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Title: 20 minutes with Ross Simpson, MD of Aitchison
Lorcan Allen speaks to Ross Simpson, managing director of the Aitchison machinery company based in Auckland, New Zealand
https://www.farmersjournal.ie/20-minutes-with-ross-simpson-md-of-aitchison-225827
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Update Success !
How is the machinery market performing right now?
In the last 18 months to two years it has been a very difficult market for machinery sales. Since August 2014, we saw a quite dramatic slowdown in sales, particularly in New Zealand. I find there is a faster move between a good market and a bad market than ever before. A slowdown in the market on one side of the world will have a greater impact on a distant market than before.
How do you compete in a global market as a machinery business exporting to distant markets?
We manufacture all our products in New Zealand but we import a lot of component parts from lower-cost manufacturing markets. A strengthening New Zealand dollar in the last year has also helped to lower input costs.
Exporting is a challenge, particularly when our products occupy quite a reasonable amount of space on a shipping container. So we tend to export more of our smaller units and our target market is mid-sized farmers.
Do you think on-farm debt levels are too high in New Zealand?
I don’t think it’s a threat to the industry as such. But it does need to be managed carefully. We’ve had some over-enthusiastic expansion here in New Zealand in recent years. Some farmers have bought marginal land and tried to turn it into dairy and that costs a lot to do that sort of work.
But I would say there is a small percentage of NZ farmers, probably about 5%, who are carrying too much debt. Then there is another 5% who are under stress but in the main 85% to 90% of NZ farmers are reasonably OK in their borrowing levels.
How has your business performed in Ireland?
We’re really a niche player in Ireland in terms of our products. Our main dealer is based in the UK, through which we sell a lot of drills and they have a supporting agent based in Ireland. Ireland as an export market has performed reasonably well for us given that we have a long way to ship our goods and we have some very loyal customers here.
Do you see any opportunities for New Zealand from Brexit?
I don’t see Brexit as an opportunity for us. We can already export to the UK tariff-free. New Zealand overall as an export facing economy has moved away from any reliance on the UK. There has been some talk of increased sheep exports to the UK but I think this is unrealistic. We’ve a lot of good markets for our sheep exports now and sheep farmers may not have the capacity to increase what we sell to the UK.
How have falling steel prices benefited your business?
Steel prices have dropped by about 15% to 20% in the last year. We’ve made a good saving on the steel we’re bringing in and it has helped us ride out some of the tougher times.
Watch: Vintage highlights from the Ploughing
Machinery trade ploughing ahead this week
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