoring the customer who is already
waiting for delivery. This should be noticed by top management and
amendments should be make in policy.
LACK OF PROPER SURVEY
There is no proper procedure being followed by MTL to find out following
types of problems:
What type of problems organization is facing?
What problems are being faced by clients.
Whether clients needs are changing or not?
What are the reasons, Millat tractors is not capturing the market
share in lower Punjab, lower Sindh and other areas. Even they are
providing a better package of after sales service?
What MTL competitors are doing?
So market research is a better solution for all these problems.

DELAY TRACTOR DELIVERY

Proper Delivery
There is another problem regarding long delivery period and availability of
tractors to be sold to the clients. Clients always face difficulty in getting the
tractors on time.
No Team Work
At Millat Tractors Limited people do not work in a team. Every one is
working for their on self interest. The top management should create an
atmosphere in order to change the attitude of the employees so that better
result can be obtained.
Centralized Decision Making
Basically all the decisions are made by higher authority regarding all the
procedures in the office e.g. purchase, sales, production etc. all the
decisions regarding employees are taken by the top management and they
are not allowed to participate in any decision. Most of the time first line
employees know better than middle and top level management.
Time Consuming Procedure
Every procedure takes a lot of time to be completed if anything required in
office e.g. even smallest purchase have been made it takes a hell of time to
complete the purchasing process. Another example is that if the company
requires smallest equipment for office it takes a lot of time to get
anapproval from head office e.g. if a printer is required in office.
NO CUSTOMER DEALING DEPARTMENT IN REAL MEANING
There is no customer dealing department to deal with the customers face by
face. Every client or a new customer to comes to the office for obtaining the
information or for purchase of any MTL products has to meet the
marketing personnel. The marketing personnel only focus on the job they
are assigned.
PREMATURE LAUNCH OF 260 TURBO (60 HP) TRACTOR

Early and premature launch of 260 model has created the problem for Millat
Tractors Limited. This model is not well appreciated by the market. This problem
again indicate the flaws of marketing department and lack of marketing research.
Through the proper market research they could launch this model at appropriate
time so, Millat Tractor is thinking to launch this model with some modification.
CORPORATE LEVEL STRATEGY

If we go by the text, then corporate strategy answers the question that in what
business the company should be in
DIVERSIFICATION

Millat Tractors Limited involve in diversified business that have already been
listed.
FORMS OF DIVERSIFICATION

MTL using following three forms of diversification

1) Vertical diversification
2) Horizontal (related) diversification
3) Global diversification
VERTICAL DIVERSIFICATION

MTL is involve in backward integration by producing gear boxes and rex barren
batteries. It not only consumes these parts itself but also sell these to other
customers as well.
HORIZONTAL DIVERSIFICATION

MTL has expanded its business by horizontal diversification through producing

agriculture implements generating sets, fork lift trucks, prime movers and
automobiles (Army Jeeps) as well. Their intention is to invest in that business
when the risk is low in the sense of less competitive business and also acquire
those business which the Govt. has disinvested.
GLOBAL DIVERSIFICATION

At global level, Millat Tractors Limited exports its products in form of CkD
(Completely knock down) components which its foreign customer requiresso that
import
cost
can
be
reduced.
MTL
imports
its
products
to Malaysia,Bangladesh, Srilanka, Afghanistan, Keynia, (200 Tractors), Middle
East,Sudan, and Nigeria. But Al-Ghazi is not in this position to export their
products.
MEANS OF DIVERSIFICATION

There are two sources which are used by MTL to diversify its business.
Internal development
Acquisition
INTERNAL DEVELOPMENT

Through internal development, Millat Tractors Limited has started producing the
other products such as gear boxes, agricultural implements, generating sets, fork
lift trucks, prime movers and automobiles(army jeeps).
ACQUISITION

Rex Barren batteries

Millat tractors limited, the producer of Massey Ferguson brand of tractors have
acquired the assets of rex barren batteries limited for Rs. 13.55m, by making the
highest bid at the auctioneers.
The assets of rex barren, located in Kasur included land measuring 16 kanals 18
marlas with the covered area of 22,750 sq.ft and machinery / equipment capable of
producing 60,000 batteries of different sizes.
BOLAN CASTINGS

In 1993, the company in collaboration with the employees of Bolan Castings

Limited acquired the management control of Bolan Castings Limited by
purchasing 51% of the company shares offered by the Govt. as a part of process of
privatization. The management control of BCL was taken over after successfully
submitting the highest bid of Rs. 24.55 per share in open bidding. BCL provides
major castings for automobile industry and also 50% of the company requirement

are met from it. Since acquisition of control by MTL, BCL has also performed very
well and has been a growth pattern.
BUSINESS LEVEL STRATEGY

Business level strategies determine how the company should compete in each of its
business. These are specific to business.
Millat tractors limited consider itself as a market leader on the basis of its 58%60% market share and quality products. Millat tractors main competitor is AlGhazi tractors limited. There is intense competition among them.
DIFFERENTIATION

Being a market leader, MTL differentiate its products by offering a best after sales
service & warranty maintenance package. The warranty package is as follows.
Under 1- year warranty or 1200 H of running whichever comes first, parts
are replaced free of cost.
It renders free services and provides free filter on tractors with the 30h/
traveling.
Other facilities provided by MTL but not by its competitors are as follows
If the farmers have purchased tractors from Lahore it can be repaired from
any work shop which are present allover Pakistan
MTL dealers do not require identity card when customer came here to sell
the product.
For MTL initiates after sale service programmes such as free work shops,
free repair and maintenance programme and doorstep programmes.
MTL has training school for dealers, technical colleges and general people.
Here main source of promotion and marketing of their products is distinctive
package of after sale service.
RECOMMENDED STRATEGIES

Company should acquire other related business as well in order to offset the risk. It
should acquire those business where the competition in order to achieve the major
portion of profitability and which has the potential for sale and growth.
MTL should also acquire the Govt. or Private agencies for consultancy to remove
weaknesses and solve the problems.
Another way to reduce the problems and weakness is that it should do the strategic
alliance with Al-Ghazi Tractors.
OPERATIONAL LEVEL STRATEGIES
TOTAL QUALITY MANAGEMENT

Among the 2-dominant strategies for the operation management i.e. CPR and
TQM.
At MTL, TQM is used to improve and maintain the tractors quality. Here their
basic purpose is to minimize the errors rate and make it zero level. So this is the
only way to transfer best quality to the customer. There are quality control systems
and quality control circles. There is a proper procedure to maintain and improve
the quality from purchasing raw material to supply tractors to customers.
MTL believes on continuous improvement. Here the changes are revolutionary
rather than evolutionary. So on the basis of these, they are using single
looped learning model
COMPETITIVE ENVIRONMENT

Among the 5-forces of competitive environment, it gives more importance to rivalry

among existing firms. There is intense competition among MTL and Al-Ghazi Tractors
i.e. the thing which they want to avoid. On number 2nd, new entrant is also creating a
threat for them.
MTL mostly uses a blend of offensive and defensive tactics. it uses proactive approach
when it is going to launch a new model or after sale service. It uses a reactive Tactic
when Al-Ghazi Tractors Limited take initiator of price was then in this situation, it also
has to reduce little bit price and little bit consider the competitors pricing straregy.its
competitors (AGTL) prices are lower because of 2-reason. First is , it is located in tax
free zone and next it has been switched over fromItalic technology
to Turkish technology which has reduced per unit cost. But Alghazi has also make the
delivery procedure more prompt.

SWOT ANALYSIS
The swot analysis consist of analyzing the organizational strength and weaknesses, and its
opportunities and threats which are related to external environment. it helps to identify a
strategic niche that the organization might exploit. Here is a swot analysis of Millat Tractors
Limited.
STRENGTH

Millat tractors limited is strong organization as for as its competitor is concerned.

Basically the activities the firm does well or the resources it has or it controls are
referred to as its strength.
Following are the strengths of MTL.
GOOD WILL / WELL ESTABLISHED IMAGE

MTL has an excellent goodwill in the market and in stock exchange.

MARKET SHARE

A market share of 58%-60% proves to be a demanding strength of the Millat

Tractors Limited.
REPAIR FACILITY

MF tractors can be repair from any workshop located in any area ofPakistan. There
is no specification, regarding repair maintenance of tractors such as if the customer
has purchased tractor from Lahore, he can repair it from D.G. Khan or Mailsi
workshop as well.
DELIVERY THROUGH DEALERS AND DIRECT CASH BASIS

MTL has strength over their competitors . it delivers tractors through dealers and
direct cash basis delivery is also made. But Al-Ghazi tractor makes delivery just
through dealers.
LICENSES AND TECHNOLOGY

Licenses and technology from Massey Ferguson, UK gives Millat Tractors limited
an extra edge.
ISO 9002 CERTIFICATION

Another, solid strength of Millat Tractors Limited is ISO 9002 certification for its
engine assembly, tractor assembly and laboratory.
AFTER SALE SERVICES

A good package of after sales service by Millat Tractor is another strength on its
competitor and provide the customer satisfaction.
AVAILABILITY OF PARTS

Millat tractors parts are readily available all over Pakistan that is another strength.
NETWORK OF DEALERS AND WORKSHOPS

There are 69 tractor dealers, 46 spare parts dealers and 312 workshops all
over Pakistan.
DIVERSIFICATION

Millat tractors limited has diversified its business by producing agricultural

implements, generating sets, fork lifters, rex barren batteries and now working on
the automobiles business as well.
EXPERIENCE

Another strength of MTL is that it has been established since 1964 so it has
experience labor force.
PRICE EARNING RATIO

MTL enjoys a higher percentage in stock exchange due to higher price earning
ratio.
WEAKNESSES

Weakness are the activities the firm does not do well or the resources it does not
fully utilized or the resources it needs but does not have. Though Millat Tractors
Limited in a successful organization but it has following weaknesses.
JOB STATICNESS

There is lack of job rotation in MTL which has created the staticness and reduce
the productivity and efficiency of the employees.

INDISPENSABILITY

High market share another strength has mad Millat Tractors to think that they are
leaders so they do not put its efforts to those areas which are weak and need its
attention.
LONG DELIVERY PERIOD

As compare to its competitors delivery time period of tractors delivery is long.

DIVERSION OF CONCENTRATION

Due to diversified work at MTL, it might not able to fully concentrate on its
primary operations.
NON SPECIALIZED PEOPLE AT FRONT DESKS

The marketing department has good workers but they are not good at public
dealing and less interaction with the customers.
LONG PROCEDURES OF DECISION MAKING

There are long decision making procedure. Not quick decision are taken so these
long procedures are time consuming.
OPPORTUNITIES

Opportunities are positive external environmental factors. They have following

opportunities for Millat Tractors Limited.
Expansion In Automobiles, Implements, Fork Lifts Trucks And Generating Sets,
REX barren batteries & Bolan casting.
Due to changing needs of country, MTL has the opportunity to make power
machine along with manufacturing tractors and diversifying its business.
CROP HIGH YIELDS AND RATES

If the crop yield is high and the farmers are going to get good price for it so this
wills increase the demand of the tractors.
E-COMMERCE

MTL can established B2B e-commerce application with its dealers, spare parts and
workshops. This will help them to make true MANAGEMENT INFORMATION
SYSTEM
THREATS

Threats are negative external environmental factors. The external factors, which
can be prove negative for Millat Tractors are as following:
POLITICAL INSTABILITY

The major threats which is faced by MTL is the instable political environment. A
policy being carried out by one government is changed by next coming up
government. Such as Awami Tractor Scheme and Green Tractors Loaning
Scheme. Every government shows biasness and make policies by considering
their favorites.
STRONG LOCAL COMPETITION

MTL has face a very strong competition not only in tractors but in agriculture
implements as well. In tractors the major competitor is Al-Gahzi Tractors Limited
and in agricultural implements all the local manufacturers are its competitors
.AGTL has achieved a major portion of the market share so rapidly by reducing per
unit cost of tractor by switching from Italy (FIAT) technology to Turkish
technology (TUMOSAN) and by managing its delivery period.
Pest Analysis
POLITICAL
In 1979, Zia government imply the ordinance for the automobile industry.
According to this ordinance the formers are indicated to produced all the imported
items at local level. MTL acted upon this ordinance in 1981. Uptill now all the
government policies are in favour of farmers. Banazeer Government had
introduced Awami Tractor scheme and Nawaz Shareef Government had introduced
Green Tractor Scheme. According to this schemes prices of the tractors declined.
MTL also gave the sacrifice by reducing the profit margins and on the other hand
government reduced the taxes but this reduction was not so much supportive.

[Safety and Environmental Protection]

The Company has a separate Horticulture Department to make the
environment pleasant, green and full of flowers. The Company has been
participating since many years in the Horticultural and flower competitions
arranged by Government and other institutions. The Company again won best
performance awards in different competitions. To promote healthy
environment within the Company and its surroundings, a major Tree
Plantation Campaign was undertaken and over 2500 trees were planted.
However, the Company remains fully committed towards the requirements for
safety and environmental protection. All the operations are continuously monitored
to meet the requisite standards in these areas. The Company's operations continued
under safe operating conditions and the past excellent record in this respect was
maintained during the year. The safety committee closely monitors all activities to
create awareness and education for the adoption of best safety practices.

Social Responsibility and Community work

Compliance with the spirit of laws, timely payment of all govt. Taxes and dues.
Obligations, the Company continued to promote various welfare schemes,
organizations and charitable institutions. The Company provides financial
assistance for promoting education, health and social activities to schools,
Hospitals and charitable trusts as and where requested by them. The Company has
been sponsoring Golf Tournaments at the national level and musical activities etc.
Technology

The Company produced 14,652 tractors as against 15,370 units of last year
reflecting a decrease of 5 %. The production was in line with the requirements of
the Marketing Department.
As part of the Company's policy of providing appropriate products to meet
customers' requirements, two new models i.e. MF-260 Turbo (60 HP) and low cost
option of higher HP MF-375E (75 HP) have been introduced in addition to the
existing models MF-240 (50 HP), MF-385 (85 HP) and MF-385 4 Wheels Drive.
We are now well placed in the market by offering a wide range of products meeting
all pocket needs. This also places us in a comfortable position to meet future WTO
conditionalties. We are confident that our current products quality will place us in a
good position to compete globally. Encouraged by this acceptability we plan to
continue with the concept of offering products suited to the market needs to further
enhance our existing tractor range.
Future Outlook
Pakistan' agricultural sector will remain stagnant unless we optimize our farm
power level through extensive use of agriculture, machinery and tractors. The
Company feels that the tractor market would remain at the same level in 20022003 as in the current year. MTL will strive to maintain its market share and play a
positive role aimed at boosting the agricultural sector.
The Company expects that the tractor industry will grow further due to
restructuring of ADBP recently being taking place, formation of politic
Government in October, 2002 and Afghan potential i.e. participation of Pakistan in
the rehabilitation of Afghanistan.
Habib Bank Ltd. and The Bank of Punjab are already extending tractor loans and
improving their share in the tractor industry which shall reduce dependence on ADBP
Suggestions
We gave following suggestions for Millat Tractor Ltd. By acting upon these MTlL will
not only profitable itself but also play an important role in the development of the
economy.
1. Marketing is called s back bone of an organization. a poor marketing of a good product
can disaster results while good marketing of bad product can make me rich other

rights. There is a lot of room of improvement present in the marketing development

regarding marketing research to identify where the problem (what is the reason of
sales decline) & which section of an organization is weak dealing with the customer
in this regard special improvement in booking section is required. The best way at
booking section. The problem is due to the job of persons at booking section. To show
the problem course covering the topic how to deal with the different people should be
organized.
2. They should change their thinking that they will always remain leader of tractor
industry but they should understand that every business has to face the decline stage
as well in order to remain at maturity, it is necessary they should capture those
markets in which they still did not penetrate & The competitor analysis thoroughly.
3. Another area which demand attention is that of job rotation. Employees are not so
much productive, motivated and efficient because of their routine job.
4. They also are allowed the operational level employee in decision making process
especially when the decision are taken about the labour force because most of the time
they better know about what is beneficial and suits to them.
5. The delivery time period at MTL is 21-days arrangement should be made to decrease
the delivery time so that service level can be improved.

Rabiyya Fisso: 003903311680835