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AGRICULTURE

Focus on sales volume, revenue in SA Agri Equipment Mkt Outlook to ’25
Friday, 01 March, 2019, 13 : 00 PM [IST]
Extensive focus has been placed in quantifying the sales volume and revenue over the period, 2012-2025 in Ken Research’s recent report, titled South Africa Agricultural Equipment Market Outlook to 2025-By Product Type (Tractors, Tillage Equipment, Planters and Seeders, Sprayers, Combine Harvesters, Precision Farming and Others); By Domestic Sales and Import; By Region (Free State, Mpumalanga, Kwa Zulu Natal and others).

It providesa comprehensive analysis of the country’s Tractors, Tillage Equipment, Planters and Seeders, Sprayers, Combine Harvesters, Precision Farming Equipment Market, including market evolution, overview, genesis, market size and market segmentation.

The report covers aspects such as market segmentation (by product type, by domestic sales and imports and by region) and various snapshot including major product features, agriculture equipment rentals space, second hand sales market, equipment financing, aftermarket services and others.

The competitive landscape of major players including Falcon Equipment, Bell Equipment, Radium Engineering, John Deere, Massey Ferguson, Landini, Case IH, CLAAS, ARGO (PTY) Limited, BHBW (PTY) Limited and Northmec have been extensively covered mentioning company overview, major business strategies, USP, distribution network, after-sales services, financials and various other parameters.

The report also covers future industry analysis (by sales volume and revenue), future market segmentation, SWOT analysis, growth opportunities, upcoming trends, government regulations and analyst recommendations.

It is useful for existing agricultural equipment companies, potential entrants, investors and other stakeholders to align their market-centric strategies according to ongoing and expected trends in the future.

Market overview
South Africa has a dual-agricultural economy, with both well-developed commercial farming being carried out by commercial farmers and cooperatives in large estates, along with subsistence-based agriculture production being done by peripheral farmers in smaller rural areas.

The market is currently in its recovery stage after witnessing major decline in 2016 owing to drought. Domestic demand is principally being met through imports which are sourced primarily from India and China.

The major stakeholders in the market have been international OEMs (original equipment manufacturers), domestic distributors and importers and domestic OEMs.

Prominent business strategies adopted by major players include forming extensive dealer network, farmer-magazine advertisement; new product launches product innovation and improved after-sales services.

The market registered a CAGR of close to three per cent in terms of sales volume of machinery between 2012 and 2018.The growth factors in the market include increasing government support in terms of subsidies, declining input costs and increased technological developments.

Market size
The South Africanagricultural equipment market recorded a CAGR (compound annual growth rate) of close to six per cent in terms of revenue between 2012 and 2018.

The market was fuelled by increasing government subsidies for farm mechanisation, accommodative financing, growth in the agricultural industry and increased awareness towards farm machine mechanisation in the space.

The market, however, showcased a slow pace growth owing to low purchasing power and high cost, consistent adverse climatic shocks and dependence on import of agricultural machinery.

Market segmentation
By product type
Tillage equipment captured highest sales share in terms volume of agricultural machinery sold followed by planters and seeders. Tractors held the third highest share followed by sprayers, precision farming equipment, combine harvesters and others (balers, rakes and more) respectively.

Tillage equipment are low-cost machinery complementing tractors and are thus exposed to higher wear and tear, resulting in higher recurring demand,and hence, high sales volume in 2018.

By domestic sales and import
The market is clearly driven by imports from countries such as India and China extending cheap labour and manufacturing cost. Hence, all major international OEMs have their international distributors selling their products by importing SKUs (stock-keeping units) to South Africa.

By region
Free State has the highest market share in terms of sales volume, followed by Mpumalanga and Kwa Zulu Natal. This was followed by Western Cape, Northern Cape and others (Gauteng, Eastern Cape, Limpopo and North West).

Free State has accounted for a huge number of large equipment sales since it provides the apt conditions for agriculture, and thus, accounts for maximum crop production.

Mpumalanga is adept with intensive farming, and thus, has higher mechanisation rate whereas Kwa Zulu Natal experiences ample rainfall and agriculture produce, thus resulting in high sales volume of machinery.

Competition stage and positioning
The overall competition stage of the market has been concentrated wherein the landscape is extensively dominated by 3-4 international manufacturers in 2018 in tractors’ and harvesters’ market, respectively.

There are three major domestic manufacturers, namely Bell Equipment, Falcon Equipment and Radium Engineering in 2018.International manufacturers include five major names, including John Deere, Landini, Case IH, CLAAS and Massey Ferguson.

The international manufacturers conduct operations in South Africa, through a distribution and dealership network that consists of three major players, namely BHBW, Northmec and ARGO Industrial (Pty) Limited.

Future analysis and projections
The South Africa agricultural equipment market is likely to experience an upward trend in terms of sales volume as well as revenue owing to rising agriculture produce, increasing prices of agricultural equipment, accelerating concept of multi-functional machinery, increased financing options and increase in penetration of driverless tractors in South Africa.

With the government support policies such as New Growth Path and National Climate Change, the sector is expected to help the agricultural sector showcase growth and hence the demand for agricultural equipment. In terms of sales volume, the market is expected to showcase a CAGR of close to two per cent between 2018 and 2025.

Key segments covered
?    Market Segmentation by Product Type including Tractors, Tillage Equipment, Planters and Seeders, Sprayers, Combine Harvesters, Precision Farming and Others
?    Market Segmentation by Sales Volume: Domestic Sales and Import
?    Market Segmentation by Region, including Free State, Mpumulanga, Northern Cape, Western Cape, Kwa Zulu Natal and Others

Key target audience
The target audience comprises existing agricultural equipment companies; new market entrants (domestic OEMs); new market entrants (foreign OEMs); agricultural equipment financing companies; government bodies; investors and venture capital firms; agricultural equipment manufacturers, agricultural equipment distributors and agricultural equipment associations.

Time period captured in the report
Between 2012 and 2018: Historical period
Between 2019 and 2025: Future forecast

Companies covered
The companies covered in the report included Bell Equipment, Falcon Equipment, Radium Engineering, GC Tillage, AGRICO, Agri Supplies, AGRICON, Bestbier, Big Dutchman, BPI Manufacturing, Cape Agricultural Products, Enorossi, Gomselmash, Green Zone, Hose Manufacturer’s (PTY) Limited, Monosem, Jinma Tractors South Africa, John Deere, New Holland, Landini, Massey Ferguson, Case IH, CLAAS, Valtra, Mahindra & Mahindra Limited, Valmont Industries Incorporated, World Group Company Limited, JCB Limited, Kuhn Group, Netafim Limited, Yanmar Company Limited, Agco Corporation, Agro Master, CNH Industrial and Morris Industries Limited, BHBW, Northmec, ARGO Industrial, DICLA, NHSA Agriculture Parts, Orchard Agrimek, Rebelo Agricultural Group, Southtrade, Vermeer Equipment Sales, Mascor, BEPCO, DICKEY-John Corporation and Jupidex, New Holland, John Deere, Massey Ferguson, Case IH and CLAAS.

Key topics covered in the report
The report covered such topics as South Africa Agriculture Equipment Market Value Chain; Ecosystem; Market Overview; Market Size by Sales Volume and Revenue, 2013–2018; Market Trends and Challenges; Market Segmentation by Product Type (Sales Volume); Tractor Segmentation by Horse Power (Sales Volume); Tractor Segmentation by Type of Tractor (Sales Volume); Tillage Equipment Segmentation by Type of Equipment (Sales Volume); South Africa Agriculture Equipment Market Segmentation by Domestic Sales and Imports (Sales Volume); South Africa Agriculture Equipment Market Segmentation by Region (Sales Volume); Government Regulations in South Africa Agriculture Equipment Market; Trade Scenario in South Africa Agriculture Equipment Market; Strengths of Major Players in South Africa Agriculture Equipment Market; Company Profile of Major Players in South Africa Agriculture Equipment Market; Snapshot on Second Hand Market, Rentals, Equipment Financing, After Market Services and Products in South Africa Agriculture Equipment Market; Future Outlook and Projections in South Africa Agriculture Equipment Market (2019-2025); Growth Opportunities; Future Market Segmentation of South Africa Agriculture Equipment Market; SWOT Analysis, and Analyst Recommendations.
 
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