FAROL and JOHN DEERE 2yrs on. | 29th May 07

In March 2004 the agricultural machinery supply industry in central south England changed quite dramatically. John Deere appointed Farol Ltd (A former Case IH dealer) to service the franchise with one dealership group of four depots from Northern Leicestershire to Southern Berkshire.

This was one of the largest retail machinery supplier changes that has ever taken place at one time in the UK and caused quite a stir throughout the industry, we asked Farol Ltd's Managing Director Matthew Vellacott to give us an update on how it's progressed. "Firstly our decision to go John Deere was not taken lightly, but the underlying fact was that we had issues with how the whole Case IH and New Holland merger was being managed and believed that the John Deere franchise that was offered to us seemed like a secure fix to Farol's future, it was especially difficult as we had amicable relations with some of the previously appointed dealerships and we were to leave the Case IH franchise on our best ever year having achieved approx £12-13 million turnover relatively profitably. This move with John Deere meant that to service the area of responsibility we had to purchase new premises near Hungerford in Berkshire and Atherstone in Warwickshire and unfortunately sell our Pewsey depot in Wiltshire. This was a huge undertaking managerially and financially however the success in our first two years trading with John Deere has definitely eased that burden. In this financial year we have so far exceeded our forecast quite significantly, all depots seem to be firing on (nearly) all cylinders, we achieved an actual £16.4 million turnover in 2005 and projected to be somewhere over £20 million with 200 new tractors sold this year.

In addition to this we have also expanded our tyre business very successfully since we bought the Agri, plant and HGV tyre dept of local firm RCP tyres in 2003, it has become a great service to our customers and Farol alike and these last 3 years we have seen turnover rise threefold taking it to what we believe to above the projected £1 million T/O this year (that's a lot of tyres!).

It has been a difficult time in the farming industry over the last few years, things have had to change, economies of scale has been a driving force to making a go of it or not, in the long-term these difficult times have been healthy to the agricultural machinery supply industry, it needed to move with the changes taking place with our customers.

I am sure that many more changes will take place over the next couple of years however there seems to be more enthusiasm about livestock and future grain prices, this will be very welcome to all because at the end of the day farming does need to survive in the UK therefore the public and supermarkets alike need to pay for it, I am looking forward to servicing UK farming for many years to come"

(Editorial from Farmers Guide August 2006)