Lemken chief executive officer (CEO) Anthony van der Ley is projecting a 6-7% drop in international farm machinery sales next year.
This follows a period of sustained growth in 2022 and 2023.
Van der Ley is citing a number of reasons for the projected fall off in sales next years. These include the fall out from Covid-19 and farmers’ increasing cost base.
But by far, according to the CEO, the biggest factor driving down sales next year is the rise in inflation witnessed across all international markets over the past 12 months and the accompanying impact this has had on interest rates.
Van der Ley made these comments while attending a Lemken machinery launch event, held in France earlier this week.
The company has just recorded an annual turnover of €559 million. Exports account for 80% of business turnover.
The Lemken CEO confirmed that the company is currently selling 15,000 machinery units per year and employs 1,800 around the world.
“We are a family owned business that puts innovation, in every sense, at the heart of our commitment to customers,” he said.
Lemken grows its family
The past year has seen Lemken continue to acquire machinery businesses that complement its own priorities for the future. The most recent example of this was the acquisition of the South Africa-based seeding technology company Equalizer.
Lemken has also invested in the Netherlands-based, agtech specialist business Track32.
The rationale behind this development was the increased scope it delivers in allowing the machinery manufacturer to include artificial intelligence (AI) within its product portfolio.
Back in 2018 Lemken acquired Skeketee, a manufacturer of mechanical weeding equipment.
“We have managed to triple Skeketee sales over the past five years. But it is time for change,” van der Ley said.
“The decision has been taken to fully incorporate the Skeketee business within the Lemken family. And the most obvious outworking of this is the fact that all Skeketee brands will feature in Lemken corporate colours only, from this point onwards.”
AI in the future
Looking to the future, Van der Ley believes that the inclusion of AI will be a key driver for Lemken and its future product offerings.
The company already includes sophisticated camera systems in many of its product lines.
“The development of fully autonomous equipment lines is fast approaching. We are 90% of the way there in making this a reality,” said van der Ley
“AI is making this a reality. The technology can be used to implement a farmer’s thinking processes without that person being physically in a tractor.
“As we look to the future, farmers must be given the opportunity to manage their businesses more effectively. And this cannot be achieved if they are physically out in fields, manually controlling pieces of equipment.
“And the increasing use of AI will make all the difference in this regard.”
But AI comes with a large price tag. The starting point to include the most basic form of this technology as part of any tillage equipment item comes in at €50,000.
When asked how family farm businesses could be expected to invest in this form of machinery system, van der Ley responded: “There is no reason why groups of farmers cannot come together and the make the required investment.
“Farmers working in partnership will deliver the best results, both today and into the future. The widespread of new technologies underpins the principles associated with next level farming.”
Priorities
Lemken’s CEO believes that farmers can look to the future with great confidence. The end game is that of maximising crop yields while, at the same time, working with the environment in the most effective ways possible.
Making this happen will require the application of certain basic principles. Underpinning all of these developments is the need to improve soil structure and quality.
Significantly, ploughing can be part of this commitment, according to the Lemken CEO.
“Putting in place sustainable water management principles will also be important,” he said.
“Automation and digitalisation will, increasingly, allow farmers to maximise crop outputs using lower input levels.
“AI will be critically important in this regard.”
Anthony van der Ley also believes that agricultural machinery manufacturers must make the effort of reaching out directly to the general public, telling consumers about the advancement in technologies that are now impacting at farm level.
Looking to the future, Lemken wants to firmly establish its presence in a total of 25 countries around the world.
China and South East Asia are already priorities in this regard. Of equal significance, is the potential represented by North and South America.
Lemken is currently developing a new, state-of-the-art manufacturing facility in the Netherlands. It should be fully operative by the late spring of next year.
The new site will be used as the hub for the company’s new product lines, featuring the inclusion of AI plus greater levels of digitalisation and automation.