South African Agricultural Machinery Association

 

 

 

      
SOUTH AFRICAN AGRICULTURAL MACHINERY ASSOCIATION
2004 AGM

CHAIRMAN’S REPORT

  1. AGRICULTURAL ENVIRONMENT

    1. The wheat crop harvested during 2003/2004 was disappointing as a result the initial drought in the Swartland and also the Northern parts of South Africa. The outlook for 2004 is more encouraging with 13,1% hectares more being planted.
                

    2. The 2004/2005 summer crops reflect increased production with the exception of maize and sunflowers. The surplus maize carried over from the previous season was offset to a great extent by the reduced hectares being planted under maize.
             

    3. With the strengthening of the Rand commodity prices are under pressure but imported equipment became more affordable.
       

    4. Interest rates are at very low levels at the moment and are forecast at these levels in the foreseeable future. This should encourage equipment sales.
               

  2. AGRICULTURAL MACHINERY SALES

    1. The agricultural machinery suppliers experienced almost similar sales compared with the previous period, with the exception of hay equipment, which are experiencing exceptional good sales:

      Tractor Sales 2,3% down
      Combine Sales 2,7% up
      Baler Sales 32,1% up

      For the first seven months of the 2004 calendar year, the sales of equipment are still soaring.

      Tractors up 15,9%
      Combines up 57,7%
      Balers up 73,1%

      The reports from other suppliers of agricultural equipment are very encouraging and all are experiencing increased sales.

      The effect of the strong Rand on commodity pieces might however dampen the equipment sales from now onwards as already reflected in the tractor and combine sales during July 2004.

      According to Agfacts, the average age of the tractor park reduced from about 13 years to 10,5 years. This is a clear indication that the farmers are replacing their equipment.
                        

  3. TRENDS

    SAAMA members identified the following trends during the past year:

    1. Precision Farming

    2. No Till/Conservation farming

    3. Contractors using Big Square Balers

    4. Cab tractors especially in orchard and vineyard areas.

    5. Demand for bigger self-propelled equipment i.e. sprayers, forage harvesters etc.

    6. According to Afgacts the average tractor power is increasing steadily and currently exceeding the 85KW market.
                      

  4. FINANCE

    1. For the financial year ending 30 June 2004, the Income and Expenditure statement reflected an income of R107 535, 52 and an outflow of R121 067,90. Included in the expenditure statement is an amount of R25 000 which was transferred to the deposit account. The deposit account increased from R39 780,40 at the end of June 2003 to R67468, 43 at the end of June 2004. In summary there was a nett inflow of funds of R 11 967,62.

      It is important to notice that the Golf day contributed 37,3% to the income of the association. Without this source of income the association would have reflected loss for the year. It is therefore imperative that all members of SAAMA must participate in the Golf Day to prevent severe increases in membership fees.
                 

  5. OTHER SAAMA ACTIVITIES

    1. Natis/SABS/Technical Specifications

      The homologation of tractors still creates problems for the distributors. The feeling amongst the tractor manufacturers are that the SABS is unrealistic in his requirements. American tractors had to be re-homologated to European standards for South African requirements.
               

    2. Mead and McGrouther/Tony Stone

      After the initial debate with Mr Tony Stone requesting (insisting) on figures from SAAMA members, more meetings took place between Agfacts and Mead and McGrouther. The association was not approached again from Mead and McGrouther for detailed information.
               

    3. Response Group

      The Response Group made a presentation to SAAMA with the view of revealing more detailed sales information especially on the SAAMA website. In principle SAAMA has agreed to reveal more information periodically. This has not been implemented yet. I would like to thank Response Group for compiling all figures and the effective distribution of these figures.
             

    4. Used Equipment

      The importing of used equipment into South Africa is increasing. A delegation of SAAMA members had a meeting with Department of Trade and Industry on 5 August 2004. Several second hand dealers are importing tractors, combines and balers into South Africa without the equipment being inspected by SABS. This equipment does not always comply with the standards set by the SABS but is brought in on the backs of the local distributor.
             

    5. Implement Sales

      The first statistics with the sales of implements for 2002 have been released. It was well received by all members who participated and the decision was made to immediately start with the collating of the 2003 figures. I am convinced that we will have more participants taking part in this project. The information should also encourage prospective members to join SAAMA. I would like to thank the Secretary, Nick Saunders and other members involved for the hard work to make these statistics available.
                

    6. Quality of Diesel
      The standard of diesel remains a concern to the industry. The introduction of new technology diesel engine by manufacturers requires a much higher quality of diesel than that which is currently supplied to the South African market. The secretary, Dr Jim Rankin is serving on the Technical Committees for both Standard Diesel and Bio Diesel. The Technical Committee has finalised the standard for Bio Diesel. After negotiation with SAPIA the standard for normal diesel has been improved with 50%. I am convinced that the technical committee will ensure that the standard of diesel will soon be acceptable at all levels.
                 

    7. Food Pricing Monitoring Committee

      A letter had been received from the Food Pricing Monitoring Committee asking for the input of the individual companies with regard to price increases and reasons for these price increases over previous years. SAAMA’s view was that each company had its own strategy on pricing. This decision was that SAAMA members would not reveal this information to the Food Pricing Monitoring Committee.
                

    8. Membership

      Currently SAAMA consists of 17 paid up members, 4 Members did not renew their membership from the previous year. We have lost one member (GMG). The reason given by GMG for their resignation was that SAAMA members are using the sales figure to approach their dealers and offer them alternate franchises.
             

    9. Golf Day

      The seventh annual golf day will take place on 2 September 2004. This event is becoming very important for SAAMA from an income point of view. My special thanks to the Secretary, Mike Terblanche and Pieter Nel for arranging the golf day. I would also like to thank all members in advance for their support to make this golf day a successful event.
               

  6. General

    1. During the year we had to say farewell to Bert Pepler, who has decided to retire. I would like to thank Bert for the contribution he made to SAAMA over the past years. We wish him and his family a happy retirement period.
               

    2. I would like to thank the secretary for the hard work he is putting into SAAMA. Your commitment is hugely appreciated.
                 

    3. To the executive committee and all loyal members, I would like to thank you for your support during the past year. It was just a pleasure to work with all of you.

PIETER LE GRANGE
CHAIRMAN

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