Prepared by “ZERNO” magazine
We shouldn’t miss out on the global machinery boom — after all, it’s a sign that agriculture worldwide is actively restructuring and modernizing.
Interview by Yurii Honcharenko
“Agro-Building Alliance ‘Astra’” is one of the largest suppliers and service operators of agricultural machinery in Ukraine. But CEO Ihor Hubariev is convinced that today, what matters most is selling farmers the main thing — iron-clad optimism.
The strong will grow stronger
– Clients who call you tell me your guys are working like psychoanalysts these days.
– Yes, they tell everyone “everything will be fine.” Everyone needs a dose of optimism right now. But we ourselves see wonderful examples of real, working optimism among our clients too. There are farms not far at all from the front line, where people are trying not just to hold on, but to grow. They believe now is exactly the time to move fast and grow.
– And what are they buying from you under these conditions?
– Tractors, tillage equipment. Although the company I’m talking about already had decent machinery, the owner is optimistic and wants to keep moving forward. That kind of approach is encouraging.
So our farm owners are doing alright. Of course, they’re always worried — about the weather, about prices, always something. But always.
– But this year they’ve got not just bad weather or low prices, but bad weather, low prices, and a war…
– We’re seeing a certain stratification. There are farmers who ran their operation without a system, relying on emotional decisions. They’re not doing so well right now. But those who developed confidently and steadily before will only become stronger: nearby, people are “falling apart,” wanting to sell their land, their farm, and that – that’s the time for a new stage of growth.
Some say you simply can’t survive on growing crops alone, so you need to diversify: livestock, fish, processing. Living off growing crops alone already carries very high risks. You need to actively look for ways to increase added value.
Of course, everyone – is under difficult conditions and constant challenges. Even with staffing, drafting: reservations don’t always work, specialists get mobilized. We also lose people every month.
– Is your family safe?
– My family is in Kyiv, with me. They made that decision, and I supported them.
– How are you personally feeling about when the war will end?
– I think we’ll still be fighting next year. There’s a sense that we can expect victory closer to October-November 2023.
A long-term shortage
– How has your machinery lineup changed compared with before the war?
– In the first half of 2022 we were delivering machinery that had already been contracted back in autumn 2021. So we’re only now entering this new situation. We fulfilled our contracts, although there were difficulties with suppliers. Sometimes we had to give clients substitute machinery for the period until their order arrived. Right now, contracting for 2023 is underway, but, of course, we’re behind schedule – either agricultural produce prices are off, or logistics are disrupted. So most clients are taking a wait-and-see approach. So far we’re at about 30% of pre-war contracting pace, but we’re hoping for increased activity in December. Three factors affect a farm’s investment mood – produce prices, yield, rising production costs. But the serious farmers we talk to count on still coming out ahead, not in the red.
On the other hand, suppliers have seen there’s no catastrophe in Ukraine, so they’re protecting machinery-production quotas for Ukraine for 2023.
– When I spoke with BERTHOUD representatives recently, they told me: there are more orders than the factories are able to produce. Will you manage to meet demand?
– A machinery shortage became especially acute back in 2021, and this year the trend continued. In Europe, unlike here, rising agricultural produce prices and a demand boom for machinery are layering on top of existing supply-chain problems and overloaded factory production capacity. So every market is now quota-limited, restricting the ability to place production orders.
But we still try to find machinery even beyond quotas from dealers in other countries, to get ahead of the curve, and try to buy earlier. And, as I mentioned, we work with clients using substitute machinery, so we don’t lose clients and contracts.
For 2023, some manufacturers are no longer accepting orders for the first 3 quarters. For Horsh and MANITOU machinery, orders for 2023 were placed back in early 2021. The situation with Fendt is better. The manufacturer took a proactive stance, showing maximum support for our country after the war began. Available quotas shrank for every market, but for Ukraine they stayed largely unchanged. Although we did have situations with shifted production timelines, that affected every market.
Tractors of the year
– Perhaps the season’s hottest new arrival is the seventh generation of Fendt’s 700 series. When will these tractors reach Ukraine?
– As early as this spring, in February-March. This is Tractor of the Year in Europe, overall. Basically, the Fendt 700 Vario has always been the most popular series among European farmers.
We didn’t sell them all that widely, since the main tractor for Ukraine is still in the 300-400 hp range. It’s exactly that class that pulls the equipment that dominates the market. Our segment of not-very-large farmers isn’t very developed yet. And they’re not quite ready yet to invest in higher-class machinery.
This tractor rightfully holds a top position in the market, but the level of Ukraine’s smaller farmers hasn’t yet risen high enough, either in terms of accumulated earnings or in their approach to long-term planning for their own farm’s development. I see a lot of potential here, but it will come with time.
– Why do people in Ukraine buy Fendt at all? The choice out there is huge.
– Over the past few years Fendt has held around 35% market share in the power segments and regions where Astra operates. That’s a pretty solid achievement in a highly competitive market.
Why do they buy it? For a customer, what matters is which partner they’re working with, and how the machinery will be serviced afterward. We’ve been in the market a long time, we have our clients’ trust, and we’re always ready to support and keep the machinery running.
Farms that already own Fendt tractors give good recommendations. Significant fuel savings and better field-work productivity can be seen and calculated during operation on your own farm. And good reviews and recommendations from fellow farmers are the best argument for farmers when buying machinery.
Within AGCO Corporation, Fendt is the innovative brand. This machinery embodies the latest engineering solutions and uses the most advanced technology available.
Many agroholdings run Fendt tractors. They’re satisfied. They also like how we then service the machinery, taking a lot of the headache off the client’s hands. We have a large service team, large spare-parts warehouses, and we’re attentive to client requests and needs. We work to stay ahead of the curve.
We’re preparing for possible stagnation in the machinery sales market next year – we’re working on expanding our service team specifically, and we’re planning to increase our spare-parts stock.
– In your opinion, which tractor could be called Machine of the Year in Ukraine?
– If you go by units sold and reputation, I’d name two. John Deere and Fendt. John Deere is basically our main competitor, and it’s great that we have such a strong rival – that’s what drives progress.
How to save by spending more
We also talked about the new Fendt with Leonid Kulyk, head of product marketing at “ABA ASTRA.”
– I saw the new 700-series Fendt recently at the post-Covid SIMA show. What’s fundamentally new about this machine?
– Fendt started building an entirely new, especially efficient, high-performance line of machines back in 2017 – starting with the 1000 series, at 400 to 500 hp. It was in this series that they first used the MAN engine, which runs at 25% lower revs, improving service life and fuel economy. A new Vario Drive transmission concept was introduced too.
After this debut, the innovations were carried over to the 900 series, which covers the 300 to 415 hp power segment. We started supplying the updated 900 series to Ukraine from 2019, with peak sales in 2020.
Fendt keeps carrying this strategy over to other series, and this year it’s the updated 700 series’ turn. A new engine, new transmission, a new exterior look. Besides the new features, the machine has gained power too. Where the 700 series used to top out at 240 hp, it now goes up to 280 hp.
– You watch tractors constantly evolving, changing, developing. But it seems that for a while now, manufacturers have been moving in the direction of marketing – everyone talks about some incredible cabin, how convenient everything is made for people. It seems there are no more fundamental engineering solutions. What does the picture look like now, when resources and energy carriers keep getting more expensive everywhere? Does machinery keep pace with today’s needs?
– Yes, you can see work aimed at marketing. But some are also fighting to find genuinely new solutions. Speaking of Fendt, that means technology that reduces fuel consumption. No other tractor manufacturer offers anything like it.
After all, a low-rev engine completes fewer cycles per unit of time, which, accordingly, means fuel savings. There’s friction during operation. Fewer cycles also means longer service life. And lower revs don’t come at the cost of power. Right now, this is a sophisticated mechanism that operates with a kind of “tractor intelligence” – the latest fuel and air delivery system, innovative control systems.
In practice, the fuel difference is 5 to 10%. As for service life, it’s still hard to say – we haven’t had a single engine like this in for repair yet.
– When did the first Fendt tractors arrive in Ukraine?
– In 1995 or 1997, “Nibulon” bought a batch of 40 or 50 tractors. And they’re still working today! “Astra” became Fendt’s official distributor in 2005.
– When the first Fendt tractors appeared on our market, I noticed they were mostly bought by people who loved Mercedes and Rolls-Royces. And Fendt was positioned as the “Mercedes of tractors.” I saw that as a bit of showing off. But when I saw, for example, that Semen Antonets bought a Fendt, when I saw this machinery in the hands of real, serious farm owners, I started analyzing more deeply the tractor’s actual practical qualities and its advantages compared to its closest competitors. It’s clear it has advantages. As well as drawbacks – a high price. In your view: does someone who buys a Fendt end up spending more overall than someone who buys, say, a Case?
– They save more, by spending more upfront. Why? Let’s start with Fendt’s drawback, the higher price. Here you’re not overpaying for the brand, but for every solution you might need tomorrow. And today you’re not even thinking about them yet!
Some, when making a decision, focus on power figures, looking for the cheapest machine in the class. But why is Fendt more expensive? It’s supplied to Ukraine in standard trim, fitted with solutions other manufacturers don’t offer.
For example, independent front-axle suspension. No other manufacturer offers tractors with this solution. That, of course, costs more. Some think it only affects operator comfort. But we pay a hired worker, so they can put up with it. In reality, though, this is one of those solutions that affects the tractor’s productivity, and how well technological operations get done. The machine can move across the field at higher speed, and the operator can also work at a faster pace.
This solution provides constant, reliable wheel-to-soil grip. It also affects fuel efficiency, cutting fuel costs, since it significantly reduces wheel slip.
Another example – a split hydraulic system. Why is that needed? The advantage you get is being able to remount additional implements regardless of which tractor that implement previously worked with. On most tractors on the market the hydraulic system is combined, and when you hitch up a towed implement, you need to figure out what oil is in there, what the parameters are… Fendt lets you skip wasting time on that.
Even in base trim, Fendt always has a pneumatic system. Other tractors don’t have this. This lets you work with matching towed equipment fitted with pneumatic systems, and lets you carry out field servicing of the tractor, in particular blowing out the engine in the field, topping up tire pressure, and so on.
Tractor weight. Where ordinary tractors in the 350 hp class weigh 14-14.5 tonnes, up to 15 tonnes at most, a Fendt has always weighed 15.5 t. Weight ensures better grip with the soil.
To a large extent, a machine’s productivity also depends on operator comfort. Fendt always thinks about the workplace – it’s a priority here.
There are many more solutions like this. Today these are tractors that will meet tomorrow’s requirements.
