Agricultural Mechanization in CIS Region – 2020

Table of Content

1. Methodology

2. Executive summary

3.0 Russia

3.1 Overview of agriculture economy

  • Allocation of GDP by sector
  • Major crop production
  • Land Utilization
  • Agricultural workforce

3.2 Agricultural mechanization

  • Overview
  • Market  development & growth
  • Key growth drivers and forecasts till 2020

3.3 Major manufacturers and key takeaways

4.  Ukraine

4.1 Overview of agriculture

  • Allocation of GDP by sector
  • Major crop production
  • Land Utilization
  • Agricultural workforce

4.2 Agricultural mechanization

  • Overview
  • Market  development & growth
  • Key growth drivers and forecast till 2020

4.3 Major manufacturer and key takeaways

5. Key takeaways and Opportunities

6. Appendixes

About GrowthPraxis, report background and methodology:

GrowthPraxis is a consulting and research company with data-driven approach. We have 6+ years’ experience in supporting fortune 500 companies, multinational and Indian blue chips companies generate actionable insights, credible market intelligence and support them in Internationalization. We have captured very detailed market and industry inputs in 100+ countries. 

Agricultural mechanization is one such field wherein we have consulted companies and also done extensive research. Further for this report besides relying on in-house existing data and facts, GrowthPraxis conducted an extensive research by conducting interviews with several industry experts, companies in different regions along with an extensive review of literature, statistics and reports published by relevant organizations concerned with the Agri-mechanization. The report will act as a guide for all manufacturers, suppliers, dealers in Agri-mechanization space in CIS countries of Russia and Ukraine. And also for foreign and multinational companies who are planning to enter or have entered CIS countries.

Executive summary

Agricultural Mechanization industry in CIS countries of Russia and Ukraine is expected to grow at a rapid pace owing to the government efforts to bridge the supply and demand gap of agriculture through R & D and technology efforts. Agricultural equipment sector in CIS countries has been witnessing robust demand and stands to gain maximum due to the need to use technologically advanced equipment in the farms in the future. Market size of agricultural equipment sector in Russia and Ukraine is XXX thousands units by volume in 2015 and it is expected to grow toXXX thousands units by 2020 at a CAGR of XX %. Russia is the fastest growing country in this region followed by Ukraine.

Russia is a bigger market in this region. Its market size in 2015 was XXX thousands units and is expected to grow to XXX thousands units in 2020 at CAGR of XX%. Russia’s estimated market share of total agricultural machinery of all the countries in this region is XX% in 2020 as compared to XX % in 2015.

Key growth drivers for agricultural equipment industry in CIS countries are

  • Aging population of machinery
  • Substandard domestic infrastructure
  • Increase in Investment for R & D
  • Rising farming income (High Support prices)
  • Acute and increasing labour shortages
  • Improved availability of credit to the farmers.
  • Government subsidies on farming equipment
  • Rising customer awareness 

Key product segments in CIS agricultural equipment industry are:

  • Tractor
  • Power tiller
  • Rice transplanters
  • Combine harvester
  • Balers
  • Weeders
  • Reapers/threshers
  • Lawn Mowers
  • Diesel engines 

Report snapshot: Excerpt from Russian market section

Agricultural economy

Russia’s GDP in 2012 was 981 USD Billion. Agriculture and its allied sectors contribution to total GDP in 2012 was 3.87per cent, while the industry and service sectors contributed 36% and 60% respectively. But in terms of absolute value, agricultural GDP was 37.9US$ billion which makes it a large market relative to other Asian countries.

Major food crops produced in Russia are Sugarcane, Wheat, Potato, Barley and Maize.

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Chart 1: Year on Year contribution of agriculture and its allied sector to Russian GDP

Chart 2: Russia has a total land area of 16,376,870sq.km in 2012. Total arable land consists of 1,211,888sq.km, which is 7.4% of total land area. Russia has 45,396 sq.km of irrigated land (2.0% of total arable land).

  • Agricultural mechanization in Russia has two major drivers: 

1. Ageing population of machinery.

2. Upgrading local infrastructure – import driven market

Population of agricultural machinery in Russia has become obsolete. Population of agricultural machinery peaked during early 1990’s after which sales and production decreased till 2006-2007. Stabilization happened during 2007-2011. After this, tremendous demand for agricultural machinery has been witnessed and will continue to grow in years to come.

Due to rising demand of agricultural machinery, production pace has not met with demand. Imports still constitute a major part of market share. Government has taken long term initiative to address this issue. Subsidies are being provided to the local manufacturers to enhance their capacity and reach. Import taxes have been increased to limit the entry of foreign manufacturers.

Market development and growth in unit

According to GrowthPraxis, market size in 2015 of total agriculture equipment was XXX units. The agriculture equipment market is projected to grow with a Compounded Annual Growth Rate (CAGR) of XX%. Market size is estimated to rise up to XXX units in 2020.

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Tractor

Tractor market size grew at CAGR of XX% between 2013 and 2015. Market size by volume in 2015 was XXX units as compared to XXX units in 2013. According to GrowthPraxis, tractor market is projected to grow at CAGR of XX% till 2020. Estimated market size by volume in 2020 is XXX units as compared to XXX units in 2015.

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Total export and import quantity was XXX units in 2015, of which imports consisted of XXX units. Import share increased from XX% in 2013 to XX% in 2015.

Power tiller

Estimated power tiller market size in 2020 is XXX units as compared to XXX units in 2015. It is projected to decline at CAGR of XX% between 2015 and 2020. Power Tillers are generally purchased with additional attachments for farming purposes.

Diesel Engine:

Diesel engine market size grew at CAGR of XX% between 2015 and 2013. Market size by volume in 2015 was XXX units as compared to XXX units in 2013. According to GrowthPraxis, tractor market is projected to grow at CAGR of XX% till 2020. Estimated market size by volume in 2020 is XXX units as compared to XXX units in 2015.

Total export and import quantity was XXX units in 2015, of which imports consisted of XX%. Import share increased from XX% in 2013 to XX% in 2015.

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Rice Transplanters, Combine Harvesters and Balers

Market for rice transplanters grew rapidly at CAGR of XX% from XXX units in 2013 to XXX units in 2015.

Combine harvesters market grew at CAGR of XX% since 2013.

Balers grew at a rapid CAGR of XX% from XXX units in 2013 to XXX units in 2015.

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Weeders, Reapers and Lawn Mowers

Market for weeders remained more or less stagnant at CAGR of XX% from XXX units in 2013 to XXX units in 2015.

Reapers and threshers market grew steadily at CAGR of XX% since 2013

Lawn mowers declined rapidly at CAGR of XX% from XXX units in 2013 to XXX units in 2015.

9 

Major Manufacturers and key takeaways

This shall cover in brief details about manufacturing landscape, key manufacturers and their sales and also sharing inputs on their competitiveness

Finally, each country section shall be concluded with opportunities for global manufacturers which can be looked into from that country