Business not easy
HIGHLAND SHOW PREVIEW
Business not easy
for tackle firms
Scotlands traditionally
strong machinery sector is
being tested by the strong
£ and farm incomes slump,
reports Mike Williams
THERE have been several attempts to establish large-scale tractor production in Scotland, and they have never achieved more than short term success. But Scottish farm machinery manufacturing has a long and impressive record of building equipment for local farms and for world-wide export.
Business for the Scottish manufacturers, like their competitors south of the border, is not easy at present. Slimmer profit margins are forcing many UK farmers to reduce or delay their investment plans, and the strength of the pound is making export sales more difficult.
In spite of the strength of sterling, Ayrshire-based FJ Pirie has managed to maintain its overseas business at about 32% of total sales, but in many cases this has been achieved by making deep cuts in profit margins, said managing director Frank Pirie.
Mr Piries company specialises in equipment for ventilation and temperature control in potato and vegetable stores. It is one of the most comprehensive ranges available, but the increasing strength of the pound has produced the equivalent of a 20% price increase in most of their overseas markets.
"Its a serious problem," said Mr Pirie. "We worked very hard to build up our exports to countries such as France and Denmark, and we dont want to lose that business. So far we have been able to maintain our overseas sales, but we have also lost orders because of the exchange rate."
Grays of Fetterangus makes a wide range of equipment including front-end loaders and machinery for grassland and arable farming, but to some of their customers they are best known for the Tubeline range of bale wrappers.
The Tubeline system was developed by an Aberdeenshire farmer and has been in the Grays product line since 1987. Round and, more recently, square bales, are placed end-to-end and are wrapped in a sausage-shaped pack which can be of unlimited length. It is a system which needs more storage space than stacks of individually wrapped bales, but the 50% saving in wrapping film per bale claimed for the Tubeline is a big attraction.
Tubeline wrapping is used for silage and to pack straw bales for ammonia treatment. The system is popular in several overseas markets, and exports sales are currently ahead of the UK market where problems in the beef and dairy industries are restricting UK demand.
One of the ways Ritchie Farm Equipment stimulates sales at a time when demand is flat is by developing a steady stream of new and updated products for its range of feeding and handling equipment for stock farms. But it made a big expansion two years ago when it bought the William Cook range of bale handlers and moved production to its Forfar, Angus factory.
"We have built up a very strong export business, particularly to Germany and other European markets, but the value of the pound is making life very difficult for exporters at present," said sales manager Matt Thompson. "But at least we will be in a good position when the exchange rate improves."
Reekie has also developed a strong export market, but the overseas demand for its potato machinery could be further strengthened by the takeover last year which made Reekie a subsidiary of the Dutch-based Netagco group. In an industry increasingly dominated by big international companies, Reekie could have much to gain from Netagcos marketing clout.
Another factor in Reekies sales success in the UK and overseas has been a strong research and development policy, and the newest result is the two-row Dominant 3000 harvester announced earlier this year. A special feature of the new harvester is the choice of seven different cleaning modules, with a quick-change design enabling the operator to match the cleaning system to crop and ground conditions.
Two of the UKs leading manufacturers of trailers and muck spreaders, Fraser Agricultural and Marshall Trailers, are both Aberdeenshire based.
In spite of difficult market conditions, Fraser increased its sales volumes during the last 12 months, said sales manager Ian Chinn, and this has been achieved by a major change of marketing emphasis. In the UK it has developed new products for the more buoyant arable sector, including a trailer for high speed tractors and a new high-capacity root crop trailer. It has also stepped up its export sales campaign.
"The situation is not easy, but I think the decisions we made were correct and we have increased our sales," said Mr Chinn. "But there is a lot of pressure on our profit margins and the value of the pound is a serious problem."
The strong pound brings benefits as well as problems, explained Charles Marshall of Marshall Trailers. Many of the components used in its factory come from European suppliers, and this helps to keep down production costs, he said.
"Our production volumes have remained fairly steady, but we are currently seeing a significant improvement, and it is the first time we have been in this situation for about a year. I hope we will be able to maintain the increase, at least for the next few months," he said.
Grays of Fetterangus makes this Tubeline bale wrapper.
Left:Reekie Dominant 3000 comes with seven different cleaning modules.
Below: Quiet crate from Ritchie is designed for horned cattle.