Farm machinery maker Siam Kubota Corporation Co (SKC) cut its 2020 revenue target by 10% as markets have been hit hard by Covid-19 and a months-long drought.
"It will be difficult to achieve our target revenue in domestic and overseas markets," said Somsak Mauthorn, senior executive vice-president.
In 2019, SKC registered total revenue of 54 billion baht, thanks to higher demand for agriculture machinery products in domestic and overseas markets. The firm believes given new market conditions, it cannot avoid a 10% decrease in 2020 revenue.
Before the spread of the coronavirus in January, SKC announced its full-year revenue will grow by 5-10% because of business expansion to multi-crop markets and the use of digital marketing.
Somsak Mauthorn, senior executive vice-president, Siam Kubota Corporation. *No photo credit*
However, Mr Somsak said lockdown measures have affected the company's business in many countries, especially curfews and prohibitions of mass gatherings.
"The company cannot run marketing campaigns like holding events to meet farmers upcountry," he said.
"A fall in agricultural production from the drought also made farmers lose purchasing power."
Rice grown in the dry season is especially hard hit by drought.
"Most Kubota products are for rice farming, but farmers cannot grow rice," Mr Somsak said.
SKC is considering a review of its 2020 investment plan after the agriculture machinery market contracted in Thailand, Cambodia, Laos, Myanmar, Vietnam, India and the Philippines.
Domestic sales make up 60% of the company's revenue and overseas 40%.
Earlier the company planned to invest 300 million baht this year for its business expansion projects.
These projects comprise the 150-million-baht Kubota Farm in Chon Buri, covering 220 rai; a 75-million-baht factory in Amata City in Rayong; and a 75-million-baht factory in Navanakhon estate in Pathum Thani.
Siam Kubota also expected to sell 38,000 tractors and 3,000 combine harvesters in 2020, with a goal to reach 60,000 units of both products by 2024.
In 2019, the company sold 35,000 tractors and 2,700 combine harvesters.
According to SKC, Covid-19 and droughts will make Thailand's agricultural machinery market in 2020 miss its target of 60-70 billion baht in sales.
Despite the unpleasant prospects, SKC will continue to focus on digital marketing and promote Smart Farmer projects by selling spare parts on its website and using more mobile applications, Mr Somsak said.
One app is Kubota Smart, which enables users to check prices and promotions, while KAS Crop Calendar helps farmers organise a rice crop calendar, manage income and expenses, and prepare summary reports of their cultivation.