Siam Kubota plans THB1.4-bn outlay amid positive outlook for Thai agriculture

Siam Kubota, whose products include tractors, combine harvesters, and other farming machines, also intends to manufacture new agricultural machinery under the investment plan, company president Junji Ota said.

The plan follows modest operating revenue of 58 billion baht last year, down from 63 billion baht in 2022. Thailand's drought crisis was blamed for the decline in overall demand for Siam Kubota products.

In a media briefing on Friday at its largest tractor manufacturing plant in Chonburi province, Ota revealed that around 40% of the 1.4-billion-baht investment budget would be allocated to expanding production lines.

The remaining amount will be divided among three goals: operational upgrades with an automation system, energy efficiency as part of its Environment, Social and Governance (ESG) target, and information technology development for overall backend operations and customer services.

Citing the current positive outlook for Thailand's farming and crop cultivation, as well as the recovery in its export markets, Ota expects 60 billion baht in sales this year.

"There was a silver lining from the increased domestic sales of rice transplanters in areas practising off-season rice cultivation and a growing market for excavators due to increased exports of durian," he said.

Ota was confident that the growth trends in agriculture would result in increased demand for machinery products in a sector where the number of workers was already declining.

In addition, Siam Kubota intended to export new products designed to support agricultural sector growth in countries other than Thailand, such as Cambodia, Vietnam, the Philippines, and Laos, he said.

The company is developing a data-driven system to support and optimise sales and marketing support, as well as raise service standards to ensure a positive Kubota experience for customers in Thailand and its export countries, particularly Cambodia and Laos, he said.

"Siam Kubota will continue to pursue Kubota Corporation's policy of establishing Kubota as a Global Major Brand by 2030," he said.

To align with that goal, Ota said that Siam Kubota aims to develop products and innovations in two key areas: improving production efficiency and food safety through smart agriculture, and achieving carbon neutrality in products to meet future demand for low-carbon agriculture.

As an example, he cited a plan to increase the production capacity of hay balers used in the post-harvest process of zero-burning rice farming, which would reduce carbon emissions.

"The development would help raise the competitiveness of Thai agricultural products," he said, adding that Siam Kubota would keep developing innovative solutions to create a rice and field crops cultivation model.

In keeping with the electric vehicle (EV) trend, he said the company had already implemented EV technologies such as electric tractors.

However, the model was being used only on its pilot farms.

"EV tractors and agricultural machinery are still in the development process due to some pain points like battery duration, which is insufficient for field work, charging stations, and prices," he explained.

The company was trying to overcome these barriers and also researching alternative options such as nitrogen, he revealed.

As studies have shown a good level of crop pricing in rice, sugarcane, field corn and cassava this year, Siam Kubota senior executive vice president Waraporn Osathapan said the group's business direction for 2024 would focus more on developing, sourcing and expanding the use of agricultural machinery that met the needs of new customer segments.

To support the Thai government's smart farming policies, she said Siam Kubota would continue to work with public agencies to apply and implement Siam Kubota's machinery and solutions that are most appropriate for Thai farmers in terms of cost, work force, environment, and readiness.

"Smart farming involves not only advanced technologies, but also innovative processes that are appropriate for farmers' conditions. We need to consider what farmers already have and start implementing smart farming based on those factors," she explained.

Currently, she said Siam Kubota had initiated a number of projects in collaboration with government agencies, private organisations, and educational institutions across the country to generate ideas for farmers.

She highlighted its RACE strategy:

• Retain leadership by maintaining existing customers.
• Accelerate growth by increasing the use of machinery and implements for all stages of crop cultivation, including field and horticultural crops.
• Climate change refers to the company's ability to help farmers adapt to changing environmental conditions through eco-friendly farming practices and solutions such as water management in plantations, digital farm management tools for productivity optimisation, and cost reduction.
• ESG for sustainability promotes and supports farmers' sustainable livelihoods while also encouraging them to increase their income.

Phisanu Milintanuch, Siam Kubota's executive vice president and general manager of sales, revealed two major campaigns.
The goal, he said, was to boost farmer confidence in Siam Kubota's products and after-sales services while also increasing demand in Thailand's farming machinery market.

Aside from the marketing campaign, he said the company continues to improve its operations and services.

"In terms of services, the emphasis will remain on providing an exceptional customer experience, making appointment scheduling simple, and providing prompt troubleshooting assistance. In terms of spare parts, a data-driven system will be used to connect factories, parts suppliers, and manufacturers, allowing them to track production capacity and understand customers' parts requirements at different times," he explained.

Additionally, Siam Kubota will launch a data-driven dealer development programme to improve the capabilities of its dealerships, he said.