Deere: Sales Could Increase 10 Percent a Year in Africa

Deere leaders say they anticipate growing demand for the company’s farm machinery in key African markets, including Ethiopia and Zimbabwe. A Reuters report from mid-November says a company executive projects sales growth of 8-10 percent annually in that region of the world.

“A global policy shift away from food aid toward local production—championed at the start of the decade by the World Food Program among others—has sparked a green revolution, increasing Africa’s potential as a market,” said Jacques Taylor, managing director of John Deere Ltd Sub-Saharan Africa.

Statistics from World Bank estimate that farming accounts for about 60 percent of total employment in Africa. In Ethiopia, Malawi, Mozambique, Tanzania, Uganda and Zambia, food production is projected to add more jobs than the rest of the economy combined through 2025.

“We started to see a commercial market developing for agricultural commodities … That gave an incentive for farmers to produce more,” Taylor said. He also said about 80 percent of Deere’s equipment shipments to Africa go to 10 markets, including South Africa, Zambia, Kenya and Ghana.

AGCO has been active in establishing a foothold on the continent as well. In 2011, AGCO told Reuters that African sales for the U.S. farm equipment manufacturer are expected to top $1 billion by 2020.

In a 2014 Bloomberg report, Nuradin Osman, AGCO’s director of operations for Africa and the Middle East, said the company’s unit sales in Africa had risen from 1,400 in 2011 to 6,500 in 2014 and were expected to increase to 8,500 units in 2015.

“Farming is a sector that can be expanded very easily” in Africa, CEO Martin Richenhagen said. “What they need is mechanization.”

Source: Ag Equipment Intelligence