Despite widespread supply chain disruption due to the pandemic, registrations of agricultural tractors in Europe in 2021 were up 17% on 2020.  Nearly 230,000 tractors were registered across Europe in the full year 2021, the highest level for nearly a decade¹.

These are the findings in a recently-published release by CEMA, the European Agricultural Machinery Association.

In the UK, the year was a story of two halves, with an increase of 25% in the number of tractor registrations in the first six months, compared with same period in 2020. However, supply issues took their toll in the second half of 2021, with registrations only marginally higher than in 2020 and 2% below average.

Overall registrations for the year were on a par with better performing recent years – but this total could have been substantially higher without the significant supply chain issues.

CEMA notes

“It was a similar story for other types of farm equipment, with the value of orders for non-mobile machinery up 17% on 2020 but completed sales only 3% higher. The backlog of orders waiting to be delivered at the end of the year was 40% larger than a year before, having also risen at a similar rate during 2020.”

John Bolton, Head of Food & Agriculture at BNP Paribas Leasing Solutions, comments:

“The release echoes our findings – orders for tractors and agricultural equipment remain very strong but production delays are having a significant impact on delivery times. With these issues set to continue, buyers will need to think further ahead when considering their purchasing plans.”

“In addition to order backlogs, the industry is also contending with spiralling production costs. Despite these challenging conditions, demand remains buoyant and we continue to work closely with our manufacturer, dealer and broker partners to support them in delivering proactive finance solutions which help drive the industry forward.”

To read the CEMA release click here

With a sustained presence in the UK agricultural industry spanning nearly 50 years, we are proud of our deep roots and a strong heritage. Our team are looking forward to catching up with established valued partners and meeting new contacts at a number of upcoming shows including:

LAMMA 2022 4-5 May

Cereals 2022 8-9 June

Royal Highland Show 23-26 June

If you’re attending a show, please get in touch with your Account Manager or contact John Bolton john.bolton@uk.bnpparibas.com to arrange a catch up.

¹Report published by CEMA. 22^nd March 2022. For full report please see 2022-03-21-CEMA_Economic_Press_Release_Tractor_Registrations_2021.pdf (cema-agri.org). The total number of registrations may include other types of vehicles which are sometimes classified as tractors, such as quad bikes, side-by-sides, telehandlers or other equipment. Additionally, for certain countries it can include some second-hand registrations.

We are committed to your business growth.

Our competitive finance solutions can help you capitalise on new opportunities. Contact us today to discuss your needs with a member of our team.

Andy Milsom, Head of Partner Training & Development at BNP Paribas Leasing Solutions

Andy is an experienced sales and finance professional with over 25 years’ experience in sales aid leasing. Andy is widely recognised as an expert in business finance and has in recent years focused his attention on developing partner sales teams develop an understanding of how businesses secure project financing. His training programme – Finance Unlocked – is a highly rated customisable course and is offered at no cost to partners.

If you’re interested in helping your sales team overcome finance-related hurdles during the selling cycle, please get in touch with Andy on 07966 114 243 or email here.

A rapid, consumer driven reduction in the use of plastic will almost certainly result in an urgent need to maximise productivity. This means increasing or maintaining output without a corresponding increase in cost or decrease in quality. It is in the quest for improved productivity that investing in new technology becomes essential.

The use of robots that take full advantage of improving artificial intelligence are being introduced to areas of food packaging and distribution. The online grocery retailer Ocado offers an excellent example of how robots can complement humans to provide a highly efficient warehousing and logistical solution. And smart packaging involving the use of sensors within packaging is increasingly being used to monitor the state of food being stored, thereby reducing both waste and the risk to health.

A question often raised is whether it is better for food manufacturers and processors to use a bank loan or to take out some form of leasing agreement to fund the acquisition of new capital equipment.

It’s first worth exploring the fundamental difference between these two popular sources of credit. Essentially with a loan the user borrows money on pre-agreed terms to purchase the equipment required. With a lease, ownership of the equipment resides with the leasing company and payment is made for the right to use that equipment over an agreed period of time. With one type of lease, Hire Purchase, the user can take ownership once all payments have been made, but not before.

If payment for use rather than outright ownership is a favoured option, then an operating lease is likely to provide a cheaper option than a loan for the period of time the equipment is being used. This is because once an agreement ends the equipment is handed back for the leasing company to sell, and that anticipated selling price is used to reduce rental payments during the lease. Leasing companies are specialists in their chosen markets and understand fully how to re-market the equipment they finance.

A finance lease or hire purchase agreement will enable a food manufacturer or processor to have use of equipment for its full economic life.  In the case of hire purchase, ownership of the equipment will pass once all payments have been made. The sum of payments made will exceed the purchase price of the equipment and any user would need to do their own research to establish respective costs. One factor that might also need to be taken into account is that the price of a lease is fixed at the outset whereas the cost of a bank loan is normally tied to the Bank of England base rate and as such subject to change.

Factors other than cost should also be considered in deciding whether a lease or a loan is the most suitable source of credit, for instance if a user wanted an agreement that included the provision of service and maintenance as well as payments for equipment, contract hire agreements offering such a facility are often available from leasing companies.

A key question to ask before taking any decision to buy equipment using a bank credit line is whether that credit line might be needed for other purposes such as funding business expansion, acquiring another business or to finance a period of negative cash flow. If in doubt it is probably as well to take out a lease to fund capital equipment investment and keep existing credit lines fully open.

The need to increase productivity and take advantage of the raft of new technology becoming available involves acquiring new capital equipment. The good news is that leasing allows such investment to take place now whilst spreading the cost and keeping existing credit lines fully intact.

There are different types of leasing agreement available depending on user requirements as well as a high degree of flexibility with regard to terms and payment profiles. This means that just about any budget constraint can be overcome and food manufacturers and distributors provided with the funding required to achieve the necessary productivity gains.

Andy Milsom, Head of Partner Training & Development at BNP Paribas Leasing Solutions

Andy is an experienced sales and finance professional with over 25 years’ experience in sales aid leasing. Andy is widely recognised as an expert in business finance and has in recent years focused his attention on developing partner sales teams develop an understanding of how businesses secure project financing. His training programme – Finance Unlocked – is a highly rated customisable course and is offered at no cost to partners.

If you’re interested in helping your sales team overcome finance-related hurdles during the selling cycle, please get in touch with Andy on 07966 114 243 or email here.

The challenge is to move away from a reliance on plastic packaging as quickly as possible through the use of bio based and biodegradable alternatives. New types of packaging may require changes to the food manufacturing process and the introduction of new technology.

A rapid, consumer driven reduction in the use of plastic will almost certainly result in some up-front additional costs, giving the industry an urgent need to maximise productivity.  This will mean increasing or maintaining output without a corresponding increase in cost or decrease in quality. It is in the quest for improved productivity that investing in new technology becomes essential.

Robots that take advantage of artificial intelligence are being introduced to all areas of food packaging and distribution. The online grocery retailer Ocado offers an excellent example of how robots can complement humans to provide a highly efficient warehousing and logistical solution. Smart packaging, involving the use of sensors within packaging, is also increasingly being used to monitor the state of food being stored, reducing both waste and the risk to health.

The need to increase productivity and take advantage of the raft of new technology becoming available involves acquiring new capital equipment. The good news is that leasing allows investment to take place whilst spreading the cost. In this way the equipment is paid for as it pays for itself, which can give a much faster return on investment than a cash purchase. HMRC also allows the cost of leasing to be offset against tax.

Leasing provides a hedge against inflation because payments are fixed for the duration of any lease agreement, typically five years. Payments will not go up even if the Bank of England raises interest rates during the course of an agreement; not necessarily the case with a bank loan.

There are different types of leasing agreement available depending on user requirements as well as a high degree of flexibility with regard to terms and payment profiles. This means that just about any budget constraint can be overcome and food manufacturers and distributors are provided with opportunities for the essential productivity gains they need.

Andy Milsom, Head of Partner Training & Development at BNP Paribas Leasing Solutions

Andy is an experienced sales and finance professional with over 25 years’ experience in sales aid leasing. Andy is widely recognised as an expert in business finance and has in recent years focused his attention on developing partner sales teams develop an understanding of how businesses secure project financing. His training programme – Finance Unlocked – is a highly rated customisable course and is offered at no cost to partners.

If you’re interested in helping your sales team overcome finance-related hurdles during the selling cycle, please get in touch with Andy on 07966 114 243 or email here.

Investing in food and drink equipment, from production machinery to packaging and processing equipment, means businesses operating across the supply chain can improve productivity and keep up with technological advances.

The specialist division based in Basingstoke has a dedicated team headed-up by Paul Baker, Head of Food and Agriculture along with Nicky Easton and Neil Curtis who are jointly responsible for Business Development. They are supported by an experienced sales team handling incoming financing enquiries.

Jean-Michel Boyer, CEO of BNP Paribas Leasing Solutions UK, comments:

The expansion of our Agriculture division to include Food and Drink equipment finance means that we can now support businesses with their equipment needs from field to fork.

We pride ourselves on financing the real economy and we are delighted to be able to work with businesses across the agriculture supply chain including those in growing and cultivating, in food processing and packaging, in the transportation of food goods and in materials handling for the movement and processing of food products.

Digital transformation, made possible by the acquisition of new equipment through a trusted finance provider, means businesses can grow, safe in the knowledge that their costs are predictable and manageable.”

In addition to food equipment finance, BNP Paribas Leasing Solutions UK specialises in sectors including commercial vehicles, construction, healthcare, IT and telecoms and materials handling.

• 1. Asset Investment Burdens – Upkeep for Old Machines
  Too many companies keep sinking money into old pieces of machinery (read about the sunk cost fallacy if you’re into the psychology behind this). They’re using legacy equipment that needs a lot of maintenance on a monthly or annual basis. They keep shutting down lines to replace parts or fix machines when they should be producing. Meanwhile, that maintenance and repair money is taking a chunk out of their bottom line.
• 2. Lack of Productivity from New Technology
  Packaging companies are also leaving money on the table when they don’t take advantage of opportunities to upgrade to newer, faster and more sophisticated machines. New technology offers more productivity and better capacity. It offers more transparency and easier learning processes. So it’s a no-brainer for boosting productivity and increasing profits.

The food that we consume has been changing increasingly to suit a changing lifestyle. The changing dietary habits of consumers have compelled the food packaging industry to come up with new solutions.

One of the important areas of development in the industry today is food packaging equipment and machinery. Such machinery has evolved into a wide range of equipment and integrated systems to achieve a complete range of operations such as bagging, filling, wrapping, cartoning, lidding, labeling, decorating, palletizing, conveying, sealing and more.

Companies have been coming up with innovative ideas for food packaging equipment to cater to the needs of consumers, expand their market reach and survive the intense market competition.

WHAT WILL WE BE EATING IN THE FUTURE?

The way we feed ourselves in the Smart City of the future will depend on much more than just technical innovation. The huge increase in the number of city-dwellers in the coming years – the statisticians tell us that eight billion people will be living in megacities around the world in 2050 – together with the need to effectively brake global warming, while at the same time finding solutions for feeding a constantly expanding global population, are forcing us to come up with new approaches to production and consumption.

Today, a number of potential major developments provide blueprints for future food production scenarios.