Barloworld, BayWa form JV to drive agricultural equipment business forward in Africa

13th March 2015

By: Tracy Hancock

Creamer Media Contributing Editor

  

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Johannesburg-headquartered Barloworld and Munich-based BayWa are establishing a 50:50 joint venture (JV) for the supply of agricultural equipment in sub-Saharan Africa to take advantage the “significant opportunities” agriculture in Africa has to offer to solution providers.

Barloworld announced this week that in mid-2015, pending the approval of the local antitrust authorities, the JV would start operations in Zambia, where the companies would offer consulting, sales and services, which included US agricultural equipment manufacturer AGCO’s Challenger and Massey Ferguson brands. AGCO had experience in the country, having operated a model farm near Zambia’s capital city of Lusaka for more than two-and-a-half years, benefiting the JV.

“It is estimated that [Africa] has more than 60% of the world’s uncultivated arable land required to feed nine-billion people globally by 2050,” said Barloworld CEO Clive Thomson in a media statement.

Barloworld’s understanding of local mechanisation requirements and strong focus on after-sales infrastructure and services were expected to make expansion beyond Southern Africa a natural progression.

“Together with BayWa we look forward to building on shared competencies to provide region-specific resources and solutions to the agriculture value chain in Africa,” Thomson noted.

Barloworld views BayWa’s many years of successful operations in the agricultural equipment business and its expertise in AGCO equipment as a particularly positive aspect, added Barloworld Handling CEO John Blackbeard.

Barloworld Handling incorporates the group’s agricultural mechanisation business, Barloworld Agriculture, a long-standing AGCO distributor. Its existing AGCO distribution network and “strong Africa know-how”, provided the JV with a strong operational platform, Blackbeard pointed out.

“In addition, we are able to leverage natural synergies with established Barloworld businesses in Africa, such as the Equipment and Logistics divisions, to further strengthen our reach,” he added.

The use of modern agricultural technology geared towards the needs of a market could be instrumental in improving productivity in less technically advanced markets, such as Zambia, where agricultural operations are heterogeneous, said BayWa board of management member responsible for the agricultural equipment business unit Roland Schuler.

He believed that this was exactly where BayWa and Barloworld could contribute their experience from successful mechanisation projects at farm operations of all sizes.

The Massey Ferguson and Challenger brands would also aid the JV in successfully catering for these various target groups, Schuler explained, adding that the JV’s offering would range from the supply of equipment, parts, service and repairs to advice on crop production techniques and the use of operating resources.

Edited by Creamer Media Reporter

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