Published on 31/01/2013
Siam Kubota eyes 25% sales growth Siam Kubota Corporation, the country's leading agricultural machinery producer, expects sales this year to rise 25% to 50 billion baht, thanks to solid growth in the farm sector. The joint venture between Siam Cement Group, Thailand's largest industrial conglomerate, and Japan's Kubota Corp earned sales of 40 billion baht last year, up 30% from 2011. Globally, Kubota posted total sales of around 300 billion baht. "Thailand will become the centre of our exports worldwide, meaning the percentage of exports will increase," said Siam Kubota president Hiroshi Kawakami. The company estimates its market share at 70% in the agricultural machinery sector, which was valued at 50 billion baht last year. It anticipates 3.5-4.5% GDP growth in the agricultural sector, with increases in both output quantity and crop prices, particularly for field crops where demand will continue to be high. Senior executive vice-president Opart Dhanvarjor said certain government policies related to agriculture have helped drive the company's sales each year. "The government's rice pledging scheme greatly affected [our sales]. Even if the price decreases [in the future], the use of agricultural machinery will help boost efficiency and lower costs over the long term. I am still confident Thailand needs and has a demand for machinery," said Mr Opart. Chamornwut Tamnarnchit, Siam Kubota's marketing division manager, said a drought will not have a large effect on the company this year as the northeastern, northern and central regions still have adequate water supply. Meanwhile, the company plans to add 18 branches in Thailand along with 60 new sites in Cambodia, Laos and Myanmar.
"In Myanmar, Laos and Cambodia, their economies still rely on the agricultural sector and farming is the major occupation. There will always be a need to improve farming efficiency, which will drive the demand for agricultural machinery," said Mr Opart. Kubota started exporting to the US, and this year some products will be shipped to India and Australia. Mr Kawakami said the company plans to set up a plant in Thailand manufacturing hydraulics and cast iron for tractors that will be worth 900 million baht. He estimates exports will make up 20% of total production this year.