Tractor maker Deere aims to ride green revolution in Africa
John Deere expects to see demand for its farm equipment in Africa grow 8 to 10pc annually in the coming years, driven by expansion in key markets like Ethiopia and Zimbabwe, a local company executive said.
Farming accounts for around 60pc of total employment in Africa, according to the World Bank. 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.
A global policy shift away from food aid toward local production - championed at the start of the decade by the World Food Programme 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.
“We started to see a commercial market developing for agricultural commodities ... That gave an incentive for farmers to produce more,” he told Reuters in an interview late on Thursday.
Taylor said around 80pc of its equipment shipments to Africa currently go to 10 markets, including South Africa, Zambia, Kenya and Ghana.
“We see three or four countries with significant upside growth potential in the medium-term,” he said. “We see opportunity in countries like Angola, Zimbabwe, Ethiopia and obviously Nigeria.”
Deere, best known for its John Deere branded tractors, currently ships its products to local dealers in Africa where its main competitors include CNH Industrial (CNHI.MI) and Landini.
Deere’s dealer in Ethiopia is partnering with the government, in the midst of reforms, to set up an assembly plant to supply farm machinery to the market of around 100 million inhabitants.