An executive at Deere & Company, an American corporation that manufactures agricultural, construction, and forestry machinery said driven by expansion in key markets like Ethiopia and Zimbabwe, the company expects to see demand for its farm equipment in Africa grow 8 percent to 10 percent annually in the coming years.
According to the World Bank, farming accounts for about 60 percent of total employment in Africa. 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.
The Managing Director of Deere & Company, Jacques Taylor revealed that at the start of the decade, the World Food Programme championed a global policy shift away from food aid towards local production. He said the initiative, which has sparked a green revolution, increased Africa’s potential as a market.
In an interview, Taylor said “we started to see a commercial market developing for agricultural commodities … That gave an incentive for farmers to produce more”. He noted that about 80 percent of the company’s equipments currently go to 10 markets, including South Africa, Zambia, Kenya and Ghana.
According to Taylor, “we see three or four countries with significant upside growth potential in the medium-term. We see opportunity in countries like Angola, Zimbabwe, Ethiopia and obviously Nigeria.”
Best known for its John Deere tractors, the company currently ships its products to local dealers in Africa, where its main competitors include CNH Industrial and Landini.
Deere reported $2.8 billion operating profit from its equipment business last year, with 39 percent of that coming from its business outside the US and Canada. Sales grew 5 percent in 2017 in those home markets.