Farm machinery maker Siam Kubota Corporation (SKC) has maintained its 2018 sales outlook at 10% growth to 56 billion baht even as it only grew slightly in the first half.
The company's domestic and overseas sales totalled 25 billion baht in the first half, up 2% year-on-year.
The growth was attributed to Asean's agricultural machinery market, said president Hiroto Kimura.
"In the first half of this year, the domestic market posted sales of 14.5 billion baht, while the export market posted 10.5 billion," he said.
But SKC is confident in its outlook for this half because farm product prices are expected to perform very well, like rice, palm oil and rubber, which will increase farmers' income.
Moreover, the rainy season will bring the overall agriculture sector to a healthy level, with government efforts at water management expected to mitigate potentially disastrous flooding, he said.
Mr Kimura said 60% of the firm's revenue in the first half came from the domestic market, and the rest came from abroad, including Cambodia, Laos, Myanmar, Vietnam and India.
That ratio is expected at 55% for the full year.
"Those countries have registered high demand for farm machinery as they are also agricultural countries like Thailand, while farm product prices are increasing as well," he said.
"In next five years, SKC expects its foreign-domestic revenue share to be 50:50.
Mr Kimura forecasts the Thai tractor market will stay at 35,000 units and the combine harvester market will be 3,500 units.
The overall agricultural machinery market in 2018 is expected to increase by 4-5% to 40-50 billion baht.
Founded in 2010, SKC is a 60:40 joint venture between Kubota Corporation and Siam Cement Group.
SKC operates factories in Nava Nakorn Industrial Park and Chon Buri's Amata Nakorn Industrial Estate, with annual production of 240,000 and 80,000 units, respectively.
The Nava Nakorn factory normally produces diesel engines and power tillers, and also serves as the site for Kubota's parts distribution centre and R&D hub for Asean.
Tractors and combine harvesters are made at the Amata Nakorn facility.
SKC has 74 dealers spanning 200 branches nationwide.
SKC has prepared an investment budget of 4 billion baht, including production improvement, R&D and marketing in a bid to stimulate the local market.
Separately, SKC is investing 150 million baht to develop its 220 rai Kubota farm in Chon Buri to educate customers and give them modern farming experience.
Modern farming increasingly relies on technology, pushing SKC to develop cutting-edge farming machinery for precision agriculture.
That has prompted the introduction of the Global Navigation Satellite System into Kubota farming machinery and the use of digital technology to measure improvements in agricultural efficiency.
Kubota farm is expected to be completed by 2020.