Perceptible upturn in the investment markets

 Parallel with the strong domestic business, demand in export markets has revived perceptibly. Since December last year the farm machinery manufacturers have again been experiencing high, double-digit growth rates from international customers. They can count on substantial sales increases in the key markets of France, the USA and Russia. 

Regrettably the last two years have seen a decline in the volume of imported agricultural machinery and equipment as a consequence of the customs duties imposed on such machinery. Since the beginning of 2011 the market for agricultural machinery and equipment imports has picked up again.

Sergey Filobok, Managing Director of Tekhnokom, regrets that the introduction of the customs duties had a negative effect on import figures. “The question is whether this is profitable for farmers too”, points out Filobok. Beyond doubt there are Russian manufacturers who produce modern and effective agricultural machinery and equipment, the best examples being combines and tractors from Rostselmash, he stresses. However, there are no domestic producers of some items of agricultural machinery and equipment in Russia. The farmers are then generally forced to buy imported machines. The Managing Director of OOO Bauer Rustam Tuishev as CLAAS dealer confirms that farmers are quite unable to purchase powerful and efficient combines designed for large farms with high yield levels. And these are generally the large agroholdings that “feed the entire country”. He stresses that the technical modernizing and renewal of agricultural machinery fleets remains highly topical. According to the CLAAS dealer, one reaction to the blocking measures with introduction of customs duties was the opening of the production line for top-of-the-range combines in Krasnodar.

Alexei Aksenov from CLAAS Vostok shares this optimistic attitude. CLAAS used the whole of 2010 to prepare for growth. The company invested EUR 125.2 million in research and development and was able to maintain this at a high level. The results were displayed in the presentation of the third generation of LEXION combines. The production line for the TUCANO 480 was started up in Krasnodar. The new tractor generation XERION was also launched. The dealer network was expanded and a new dealer incentive system developed. The requirements made of presale and aftersale customer service as well as spare part supplies were intensified. 

Vladimir Ivashchenko, Distribution Manager at ACT, believes that the rise in imports of agricultural machinery and equipment is attributable to the financial revitalization of the entire Russian economy, as well as to the gradual exhausting of reserves of goods already imported. “The need to import new products is being implemented”, he says.

Dealers also attribute the market revival partly to the improved borrowing and leasing conditions. They believe that agricultural authorities will feel compelled to strike a compromise between representing the interests of Russian manufacturers of agricultural machinery and equipment and the actual needs of Russian farm businesses regarding high-performance machines.

Source: VDMA Pressemitteilungen, Newsportal Krestyanin and RealBusiness

Rosagroleasing: 2,000 contracts have already been concluded

On handing over the first batch of agricultural machinery and equipment to farmers in Rostov, the press spokesman of Rosagroleasing, Sergei Selivanov, was able to announce that 2,100 contracts for deliveries of agricultural machinery and equipment with a price reduction of 50% had been signed. He emphasized that there was very high demand for the programme. According to the forecasts of Rosagroleasing, the machinery and equipment will be delivered to farmers in good time. They reported that the Rosagroleasing branches were working almost round the clock to maintain the operative character of this measure. The agricultural machinery and equipment was ready and could be delivered to the fields immediately.

At the 12th Congress of the Association of Farmers and Agricultural Cooperatives in Tambov on 2 March 2011, Prime Minister Vladimir Putin announced the government decision to grant the farmers a 50% discount on purchases of agricultural machinery and equipment via Rosagroleasing. The government was budgeting 3.7 billion Rubles for this subsidizing measure. The total value of this machinery and equipment was 7.4 billion Rubles. The measure was launched in mid-April 2011. The local administrative bodies then received 5,800 applications, which they forwarded on to Rosagroleasing.

Source: Interfax No.17 (1012) of 04.05.2011

Supply restrictions for fuels and lubricants relaxed

 The delivery problems with fuels and lubricants should now be more or less eliminated, announced the Minister of Agriculture of the Russian Federation, Elena Skrynnik, at the regional conference organized by United Russia  in Volgograd on 6 May. The overall theme of the conference was “The development of the south in Russia in 2011-2012”.

“We have examined this situation in detail”, said the Minister. She added that fuels and lubricants are to be offered at rates 30% below the market prices. If farmers exceeded the limit for the current month, they were to be able to use the quantities to which they were entitled in the following months. The situation with possible supply constraints was to be kept under observation and the results were to be discussed at a follow-on conference.

Source: Interfax No 18 (1013) of 11.05.2011