Bavaria-based Horsch Maschinen, a leading global manufacturer of innovative agricultural technology and modern solutions for soil cultivation, seeding and plant protection, stands firm in the post-pandemic environment, ready to meet the increasing demand.
Horsch Maschinen is a first-generation family business that has grown from nothing up to a global position. Company CEO Philipp Horsch explains that right from the beginning, the business was driven by a passion for farming and the pursuit of innovative solutions for the customer.
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“The origins of the company lie not in engineering but in farming. In addition to running a machine business, we are also farmers, which gives us a unique advantage as we really understand our customers and their needs.”
Speaking of the business’s beginnings, he says that while his three brothers remain active in
farming, he himself stuck with his eldest brother Michael and took a different route – one leading to a manufacturing business.
Unlike other farmers, no-till farming has always been part of the Horsch family, he explains. “In the 1980s, farming without a plough was unthinkable and the accepted general rule was that farming without the regular use of a plough would not work.”
“The Horsch family saw this differently and a dynamic developed to look for alternative approaches. The business really started from scratch in our farm workshops in 1980s where Michael worked on a no-till seed drill that allowed the plac-
ing of seed under straw residues. “
The final product of this development stage was the Seed-Exactor and it did not take long before interest in the machine grew beyond the Horsch family. Thus, the seed of Horsch
Maschinen GmbH was planted, a company that was to become a global manufacturer of agricultural equipment with production sites on three continents.
Mr Horsch points out that after two decades of hard work, test-
ing the market and building a customer base, the business seriously took off. “From 2000 onwards, we kept growing at high speed. In fact, we are the fastest-growing company ever in the history of the farming sector worldwide. The figures
say it all – over the last 20 years we have grown 35-fold.”
When asked about the key drivers of this impressive growth, he is quite clear. “Definitely the strong family basis. Multiple family
members working together, and working together well. That has been by far the most important element. And that is an element we are trying to implant in the next generation, the majority of whom have a deep interest in the business, and
whom we are slowly bringing in to it. There are 13 children that have grown up with the business, most of them keen on continuing the family legacy.”
There have been other factors, he continues, such as a true 100% customer focus.
“Given our farming background, we are extremely close to our customer base. All family members (Michael and his wife Cornelia, Traugott, Theo and myself) spend in total several 100 days per year physically visiting our customers, the
farmers, debating their needs and demands. There’s no other company of our size around the world in this business where the management would do that to this extent. Not a single other one.”
“And last but not least, speed is also an important factor. We like to move fast in any respect, to develop fast, to have things done quickly with passion etc…. Our global expansion is a testament to this passion and this speedy development.”
Worldwide footing
Today Horsch employs 2,600 people and runs six production sites: three in Germany, one in the United States, one
in Russia and one in Brazil. The latter is the company’s youngest market, but a highly promising one, where Horsch is currently investing 60 million euros – the largest single investment in its history – in a brand-new manufacturing site.
“Brazil, where we have been active for several years, has the potential of becoming our largest single market, and we could soon see ourselves employing 1,000 people there.”
In addition, the company is globally investing another 90 million euros in increased capacity in its premises, with a view to potentially doubling turnover.
“This exceptional
to develop fast, to have things done quickly with passion etc. EXECUTIVE INSIGHT MAGAZINE I FALL 2022
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growth over the last two decades could not have been achieved without our extremely dedicated workforce, most of whom are willing to go the extra mile every day,” Mr Horsch points out.
“The same goes for our suppliers. We could not have achieved this steep, continued growth without very, very good partners at our side. We have always tried to establish long-term relationships with our suppliers, and look for ways to benefit each other and grow together. In the end this approach builds very strong relationships that over the years may even turn into friendships.”
Being close to its customers is a philosophy the company applies to all its market, near and far. Philipp Horsch explains that unlike other machinery manufacturers who typically run a dealer network, with customer communications running on a linear basis, Horsch has established a triangular relationship, meaning that all three stakeholders - the manufacturer, the dealer and the farmercan always connect with each other if needed.
“We have introduced this structure in all our regions. Our service personnel can assist the dealer and work parallel with the customer. Through that
strategy, we definitely provide a better service. A direct customer relationship is what really kicked off the start of our company, and it remains a part of our DNA. We stay close to the farmer, we listen to him, we understand him, and together we move forward.”
Naturally, the product has to be right as well, he adds. Today Horsch has a comprehensive offering of machines that include technology for seeding, tillage, crop care, fertilising, spraying and many more.
“Agricultural production is very diverse and heterogeneous across the world, resulting in an incredibly large product mix. We produce around 10,000 machines a year, categorised into over 200 product families. Managing the production, sales and after sales services of this large variety of different products is one of our key competences.”
“Digitisation is a great help in achieving this of course, and some aspects of it are applied in the product themselves. Connectivity has been one of the focuses of our product development, making sure that all our products can be connected to the cloud. That has
now been achieved.”
Although market conditions and farming practices differ significantly from country to country, Mr Horsch affirms that getting a proper understanding of individual circumstances and diverse demands is the very basis of moving forward. “Market understanding is our key strength, driving innovation forward. We are learning quickly. We are farmers ourselves, we bring new technologies into certain regions.”
Speaking about prospective developments, he affirms that the agricultural sector has been experiencing a boom. The global pandemic has not stopped this trend but further accentuated it.
“For the last two decades, consumption of grains has been growing at a rate of 50 million tonnes a year. While the farming sector has so far been able to keep up with this growth and satisfy the demand, it is slowly coming to an end.”
“We are now entering a period of general food production scarcity, further amplified by unstable weather due
to climate change. One of the ways to handle this challenge is to intensify farming – hence the farming sector has been investing greatly and – over the last few years – has been experiencing steep growth on a global scale.”
“This is of course positive for companies like ours but it has a downside too – to keep up with this previously unseen level of demand has become a struggle. We are now filling our order books for 2024 as we are completely sold out for 2023. A situation never experienced before. Therefore, we are busily investing in capacity, in people, and in premises as fast as possible.
Feeding the world However, that is not without its challenges, he admits. Like most sectors of industry, agriculture suffers from staff shortages, an issue that is expected to get worse. “The human resources shortage has become the most critical topic, for now as well as for the future. Demographic development is against us. In Germany alone, within the next 10 years, there will be a 7 million people reduced workforce available,
since the baby boomers will be entering retirement, and this number cannot be replaced as the young people simply aren’t there, nor will they be in the future.”
“This year, for the first time in our history, staff is a limiter to our output. It is not the capacity, the product or markets but a lack of people. Of course, we are trying to address this by various initiatives such as an expanded apprenticeship programme, reducing shift work and introducing flexible work schemes. But the staff shortage remains our biggest concern for the future.”
Despite this, Mr Horsch concludes on a positive note, insisting that demand is set to continue, as the farming sector remains system-critical for a growing population, and Horsch Maschinen will make best use of that development. “Food is the most important thing. We are responsible for feeding the world, and doing so in a sustainable manner to preserve our living environment. Horsch operates in a sector that is growing and this will remain so in the years to come.”
