In 2022, difficulties appeared in the Russian agricultural machinery market with the lack of components necessary for the production, which were imported into Russia mainly from EU countries before the sanctions. Production volumes fell in the first half of last year, but during the year the market began to recover: the volume of supplies, for example, from China and Argentina, was increased, as well as domestic production was established. How do domestic agricultural machinery manufacturers cope with the changed market situation?
The first link of agriculture includes service industries, which, in particular, are engaged in the production of agricultural machinery and equipment for the food industry, as well as agricultural construction. It is believed that it is the servicing branches of agriculture that determine the industrialization and intensification of production.
Types of agricultural machinery:
Harvesting equipment (for example, a combine harvester). It is designed to harvest a variety of grain crops and combining four separate harvesting operations—reaping, threshing, gathering, and winnowing—to a single process.
Tractors. They are divided into several types: for agriculture, for forestry, for viticulture, for gardening, mini tractors, etc.
Sprayers for plant protection.
Sowing equipment. This category includes seeders, planters, bunkers.
Tillage machines. This machines are used for plowing, soil treatment, soil compaction etc.
Forage machines. Farm implement that harvests forage plants to make silage - like mowers, rakes, balers, harvesters, foragers.
The situation on the Russian market of agricultural machinery
By the end of 2022, the share of locally manufactured agricultural machinery in Russia has increased to 61%. In 2013, the share was 24%, in 2019 — 54%, in 2020 — 58%, and in 2021 — 51%. Representatives of the Ministry of Industry and Trade also noted an increase in the share of Russian food processing equipment on the domestic market — up to 55% in 2022 (in 2014 it was at 12%). The value of the Russian agricultural machinery market in 2022 is estimated at 389.4 billion rubles. This is 0.4% lower than in 2021.
Fig. 1. The value of the agricultural machinery market in Russia, 2022, billion rubles and %
Source: Association Rostspetsmash
Moreover, over the past year, the increase in the share of Russian equipment within the country is explained by a reduction in the total volume of equipment. So, as the first deputy chairman of the Federation Council Committee on Agrarian and Food Policy Sergey Mitin notes, the volume of agricultural machinery is shrinking faster than it is replenished: for example, the number of tractors has decreased from 600 thousand pcs to 400 thousand. At the same time, the volume of production of domestic agricultural machinery in value continues to grow.
Fig. 2. The value of produced agricultural machinery in Russia, billion rubles
Source: Association Rostspetsmash
In the first half of 2023, the production of agricultural machinery in Russia increased by 17.2% compared to the same period of last year: its value accounted to 145.9 billion rubles. As for sales in the domestic market, they increased by 8.7% to 124.4 billion rubles. The value of export changed slightly — accounted to 10.1 billion rubles (-1% compared to January-June 2022).
It is obvious that the increase in production volumes in value is associated with an increase in the cost of production of agricultural machinery, especially in 2023. Which, in turn, is affected by the rise in the cost of logistics and components. And if production is growing in value, then in volumes, on the contrary, in some categories of equipment, it is possible to notice a decrease in production. For example, in the first half of this year, domestic manufacturers produced 27.1% fewer seeders (2759 pcs.), 28.4% fewer harrows (2623 pcs.), 20.4% fewer plows (1560 pcs.), 3.8% fewer tractors (2868 pcs.). However, positive dynamics was noticed in such categories of equipment as grain harvesters (by 32.6% to 3,171 pcs.) and self-propelled forage harvesters (by 38.8% to 204 pcs.).
Fig. 3. Dynamics of production of agricultural machinery by categories in the first half of 2023 (compred to the first half of 2022), pcs.
Source: Association Rostspetsmash
In many ways, the increase in the output of some categories of equipment is explained by the low base of 2022. If we compare the number of self-propelled forage harvesters and grain harvesters produced this year with the volume of production of similar types of equipment for the first half of 2021, there will be no positive dynamics. It turns out that production volumes have only reached the level of 2021.
Import of agricultural machinery
Despite the gradual development of domestic agricultural machinery manufacturers, the volume of imported equipment for the industry is also growing. In total, in the first half of 2023, the volume of agricultural machinery that was imported to Russia estimated at $ 1.349 billion. The largest importers for Russia are Germany (433.57 million US dollars and 32.2% in the structure of imports), China (279.15 million US dollars and 20.7%), the Netherlands (78.55 million US dollars and 5.8%), Brazil (69.05 million US dollars and 5.1%).
Table 1. Structure of agricultural machinery imports to Russia by country of origin, $ and % (1st half 2023)
| Country of origin | January-June 2023 | |
| Germany | 433 568 485 | 32,2% |
| China | 279 149 005 | 20,7% |
| Holland | 78 545 126 | 5,8% |
| Brazil | 69 047 268 | 5,1% |
| Italy | 65 995 836 | 4,9% |
| France | 63 981 026 | 4,7% |
| Turkey | 60 604 626 | 4,5% |
| USA | 40 782 033 | 3,0% |
| EU | 30 264 358 | 2,2% |
| Poland | 27 364 938 | 2,0% |
| Czechia | 27 022 741 | 2,0% |
| Belgium | 24 043 089 | 1,8% |
| Austria | 18 915 079 | 1,4% |
| Spain | 15 564 825 | 1,2% |
| Canada | 10 268 315 | 0,8% |
| Finland | 9 880 835 | 0,7% |
| Hungary | 8 472 748 | 0,6% |
| UK | 8 231 421 | 0,6% |
| Slovakia | 8 141 225 | 0,6% |
| India | 7 353 083 | 0,5% |
| Others | 61 345 044 | 4,7% |
| Total | 1 348 541 106 | 100% |
Source: Association Rostspetsmash
In general, in the first six months of 2023, the supply of tractors of foreign brands (non—CIS countries) increased 1.6 times in annual terms - up to 9,804 units. The segment of the Russian market, which is being released due to a reduction in supplies from EU countries, is gradually being occupied mainly by China. China is the second largest importer of agricultural machinery to Russia (according to data for January-June 2023) and occupies 20.7% of the import structure — the country imports machinery for 279.15 million US dollars. China is also the main supplier of tractors to the territory of the Russian Federation this year. Its share in the import of tractors to Russia is 65.7% — which is equal to $ 168.61 million in value.
Table 2. Structure of tractor imports to Russia by country of origin, $ and % (1st half 2023)
| Country of origin | January-June 2023 | |
| China | 168 611 068 | 65,7% |
| Germany | 26 478 688 | 10,3% |
| USA | 17 609 609 | 6,8% |
| France | 12 089 198 | 4,7% |
| Austria | 10 320 024 | 4,0% |
| India | 5 705 644 | 2,2% |
| Turkey | 5 198 131 | 2,0% |
| UK | 4 241 143 | 1,6% |
| Finland | 2 732 445 | 1,1% |
| Japan | 2 497 380 | 1,0% |
| Italy | 1 380 587 | 0,5% |
| Uzbekistan | 294 625 | 0,1% |
| South Korea | 111 731 | 0,04% |
| Total | 257 270 273 | 100% |
Source: Association Rostspetsmash
It is worth noting that China has been increasing the volume of agricultural machinery supplies to Russia over the past few years - 945 tractors were delivered in 2020, 1839 pcs in 2021, 4883 pcs in 2022. Thus, in the period from 2020 to 2022, the import of tractors into the country from China increased by 5 times.
Table 3. Dynamics of imports of Chinese tractors to the Russian Federation by competitive niches, 2020-2022, pcs.
| 12 months of 2020 | 12 months of 2021 | 12 months of 2022 | ||
| From 40<150 h.p. | The niche of competition of JSC "MTZ" | 925 | 1812 | 3809 |
| From 150<250 h.p. | The niche of competition of foreign manufacturers | 20 | 27 | 1012 |
| From 250<500 h.p. and over 500 h.p. | The niche of competition of JSC PTZ and Buhler | 0 | 0 | 62 |
| Total | 945 | 1839 | 4883 |
Source: Russian Foreign Economic Activity database, Agroinvestor journal
But it must be borne in mind that equipment from Western companies was also supplied to Russia from China: for example, John Deere, Massey Ferguson, Deutz-Fahr, Case IH tractors — with a total volume of 428 units in 2020, 774 — in 2021 and 227 — in 2022. Therefore, if we consider deliveries from China only of tractors of Chinese brands, it turns out that in the period from 2020 to 2022, their imports to Russia increased not 5, but 9 times — from 517 to 4656 units of equipment.
Taking into account the fact that the Russian market now needs high-power tractors, Chinese companies are working on establishing the production and supply of machines with a capacity of more than 250 hp. According to the data of the Foreign Economic Activity of the Russian Federation, until last year China did not import such equipment to Russia, and in 2022 it delivered 62 units of such equipment to the Russian Federation (including the import of Western brands). It is expected that manufacturers of agricultural machinery from China will enter the segment of production and supply of machines with a capacity of more than 250 hp quite sharply this year, as well as in the following.
In March 2023, the official website of Zoomlion, one of the largest Chinese manufacturers of agricultural machinery, was launched for Russian farmers. In particular, Zoomlion plans to establish the production of tractors with a capacity of 260 hp, and is also developing a new tractor with a capacity of 300-400 hp specifically for the Russian market. The company considers the Russian market as a key one.
In addition to China, the Argentine brand of agricultural machinery PAUNY is entering the Russian market, which is distributed by Optitech Agro (a former partner of American AGCO in Russia). The Argentine company (as well as brands from China) considers the Russian market as a key one. PAUNY plans to cover the entire power range of tractors: if Chinese equipment so far helps to cover the need of Russian farmers for equipment with a capacity of up to 260 hp, then Argentine equipment will provide domestic farmers with tractors with bigger capacity — 310 and 370 hp.
According to Tatiana Fadeeva, CEO of Optitech Agro, trators from Argentina are suitable for working in no-till technology — a method of work in which the soil treated with minimal tillage and deep disking does not occur. In Russia, this technology is gaining popularity: in 2016, 5% of the land was cultivated in this way, and in 2023 — 12%. Optitech Agro relies on the further spread of no-till technology in Russia, which is why it is engaged in the import of PAUNY agricultural machinery to Russia. The first such tractors will be tested in Russia this fall.
Key problems of the agricultural machinery industry
The objective shortage of components and insufficient localization of production are the main problems faced by agricultural machinery manufacturers. At the same time, for example, import substitution in the production of Rostselmash for parts and assemblies is 94%. Also, the company has almost 100% switched to using local engines on combines. The key engine suppliers are KAMAZ and YAMZ. At the same time, there is no production of high-power tractors in Russia: they are mainly imported from Argentina (with a capacity of up to 370 hp) and China (with a capacity of up to 260 hp).
Since January 2020, a scoring localization system has been in effect for agricultural tractor manufacturers. Scores are awarded for components and technological operations performed on the territory of the Russian Federation. In order to receive state support for export, the manufacturer needs to have 30% of scores of the maximum value from 2022, and 40% of scores from 2024. To participate in the state competitiveness improvement program (Resolution No. 191), at the moment you need to gain 30%, from 2024 — 35%.
This year, an initiative is being considered to introduce similar localization rules for other types of agricultural machinery (in particular, the draft "On Amendments to the Annex to the Decree of the Government of the Russian Federation No. 719 of July 17, 2015"). The project of the Ministry of Industry and Trade has not yet reached the stage of consideration by the Government of the Russian Federation.
The new rules (if introduced) will affect the following types of agricultural machinery:
- tillage and sowing equipment;
- forage and livestock equipment;
- irrigation equipment;
- mounted headers for harvesting cereals, oilseeds, legumes, corn, grasses, silage and straw.
The schedule for the localization of seeders suggests that by the end of 2024, in order to receive state support, it is needed to score 40%, since 2025 — 50%, since 2026 — 60%, since 2027 — 70%, since 2028 — 85%. Thus, by the end of the current decade, the share of localization of agricultural machinery production is expected to reach 90%.
So, in 2023, OPTITECH AGRO announced its intention to localize the production of HANWO tractors (China) in Russia. The first models of HANWO tractors to be released in Russia will be ANTARES, ALCOR, ALTAIR and ATLAS with a capacity of 90 to 260 hp. The assembly line will be located at the GOLAZ plant in the Moscow region. The first such tractors are going to start producing as early as October 2023.
It is worth noting that another problem faced by Russian farmers in 2023 were the prices of agricultural machinery and, as a consequence, a drop in demand for it. Due to the increase in prices for agricultural machinery and with a decrease in the profitability of agribusiness due to lower prices for agricultural products, there is a drop in demand for agricultural machinery and equipment in Russia. Thus, it is assumed that in the first half of 2023, demand (and, consequently, the volume of purchases) decreased by 25%. Obviously, the situation is also affected by the change in importing countries that supply agricultural machinery to Russia. According to the Ministry of Agriculture, the cost of domestic agricultural machinery by the spring of 2023 has increased by 30-50% over the year. Therefore, measures to increase demand and regulate prices are being developed.
State support of agricultural machinery manufacturers in Russia
In 2022, with the help of state support, 8.7 thousand pcs of agricultural machinery and equipment were sold, as well as 23.7 thousand units of food equipment, as stated by Maria Elkina, director of the Department of Agricultural, Food and Road Construction Engineering of the Ministry of Industry and Trade of the Russian Federation. In 2022, 8 billion rubles were allocated and spent to support manufacturers of agricultural machinery.
Fig. 4. Dynamics of the budget of the federal "program 1432", 2020-2023, billion rubles.
Source: Agroinvestor journal
In 2023, less than 2 billion rubles have already been allocated for subsidies to agricultural machinery manufacturers (federal "program 1432") — despite the fact that market participants expected, on the contrary, to increase the volume of subsidies to 15 billion rubles. This, in their opinion, would contribute to stimulating demand for agricultural machinery. The Ministry of Industry and Trade also believes that the subsidies provided are not enough due to the low investment activity of farmers. For this reason, it is necessary to allocate funds to stimulate investment in the industry. According to the forecasts of economist Andrey Klepach, the volume of investments in agriculture this year will amount to 106.3 billion rubles. This is 6.3% higher than in 2022.
Due to the fact that the financing under the "program 1432" in 2023 is only 2 billion rubles. (besides, self-propelled agricultural machinery is not included in the program), many agricultural producers postpone the process of updating their machinery and equipment. Therefore, now the Ministry of Industry and Trade is preparing to allocate an additional 3.2 billion rubles. to subsidize the demand for agricultural machinery, thus financing under the "program 1432" in 2023 will amount to 5.2 billion rubles.
Also in 2023, 2.5 billion rubles were allocated to support domestic dealers of agricultural machinery, which is 700 million rubles more than a year earlier (in 2022 — 1.8 billion rubles).
This year, it is expected that the plan of preferential purchase of locally manufactured agricultural machinery will be extended. This is stated in the Ministry of Agriculture of Russia. According to the preferential plan, a 10% discount (from the price on March 1) is provided for the purchase of Russian agricultural machinery. For example, in 2023, farmers will be able to buy 6,000 tractors at a reduced cost.
The "falling out" state money will be compensated by the recycling fee, which has been indexed since July 1, 2023. The recycling fee applies to seven categories of agricultural wheeled tractors with a capacity from 30 hp to 340 hp, because it is believed that their production is established in Russia and Belarus, therefore, developed production capacities will meet the demand in the domestic market. New coefficients for calculating the recycling fee are indicated not only for new agricultural machinery, but also for machines manufactured more than three years ago. The Rosspetsmash Association believes that the indexation of the recycling fee corresponds to the policy of import substitution and will not lead to an increase in prices for Russian tractors. The measures are aimed at limiting the import of used machinery and ensuring stable capacity of domestic tractor manufacturers.
Domestic manufacturers of agricultural machinery
Rostselmash
Rostselmash is one of the largest manufacturers of agricultural machinery in Russia. The Rostselmash combine harvester plant was founded in 1929 in Rostov-on-Don. Now the company's group includes 13 companies, which are located at 11 production sites in 5 countries.
The company has an innovation center, its own experimental facilities and production of a full technological cycle. The brand produces a wide range of equipment for various agricultural operations: from tillage to harvesting, and also produces electronic solutions aimed at improving the efficiency of agribusiness and agricultural work. The brand's product includes more than 150 models and modifications of 24 types of machines and implements.
In 2021, Rostselmash sold 6,525 combines (+19%), 1,634 tractors (+24%), and exports amounted to about 10 billion rubles. The share of the company's exports in 2022 decreased to 11% (from 15% a year earlier), and the group's consolidated revenue decreased to 85.4 billion rubles (by 12%). In the second half of 2022, the same amount of equipment was produced as in the second half of 2021 — 350 tractors and up to 500 combine harvesters per month.
Despite the fact that traditional sales markets were closed to Russia due to sanctions, the company retained large volumes of supplies to the CIS countries, Mongolia, Egypt, and the Middle East. Rostselmash also plans to further increase supplies not only to the Middle East, but also to Asian and African countries. The company plans to send about 400 combine harvesters and tractors to African countries over the next 5 years. At the moment, the import of equipment is carried out in 8 African countries (among them Ethiopia, Algeria, Egypt, South Africa).
After interruptions in the import of necessary components due to sanctions against Russia in the first half of 2022, the company was forced to reduce production volumes. Thus, production for all types of equipment decreased by 21% last year. But already in the second half of the year, the company managed to fix supply chains. By 2023, it was possible to return to production of all types of equipment.
In 2023, Rostselmash plans to increase production volumes by 20%, thus reaching the production level of 2021. The key projects of the current year for the company were the creation of a transmission plant, a tractor plant and an agricultural machinery plant in Taganrog (the latter company is going to produce mounted trailer equipment). Production at the three plants will be launched in the period from the end of 2023 to the end of 2024.
The new tractor plant in Rostov-on-Don will occupy an area of 14 hectares, 62 thousand square meters will be directly used for production facilities. The company will produce tractors with a capacity from 170 to 600 hp, as well as road construction equipment. It is expected that the production volume will be 5 thousand pcs of equipment per year. As for the transmission plant being prepared for launch, its launch will contribute to the process of import substitution of components in the industry. The company will also create 1.5 thousand additional jobs.
It is worth noting that, according to the statements of representatives of Rostselmash, import substitution measures are being successfully implemented. So, in January-September 2022, 3,500 items of direct import were replaced by locally manufactured. As a result, 35 thousand items of parts were produced at the company's plants, and 16 thousand were purchased from suppliers (including Russian ones). In 2022, the harvesters were also remotorized, since foreign engines were installed on most of the machines. By March 2023 , it was possible to replace 6.2 thousand items of components for all types of agricultural machinery, and foreign engines remained only on RSM 161 combine harvesters: in Russia, engines of the power required for this machine are not yet produced. YAMZ and KAMAZ are the key suppliers of engines for Rostselmash. The first deputy general director of Rostselmash, Alexey Shveytsov, states that import substitution in the company's production of parts and assemblies is 94%.
Altai Machine-Building Plants (ALMAZ)
The company is considered one of the largest manufacturers of tillage machinery and spare parts in Russia. The company unites four plants:
- Rubtsovsky Design and Engineering Institute of Technology
- Rubtsovsky Spare Parts Factory
- Altai Scientific Research Institute of Mechanical Engineering Technology (ANITIM)
- Almaz Trading House — the network covers 65 regions of the Russian Federation and eight CIS countries
The company's production facilities are located in the cities of the Altai Territory: in Rubtsovsk (the Rubtsovsky Spare Parts Factory) and Barnaul (the ANITIM plant). ALMAZ plants produce more than 60 models of tillage and sowing equipment, as well as 330 types of spare parts. ALMAZ occupies the first place in the market of tillage equipment both in terms of the volume of equipment produced and in terms of profit. In 2022, the company's production value amounted to 7 billion rubles. On average, the Rubtsovsky Spare Parts Plant annually produces 5.2 million pcs of spare parts and over 2,300 machines.
The current situation in the market of agricultural machinery and components may allow ALMAZ to increase its market share. In 2022, the company became more actively engaged in import substitution and established the production and production of an S-shaped tines for cultivators (size 45 * 12). Now in Russia, only ANITIM is engaged in the production of such a part, before that the tines were supplied to the domestic market from European countries. In the future, ALMAZ plans to expand the line of tines for the cultivators.
Peterburgsky Traktorny Zavod (PTZ, brand Kirovets)
PTZ is part of PJSC Kirovsky Zavod, a group of companies that unites machine—building enterprises. It was the Kirov plant that produced the first local tractors in 1924.
PTZ is considered a national manufacturer of powerful wheeled agricultural tractors in Russia. The most famous PTZ brand is Kirovets tractors, which have been produced for more than 61 years. Over the years of the production's existence, over 480 thousand Kirovets tractors have been produced.
At the moment, the plant is engaged in the production of 8 models of Kirovets tractors with a capacity in the range of 300-435 hp, 1 model of Kirovets tractor with a capacity of 250 hp and 17 types of special and road construction machines.
Fig. 5. Sales of all types of tractors and industrial machines, 2013-2022, pcs.
Source: company data
In 2022, PTZ set a record for the number of tractors and other agricultural machines produced in a year: for the first time in 30 years of operation, more than 4,000 units of equipment were produced. Last year, PTZ, having a full production cycle, managed to increase it by almost 25%.
VELES
VELES is the sales leader in the market of tillage equipment among domestic manufacturers. The main types of machines and equipment produced are cultivators, ploughs, rollers, disc and spring harrows. The company holds a 14% market share. The company has been producing agricultural machinery since 2005 and now distributes its equipment not only in Russia, but also among other countries (Mongolia, Kyrgyzstan, Bulgaria).
VELES has two production sites: the main plant "Altai Agricultural Machinery Plant" is located in Pavlovsk (Altai Krai), and the logistics center is in Chelyabinsk. The volume of production in 2022 amounted to 3.52 billion rubles. In 2022, the plant produced 23% of harrows and 44.1% of combined tillage units from the total volume produced in Russia, and took the first place in the production of these types of equipment.
In 2023, over 60 million rubles have been allocated for the modernization and expansion of production (this is comparable to the volume of investments last year). Also, the company is working to reduce dependence on the human factor, due to which it will be possible to increase the volume of production.
Bryanskselmash
JSC Bryanskselmash is a subsidiary of the Belarusian company Gomselmash. It was founded in 2005. Initially, the company was planned to be created only as a localized joint venture with a Belarusian company. But at the Bryanskselmash plant, they began to engage in their own developments, so it is believed that JSC is a full-fledged manufacturer of agricultural machinery in Russia.
Since 2016, Bryanskselmash has been producing products under the brand name "DESNA-POLESIE". Now there are 7 models of combine harvesters in the model range of the enterprise. The production occupies 25 thousand sq. m., including the necessary technological operations (metal cutting, welding, assembly, etc.).
In 2022, Bryanskselmash produced 1.2 thousand pcs of equipment. By the end of 2023, production is expected to increase by 25%.
LLC "Complex Agro"
The company is among the Top 5 largest Russian manufacturers of agricultural machinery for post-harvest processing. It is a leader in the production of grain dryers — almost half of grain dryers are produced by Agro Complex (46.98% in 2021). The company supplies agricultural equipment not only in Russia, but also to neighboring countries.
The area of production sites is 17.6 thousand sq. m. According to the company's information, in 2022, 238 grain dryers, 100 liquilizers, 700 grain elevators, 100 grain storage and silos (with a total capacity of up to 80 thousand tons) were produced.
Concern Tractor Plants
Tractor Plants is a domestic machine—building concern, which is included in the federal list of system organizations. It was founded in 1996.
The structure of the Concern "Tractor Plants" includes five production sites:
- "Altai Engine-Building Plant"
- "PC Promtractor"
- "KAVAZ"
- "AGROMASH Plant"
- "KTZ Archive Center"
It is worth noting that the localization of the concern's equipment reaches 96%. One of the most famous brands of tractors of the concern is AGROMASH, which is produced by the Volga Combine Harvester Plant. In addition, in 2023, it is planned to launch sales of several new models of tractors of the brand. For example, the wheeled tractor AGROMASH 90TK began production in March 2023, and the model of the tracked tractor AGROMASH-Ruslan should appear on the market before the end of the year. The volume of production of Promtractor at the beginning of 2022 was estimated at 60 pcs of equipment per month.
Voronezhselmash (Koblik Group)
The company is considered a leader in Russia in the production of equipment for post—harvest processing - cleaning, drying and storage of grain. Voronezhselmash is part of the Koblik Group holding, which includes three more Russian plants: Romax, Zapagromash, and Intech. The last two plants produce trailer equipment for tractors (trailers, spreaders, shredders, mixers and hoppers under the brand "Hozain"). In 2022, the total revenue of the holding amounted to 15 billion rubles.
In June 2023, construction of a plant for the production of tractor trailers began at Voronezhselmash. Koblik Group is going to allocate RUB 1.5 bln for the project implementation. The area of the new plant will be 22 thousand square meters. It is planned to launch production in 2024. Experts believe that the enterprise may become the first Russian production of tractor trailers in recent times, which will help to fill the niche in the market, vacated after the departure of foreign players.
Also in May this year, it was reported that the CEO of Koblik Group was considering the option of acquiring the American John Deere plant in the Orenburg region, which had left Russia. The restart of production was planned for 2023, but there is no new information on the deal, so it is not clear whether this initiative will be realized.
"KOLNAG".
The company is engaged in manufacturing and supply of agricultural machinery for intensive technologies in potato and vegetable growing, and for mixing and distribution of fodder to cattle.
In addition to the fact that the plant produces machinery under the brands Trioliet (Netherlands) and AVR (Belgium) under the license of European companies, the company also produces its own machinery under the brand "Kolnag". For example, in September 2023 Kolnag started selling three new models of Trioliet Solomix 2 feeder-mixers.
"Pegas-Agro
The main activity of Pegas-Agro is the production of self-propelled sprayers-spreaders "Tuman-1M" and "Tuman-2M", as well as the model "Tuman-3", produced from 2019. With the help of this equipment, mineral and liquid fertilizers are applied, as well as chemical treatment of plants. Pegas-Agro agricultural machinery occupies 24% of the market of machines for fertilizer and chemical protection of plants.
The company existing since 2010. Its sprayers are supplied not only throughout Russia, but also to CIS countries. Now the company is studying new markets: Iran, as well as countries of North and South Africa.
It is noted that "Tuman" have a fairly high level of localization - from 54 to 82%. In general, "Tuman" is a Russian development, designed for domestic engineering.
In December 2022, Pegas-Agro's new production site in the village of Stroykeramika was launched. The estimated capacity of the new site is expected to be 2,500 pcs per year. The capacity of the previous production site reached only 1 thousand machines.
Industry development prospects
If localization of production continues and the existing players in the agricultural machinery market continue to work on the creation and production of new types of machinery and equipment, which were not previously produced in Russia, but were supplied mainly from Western European countries, local manufacturers will be able to fully provide agriculture with the necessary equipment.
Currently, Russian farmers are considering new countries as importers of agricultural machinery, which is lacking in the market. These are Argentina and China, whose production is localized through OPTITECH AGRO. At the same time, one should not expect the danger of complete displacement of domestically produced machinery by foreign brands. It is noted that in China there are no suitable developments of tillage machinery (for example, ALMAZ and VELES specialize in it): It will take 5-7 years for China to establish this production. In general, the production of agricultural machinery in Russia is considered to be one of the least import-dependent, despite the difficulties that caused the market to sag in the first half of 2022.
This year, Russia is working on the development of technologies and components necessary for the industry. For example, in the summer of 2023, scientists from the K. A. Timiryazev Russian State Agrarian University-MSHA developed a new model of internal combustion engine, which has no analogues yet. Such an engine is expected to work twice as long as the engines that are now used in agricultural machinery. Agro-engineering scientists also claim that the new engine will not need to be serviced, and it will also be possible to refuse the use of lubricants.
Among the innovations, it is worth noting that Russia increasingly wants to use drones in agriculture. The Ministry of Agriculture has ordered 299 drones for 2024-2026 at a total cost of 526 million rubles, and Rosrybolovstvo (the state fishery agency) has issued a state order for 153 drones at a cost of 221.2 million rubles. According to the Ministry of Agriculture, 229 drones were used on farms in 2022.
According to the consolidated strategy for the development of the manufacturing industry, the share of domestic agricultural machinery over the next 12 years should grow by 19% - from the current 61% to 80% by 2035. And the share of exports should be at least 25% of shipments to the domestic market. In 2022, the share of exports was 9%. Products worth USD 0.3 billion were shipped to foreign markets.
Fig. 6. Forecasted dynamics of production volume of priority agricultural machinery products, 2024-2035, pcs.
Source: Consolidated Strategy for the Development of Russia's Manufacturing Industry until 2030 and for the Period until 2035 (September 9, 2023)
The Russian agricultural machinery industry is prioritizing the production of combine harvesters and forage harvesters, tractors, as well as mounted and trailed machinery. It is expected that by 2035 their total production volume will reach 86.2 thousand: 10 thousand grain harvesters, 13.5 thousand tractors, 1.2 thousand forage harvesters and 60 thousand trailed and mounted equipment.
