What is the Current Potential of South Africa Agriculture Equipment Market?
South Africa Agricultural Equipment Market has played an imperative role in the overall GDP with ~% contribution in terms of value generated in 2018. The market is currently in its recovery stage after witnessing major decline in 2016 owing to drought. During the last 5 years, the agricultural equipment market has been sluggish owing to the political instability, government policy reforms and unexpected seasonal mishaps. The sales volume of machinery increased from ~ units in 2012 to ~ units in 2018. The CAGR recorded for the review period was ~%. The sales value of the agricultural machinery during the year 2012 was USD ~ million and increased to USD ~ million recording a CAGR of ~%. The rate of mechanization & adaptation has increased in 2018.
South Africa has a dual-agricultural economy, with both well-developed commercial farming being carried out by commercial farmers & cooperatives in large estates along with subsistence-based agriculture production being done by peripheral farmers in smaller rural areas. 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, domestic distributors & 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.
How Did South Africa Agriculture Market Evolve in the Past 70 years?
Penetration of Mechanization and Agriculture Support Policy: The mechanization of agriculture in South Africa was in its emerging stage during the 1950s and 1960s as the country continued to be a large food importer during that period. South Africa’s transformation into a contemporary and highly viable agriculture nation is largely due to the dawn of democracy and end of apartheid in 1994. During the 1950s and 1960s, the government invested heavily in research and development, infrastructure, extension services, direct subsidies for conservation works and debt relief, and the settlement of white commercial farmers all of which led to the sector expansion.
Progression from Manual and Animal Farming to Precision Farming: Before the 1960s, farms in South Africa relied profoundly on manpower and animal power for their farming needs. Tools such as sickles, plows, drag harrows, flails for the reaping, threshing and planting of crops were used for farming. The 1970s were a period of rapid growth in the South African economy as a whole, supported by high gold prices and high agricultural growth. After the recession in 1976, the country set in motion a process of liberalization of trade and deregulation of agriculture that was only partially completed by the early 1990s. Farmers in South Africa have increasingly mechanized their farming procedures and agricultural equipment is currently used is all sectors of agricultural production since the 1960s. In the last 10 years, there has been an escalating use of precision technology.
What is the General Overview of the Agriculture Sector in the country?
South Africa has a dual agricultural economy, with both well-developed commercial farming and more subsistence-based production in the deep rural areas. South Africa covers ~ million square kilometers. Drought is a severe problem in the country and due to aridity, around ~% of the land can be used for crop production, among which only ~% is considered as high potential land. The limiting factor in agriculture in South Africa is the availability of water. South Africa is one of the world’s largest producers of chicory roots, grapes, maize, castor oil, pear, fibre crops and sisal. Maize contributes to ~% of gross value of the South African field crops. Major Crops include Maize, Wheat, Soybean, Sunflower, Sorghum and other sectors include peanuts, groundnuts, Lucerne, Macadamia nuts, Avocado, Litchi, Citrus fruits, figs and nuts. South Africa’s climatic conditions generally range from Mediterranean in the southwestern corner of South Africa to temperate in the interior plateau, and subtropical in the northeast. A small area in the northwest has a desert climate. Most of the country has warm, sunny days and cool nights with average rainfall varying across the country. Majority of the farmers have started adopting intensive farming in South Africa, thereby driving the demand for mechanization. Thus, South Africa has favorable crop production conditions with the only limiting factor being water and seasonal calamities. South African cropping pattern is more manual than mechanized. The farmers use tractor and implements for the initial farming and the soil preparation.
What is the General value chain in South Africa Agriculture Equipment Market?
The value chain in the South Africa agriculture equipment market includes a vast number & type of entities including raw material (SKUs, SAUs and Spare parts) suppliers, international & domestic OEMs, distributors and end users. The raw material suppliers are responsible for acquiring and the delivery of various resources to the manufacturer. The materials supplied include metals such as steel and its alloys, plastics, ceramics, composites, nonmaterial, shape memory foams, metal foams, conductors and others. Companies have extensive R&D department which observe and extend ideas to manufacture new products that provide higher levels of efficiently and significance to the agriculture equipment. The producer of agricultural machinery is responsible for the development of new and ingenious products, catering to the variable demand of customers in the country. A strong distribution and sales network of agriculture machinery is of utmost importance for manufacturers since they are the entities that have a direct contact with the customers. The manufacturers need to assure ease of accessibility for maintenance and expansion of their customer base. The last entity in the value chain for agricultural machinery is the end users who are the customers, buying the agriculture machinery from the manufacturers through the dealers. The customers range from small scale farmers to large scale agricultural corporations. The margin charged by OEMs, importers & distributers is ~%, ~% and ~ % respectively.
Key Segments Covered:-
Market Segmentation by Product Type Including Tractors, Tillage Equipment, Planters & Seeders, Sprayers, Combine Harvesters, Precision Farming and Others. (Sales Volume)
Market Segmentation By Domestic Sales and Import (Sales Volume)
Market Segmentation Including Free State, Mpumulanga, Northern Cape, Western Cape, Kwa Zulu Natal, Others By Region (Sales Volume)
Key Target Audience:-
Existing Agricultural Equipment Companies
New Market Entrants- Domestic OEMs
New Market Entrants- Foreign OEMs
Agricultural Equipment Financing Companies
Investors & Venture Capital Firms
Agricultural Equipment Manufacturers
Agricultural Equipment Distributors
Agricultural Equipment Associations
Time Period Captured in the Report:-
2012-2018 – Historical Period
2019-2025 – Future Forecast
Companies Covered: 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
Kwa Zulu Natal Agriculture Equipment Market
Mechanization In South Africa
South Africa Agriculture Robots
Major Farm Equipment Manufacturer South Africa
Major Farm Equipment Exporter South Africa
Major Farm Equipment Importer South Africa
Major Farm Equipment Distributer South Africa
Fendt Tractor Market South Africa
Mahindra Tractor Market South Africa
Kubota Tractor Market South Africa
Massey Ferguson Tractor Market South Africa
New Holland Tractor South Africa
John Deere Tractor Market South Africa
Farm Machinery Market South Africa
Farm Equipment Market South Africa
Farmer Magazine South Africa
Farmers Weekly South Africa
Machine Rental Space South Africa
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Ankur Gupta, Head Marketing & Communications