Manufacture and Wholesale of Agricultural and Forestry Machinery in South Africa 2023

Introduction

After increasing for several years, sales of agricultural machinery reached multi-decade highs in 2022. Sales increases have largely been due to good harvests and high agricultural commodity prices that boosted farmers’ incomes. Manufacturers and wholesalers of agricultural and forestry machinery are facing challenges such as poor economic growth, high input costs and inconsistent supply of electricity. Manufacturers and wholesalers are facing challenges such as poor economic growth, high input costs, inconsistent supply of electricity, exchange rate volatility, growing structural challenges around water and sanitation, and road infrastructure and port inefficiencies.

Opportunities

Demand from other African countries as a result of efforts to boost the continent’s food production.

Export growth due to the implementation of the African Continental Free Trade Area agreement.

Outlook

Globally, sales of agricultural machinery are forecast to increase as growing demand for food leads to sales of more units, and machinery prices rise with more advanced technology. Sales should also be boosted by incentives and subsidies provided by several governments for buying agricultural machinery. Revenue from forestry machinery sales is expected to increase on growing demand for wood products and increasing mechanisation. Local sales of agricultural machinery may decrease in 2023 to around 2021 levels.

In the medium term, the industry may be affected by rising interest rates and inflation, high input costs, debt, and lower commodity prices.

Report Coverage

This report on the manufacture and wholesale of agricultural and forestry machinery in South Africa includes information on the state and size of the sector, agricultural and other industry-related economic data, notable players, corporate actions, and factors influencing the sector such as competition from importers and distributors of international brands, input costs and power disruption.

The report includes profiles of 23 companies such as Bell Equipment, Senwes, John Deere, BHBW and Iveco.

Strengths

Manufacturers invest in R&D and innovation.

Manufactures high-quality products. Several well-established companies. Well-established consumer markets. Well-located to supply machinery, especially into southern Africa.

Threats

Inconsistent supply of electricity.

Increasing cost of steel, electricity, water, labour and logistics in particular. Local manufacturers face competition from numerous importers and distributors of international brands. Poor economic growth affects demand for machinery.

Weaknesses

Severe shortages of skilled artisans, technicians, engineers and project managers. Structural problems that lead to the declining competitiveness of South African manufacturers relative to other countries.