Чехия – 2011 – Сельскохозяйственное и лесное машиностроение
Чехія – 2011 – Сільскогосподарське і лісове машинобудування (анг.)
Agricultural and Forestry Machinery
Czech Manufacturers of Agricultural and Forestry Machinery Hold Their Own Even on Tough Markets
Manufacture of agricultural and forestry machinery (NACE 28.3) is to become one of the expanding segments of the Czech engineering industry in the future. “Czech firms have been increasing the level of their participation in international business, and import of foreign equipment has been growing at about the same rate as the success of Czech manufacturers on foreign markets,” says Dušan Benža, the director of the secretariat of the Czech Agricultural And Forestry Machinery Association (A.ZeT).
Could you evaluate the development in the area of manufacture of agricultural and forestry machinery in the CR?
There are about 100 manufacturers of agricultural and forestry machinery in the Czech Republic. The Czech Agricultural And Forestry Machinery Association (A.ZeT) associates 45 firms, and its members include all leading domestic manufacturers. Overall production of member firms amounts to approximately CZK 18 billion, which represents 75% of overall domestic production. A.ZeT members also account for over 80% of overall Czech export, which amounts to CZK 12 billion.
Before 1990, the former Czechoslovakia was among the ten biggest exporters of agricultural machinery worldwide. Following the collapse of the markets in the former eastern bloc, our manufacturers have been able to gradually find space on Western European markets. Besides the traditional ZETOR tractors, well known in Europe and overseas, main export articles include mowing machines, front-end loaders, manure spreaders, soil-tilling machines (cultivators, gates), trailers and semi-trailers, and a whole range of small agricultural mechanisation products, including tools. Production of more specialised equipment is also successful, such as stump grinders or refineries for oil-seed processing. Leading Czech manufacturers and exporters include AGROSTROJ Pelhrimov, FARMET Ceská Skalice, LASKI Smržice, RomiLL Brno, STROM Export Praha, ZDT Nové Veselí. Manufacturers of equipment for animal farming also enjoy success on European markets (AGE Ceské Mezirící, FARMTEC Tábor and others). Main machinery import include machines not manufactured in the Czech Republic. These are combine harvesters, higher power tractors (over 120 kW) and presses. Unfortunately, these machines also include harvest cutters today, which we used to manufacture and even export, but the production stopped. Manufacture of machines for harvesting red beets suffered the same fate; we are now fully dependent on import. The majority of imported tractors in the last ten years was of the following brands: John Deere (23%), New Holland (13%), and Case IH (11%). the most popular combine harvesters are Claas (36 %), New Holland (24%), and John Deere (21%).
Three years ago, the global economic crisis had an impact on agriculture as well, and it also affected our agricultural machinery market. The recession had different forms in individual countries: it was not that intensive in countries with strong national support for agriculture (France, Germany), as it was in others. From the point of view of sales of agricultural machinery, 2008 was a record year, and sales could not be expected to grow as much as they had done in the years before. However, the slump of 2009 was dramatic. Farmers postponed their investment plans and limited their purchases of machines. The economy has been slowly recovering since 2010, the downward trend has turned around, and sales have started to grow. According to findings of the Association of Agricultural Machinery Importers and the Czech Agricultural And Forestry Machinery Association, 2321 tractor units were sold in 2011 as opposed to 1878 units in the year before that, i.e. a growth of 23%; 194 units of combine harvesters were sold during the same period as opposed to 136 units the year before, i.e. a year-on-year growth of 42%; however, this does not mean a full recovery yet – a year-on-year comparison of sales for the first six months puts us approximately at the level of 2006.
The manufacturers who dedicated a part of their capacities to cooperation production have suffered more severe consequences because diminishing demand forced the final manufacturers to move parts of the cooperation home in order to utilise their own production capacities. Manufacturers of final machines, who are less dependent on cooperation production, are in a better shape because they could keep their employees by withdrawing external cooperation to their own operations. Manufacturers of smaller machinery, for the purchase of which it is easier to find money, are also less affected. Sales of spare parts have seen a significant increase as well.
What successes can the members of your Association present? Are Czech firms from your industry successful in entering foreign markets?
The production potential of Czech agricultural engineering exceeds the absorption capacity of the domestic market. Export is thus an important strategic direction for us, and support for Czech export is one of A.ZeT’s main activities. Czech firms have been increasing the level of their participation in international business, and import of foreign equipment has been growing at about the same rate as the success of Czech manufacturers on foreign markets. We only monitor the financial aspects of foreign trade because nobody in our country collects foreign-trade statistics about the numbers of traded units. Similarly to domestic sales, foreign trade suffered a slump of 30% between 2009 and 2010 when compared to the year before. Foreign trade recovered in 2011, and the level of export and import has stayed approximately the same: in terms of money (about CZK 13 billion), the amount of import is comparable to that of export.
Czech firms that can offer competitive products have already established themselves on the European market, exhibited at important trade fairs, such as SIMA Paris, AGRITECHNICA Hannover, and other exhibitions in Europe, and conduct business with foreign firms, including common entry to markets of third countries. It is the participation of our firms at the mentioned trade fairs and references to good technical parameters, quality, and reliability of Czech machinery that fill us with optimism with regard to possibilities Czech manufacturers have even on the tough common European market.
Naturally, the biggest business partners are our neighbouring countries, Germany, Austria, and Slovakia and also France andPoland. This really depends on what is being offered, e.g. Zetor has traditionally been successful in Scandinavia and in the Baltic states. Individual manufacturers are also beginning to re-establish their partners in former Soviet Union countries – Russia,Ukraine, Baltic states – and continue to gradually gain a foothold in the new EU countries – Romania and Bulgaria.
The quality of Czech products is comparable to the European level. This is also evidenced by the fact that, for commercial reasons, there are many machines and a lot of equipment on European fields and in European stalls that have been developed in the CR and manufactured in Czech plants with colours of their foreign business partners. Not every Czech firm is willing to accept this model. It is, however, a general trend, and if such cooperation secures Czech jobs and allows us to enter foreign markets, then why not.
Our industry can take pride in the excellent standard of top management – in recent years, the following managers received prestigious awards: Karel Ždárský, director and chairman of the board of the Farmet joint stock company, who was named the businessman of the year of the Region of Hradec Králové and placed in the top five of the national competition Businessman of the Year 2008, Lubomír Stoklásek, the director-general and chairman of the board of Agrostroj Pelhrimov, who received the title Manager of the Year 2011. It is not a coincidence that the two firms are the biggest Czech exporters of agricultural machinery.
Your Association also presents itself at important domestic and foreign events. Could you mention some specific events for 2012?
We have long-term cooperation agreements with the organisers of a couple of leading domestic exhibitions of agricultural machinery, namely Veletrhy Brno, a. s., and Výstavište Ceské Budejovice, a. s. The set of international trade fairs TECHAGRO / SILVA REGINA / ANIMAL VETEX in Brno can easily compete with the best events of its kind. It has developed an excellent international renown and is second best to only two of the most important events in the field in the European context: SIMA Paris and AGRITECHNICA Hannover. A.ZeT initiated the founding of the trade fair in 1994, has always been one of its co-organisers, participates in formulating its concept and in preparing the accompanying programme. Our member firms occupy a significant portion of the exhibition space. In recent years, TECHAGRO has become the most successful project of all the trade fairs organised in the Czech Republic.
We also try to present Czech manufacturers abroad. The most important events in our industry, not only in European but also in a global context are the SIMA trade fair in Paris and the AGRITECHNICA trade fair in Hannover. We have not missed a single year at the latter fair since 1995. We also promote selected events to become state-sponsored foreign trade fairs. In this respect, we have repeatedly succeeded with SIMA in Paris and AGROMEK in Heming, Denmark. However, we also organised joint participation in Kiev, Ukraine, Poznan, Poland, at AGROSALON in Moscow (it is our most important event of the year in 2012 because the Paris and Hannover events only take place in odd years), and twice even at EXPO AGRO in Argentina. Where we are unable to secure sponsored participation, we try organise joint participation of Czech firms even without state support: traditionally, we have had Czech participation at both Hannover events, i.e. AGROTECHNICA and EuroTier. At the very least we prepare a Czech informational stand, which is the case for trade fairs EIMA in Bologna or FIMA in Zaragoza.
Do you cooperate with similar foreign associations?
Between 1994 and 2000, our association was a member of the European Committee of Associations of Manufacturers of Agricultural Machinery CEMA (Comité Européen des Groupements de Constructeurs du Machinisme Agricole). Our manufacturers could benefit from an easier access to important marketing information related to markets for agricultural and forestry machinery in member countries. Other CEMA activities included coordinating professional European trade fairs, collecting statistical data, and preparing background materials for the creation of technical regulations. The main disadvantage was the significant financial burden, and the fact that some activities were intended only for the then member countries of the EU. Later on, CEMA ceased to coordinate trade-fair events,which was why we cancelled our membership in this European association. However, bilateral relations and personal contacts with representatives of individual national associations and leading European firms have been maintained. We have above-average relations with associations in Slovakia, Hungary, and France. We have also established close cooperation with the International Liaison Center for Agricultural Machinery Distributors and Maintenance CLIMMAR (Centre de Liaison International des Marchands de Machines Agricoles et Réparateurs), so we are always in touch with the happenings on the European stage.
Do your members utilise European subsidies for their projects? What programmes do they mainly participate in?
In 2009, we have been successful with our application to the Ministry of Labour and Social Affairs and received a subsidy to realise a project through which it was possible to ensure training of employees of the association’s participating entities. The project, called the “Comprehensive Educational Project for Members of Agricultural And Forestry Machinery Association”, registered as CZ.1.04/1.1.02/23.00400, was co-financed from the European Social Fund as a part of the Human Resources and Employment Operational Programme and from the budget of the Czech Republic. Altogether, the project contributed approx. CZK 3.7 mil. to improving the qualification of employees from our member firms.
The project was planned for three years, and realisation started in August 2009 and competed in July 2012. The objective of the educational activities was to improve the qualification of participants and their adaptability to changes in firms and on the labour market. The target group included over 200 employees of various professions: managers, salesmen, salaried employees, and administrative employees.
Association members also make use of other subsidies with most of them originating in the Operational Programme Enterprise and Innovation, which is oriented at supporting the development of commercial environment and at transferring research and development results into commercial practice. Within this programme, firms mainly participate in the Marketing programme, which offers subsidies for participation at foreign trade fairs and exhibitions and information about foreign markets. Another popular programme is Innovation which helps to introduce innovative products created on the basis of enterprise research and development activities or through technology transfers to markets.
Are you aware of any strong trends or expectations that influence the agricultural and forestry machinery industry?
It is extremely complicated to attempt a reliable long-term prediction. The crisis did not manifest itself only in the declining numbers of orders but also in the fact that it is difficult to predict economic development. Of course, there may be a recovery but also a downturn. The Czech economy is small and open, and it is dependent on export. Naturally, we would appreciate if there was a repeat of the development during the last two years, i.e. if the information from the banking sector was confirmed that the farmers’ interest in buying is growing again, and the positive trend in mechanisation purchases continued at the same rate and was of a more lasting nature. However, agriculture is a sector extremely dependent on political decisions, both at the national and Union level. Of late, there have been some unfavourable domestic decisions regarding the abolition of the so-called green diesel or the introduction of a tax on still wines. Regular competition is also being disturbed by policies of supermarket chains – with the existing legislation, farmers are excessively dependent on the chains. The future of financing the Common Agricultural Policy (CAP) after 2013 is bound to become a controversial question that will divide EU member states. The Common Agricultural Policy, with its unbalanced and unjust interventions and subsidies, disrupts free competition and discourages hundreds of Czech farmers from working, even from the production of meat, cereal, milk, fruits and vegetables, i.e. areas in which Czech agriculture is capable of competing. In view of differing approaches, there is the question of the degree to which reform can be pushed, reform that would decrease the overall amount of finances for the CAP, increase support for the development of the countryside, improve the quality of life in the country, and, at the same time, lower production subsidies. The reform should also be accompanied by an overall relaxing of regulation in the sector and should not bring asymmetrical solutions that would disadvantage some member states (including the CR).
More about the Czech Agricultural And Forestry Machinery Association at www.zetis.cz
Supplemet of Czech Business and Trade 3-4/2012