According to the plans, the Czech firm will be committed to open a new division in Kurdistan Region before 2030, but the company will start an assembly sector in 2020 where local labour force are planned to assemble vehicle parts imported from the Czech Republic.
The negotiations have not been finalised but the ministry is hopeful that the parties will sign a contract in the coming months.
“There will be three phases; first the Zetor company will export 100 fully manufactured tractors to the Kurdistan Region which we plan to sell to Kurdish farmers at subsided prices,” said Anwar Omar at the ministry.
“In the second phase, probably before 2020, Zetor will start an assembly division here in Kurdistan where Kurdish technicians will assemble and also learn the manufacturing processes.”
“In the last phase, within 10 years, the Czech company will open a whole new division in Kurdistan where the tractors are manufactured and assembled using local labour skills,” Omar said. He was hopeful the company would sell a sufficient number of tractors to maintain its office in Kurdistan in the future.
The business is however not promising at the moment with sales down by almost 50 percent, according to tractor dealers who have spoken to Rudaw. The Kurdistan Region is still recovering from a paralysing financial crunch of the past two years.
“We sold around 15 vehicles in 2013 and before that. Now we are lucky if we sell 5 or 6,” said Rebin Faris who owns a tractor firm in Erbil.
“Farmers don’t want to take any risks and instead use their old tractors,” Faris added.
The economic crisis is only part of the reason behind the decline of tractor sales. Over the past three years, the central government in Baghdad has delayed parts of annual compensation to farmers in the Kurdistan Region, a debt that has grown to nearly $1 billion.
The prices of new tractors range between $14,000 and $40,000 depending on their quality.
According to the ministry, there are around 16,000 tractors currently working in the Kurdistan Region but most of them are extremely old fashioned and should be replaced by new vehicles to boost the production.
“Around 75 percent of these tractors are very old and were imported in the 1970s and 1980s. There are no spare parts to maintain them when they broke and their working life has really ended long time ago,” Hasan Hussein at the ministry told Rudaw.
Zetor Tractors is a brand of tractors based in Brno Líšeň in the Czech Republic. The company manufactures farming tractors and tractor components, engines, transmissions, etc. In the 70-year-long history, Zetor has sold over 1.3 million tractors, according to the company’s own data.
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