KUBOTA
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KUBOTA
This content was paid for by Kubota and produced in partnership with the Financial Times Commercial department.

The agriculture industry is in a period of transformation. Technological advances in recent decades mean farming is more productive, yields are higher and harvesting is more efficient than ever.

Now, farmers are embracing connectivity, robotics, sensors and other technologies to bring the industry into a new era that can build resilience and sustainability and tackle rising food insecurity worldwide. 

Innovations being deployed by farms include autonomous rice transplanters, which form perfect rows of seedlings in paddies with water levels remotely managed by IoT. AI provides the optimum water and fertiliser levels for crops in greenhouses, while imaging sensors guide robotic arms to pick out ripe strawberries.

A device being developed by Kubota to enable image analysis of agricultural products during cultivation.

These are only a few recent innovations being employed by farmers worldwide. And they are all from Kubota Corporation, a Japanese company that is providing a cornucopia of solutions for global challenges in food, water and the environment.

“I believe an agricultural revolution is occurring right now,” says Dai Watanabe, Kubota’s director and senior managing executive officer. “It is driven by a need to achieve farming that minimises its environmental footprint and to raise productivity, even as land and water for farming decreases while food demand increases.”

By 2050, the world needs to close a “food gap” of 56 per cent between the amount of food available today and that required by an estimated population of 9.8 billion people. That is also the year by which many countries and companies have pledged to reach carbon neutrality. To achieve this, agriculture’s sizeable carbon footprint, estimated to be 23 per cent of total greenhouse gas emissions, must be tackled.

Reducing the environmental impact of farming is an important mission for Kubota. Reducing the environmental impact of farming is an important mission for Kubota.

Under these imperatives, farmers will also have to minimise the use of precious resources, particularly water, and reduce waste and pollutants while conserving biodiversity. While the ongoing agricultural revolution is global, future innovations must be localised, because most food-growing will remain rooted in specific local conditions of soil, climate and culture.

“To meet these challenges, our mission is to contribute to the realisation of sustainable agriculture, combining AI, robotics, sensors and other technologies,” says Watanabe.

Rooted in social value

Established as a foundry in 1890, Kubota was the first Japanese company to successfully mass-produce iron pipes and support the country’s waterworks infrastructure, eventually helping to end a devastating outbreak of cholera.

Faced with post-war food shortages, the company pioneered agricultural machines suited for rice paddies. Adopting these labour-saving tools enabled workers from Japan’s farming households to move to cities, fuelling the country’s economic boom. When this rapid development generated pollution, Kubota responded in the 1960s by entering the water-treatment business. 

The company’s impact now extends far beyond Japan and recent earnings reflect this. 

For the financial results ended in December 2021, the company marked record revenues of ¥2,196bn, of which 72.6 per cent was generated overseas and 85 per cent from the sales of agricultural and construction machinery.

Kubota’s sales have doubled in 10 years, with sales outside Japan comprising 70 per cent of total.
Overseas expansion

Over the years, the company has adapted solutions developed in Japan for foreign markets. For example, its light and durable tractors for rice-paddy farming have evolved into compact tractors for the US and European markets. Now Kubota is the leading provider of various versatile machines used in areas such as estate maintenance, commercial landscaping and orchard management.

Similarly, its mini backhoes and compact truck loaders, well-suited for small construction and civil engineering projects in dense urban settings, have captured leading market shares in Europe and the US.

In Asean, Kubota has consolidated its position as a first mover in rice-cultivation machinery. It is working to recreate its market success in Thailand, where it retains an 80 per cent market share for tractors, in other rice-growing countries such as Cambodia, Laos, Vietnam, Indonesia, Myanmar and the Philippines. These six countries combined have cultivated areas for rice four times greater than Thailand and are approaching GDP levels where the mechanisation of agriculture is expected to accelerate.

A Kubota tractor in Myanmar. Its tractors are highly valued across south-east Asia, a key rice-growing region. A Kubota tractor in Myanmar. Its tractors are highly valued across south-east Asia, a key rice-growing region.

Kubota aims to go beyond its core business of rice paddy and compact tractors to the more heavy-duty, multi-purpose tractors used in dryland farming for grains, vegetables and pastures. 

Dryland farming is a method of farming in semi-arid areas without the aid of irrigation. Drylands cover approximately 40 per cent of the world’s land area, and dryland farming represents nine times the global cultivated land area of rice farming.

A critical market for this expansion is India, the largest tractor market in the world. In April of this year, Kubota acquired a majority stake in India’s fourth-largest tractor company, Escorts Limited. It hopes to generate synergies with Escorts’ frugal engineering expertise to expand its share of the growing Indian market and produce exports for the basic tractor market worldwide.

Partnerships as the way forward

Exporting hardware, however, is only one pillar of Kubota’s grand design. The firm has set out a long-term vision called Global Major Brand 2030, designed to generate significant contributions to solving global food problems.

Aside from developing smart agricultural technology, the company is moving to create data platforms that enable sharing and partnerships across stakeholders.

To accelerate next-generation solutions, Kubota has partnered with a slate of start-ups and research institutes. In recent years, the firm has also opened new R&D centres in Europe, the US and Asia.

An orchard in the Netherlands where Kubota’s Innovation Center Europe (ICE) is promoting open innovation for European agricultural production. An orchard in the Netherlands where Kubota’s Innovation Center Europe (ICE) is promoting open innovation for European agricultural production.

“Rather than the current top-down Japan-centred export model, we wish to shift to a more ‘glocalised’ model, where local branches capture local needs,” says Watanabe. “[This means] they can deliver solutions on their own, with Japan acting as a supporting global headquarters.” 

Underpinning Kubota’s strategies for growth is the firm’s longstanding objective to solve social and environmental issues. Kubota’s ESG strategy identifies three focus areas: enhancing productivity and safety of food; promoting the circulation of water resources and waste; and improving urban living environments — while mitigating and adapting to climate change. 

Consequently, the company’s portfolio is full of already established and future technologies for sustainability. They include smart and precise farming tools to reduce resource use and maximise yields, construction and agricultural machinery driven by electric motors, biofuels such as green LPG and green hydrogen and resource circulation technology.

Kubota has recently announced an additional ¥100bn to be added to its overall ¥400bn R&D budget for 2025. These funds will enhance research and development into the challenge of achieving a carbon-neutral society. 

“We continue to tackle societal issues through our innovations and partnerships as we have in the past,” says Watanabe. “By building on our founding DNA of 130 years — which is not just to produce superior technology, but technology that benefits all of society — we hope to become an ‘Essentials Innovator for Supporting Life.”

To achieve this aim, the company has developed a strategy for its agricultural business that clarifies its vision and solutions. To find fresh ways to contribute to society, Watanabe explains, Kubota must now combine internal R&D with external collaboration. 

“We have a proud history of contributing to the mechanisation and modernisation of agriculture,” says Watanabe. “We hope to build on this to expand our business and further our social value.” 

With solutions to improve the efficiency and resilience of global food production, Kubota is finding ways to tackle food insecurity. With solutions to improve the efficiency and resilience of global food production, Kubota is finding ways to tackle food insecurity.