The new DeLaval Rotary E100 system was launched in New Zealand in 2017, followed by large numbers of enquiries from both New Zealand and Australia. Otherwise Oceania experienced climatic extremes, which had a direct impact on milk production and income, affecting profitability.
In Japan there was a strong focus on automatic milking in 2017, with DeLaval gaining market share. Both DeLaval VMS™ and DeLaval Herd Navigator™ have performed very well, with customers recognising the value of accurate diagnostic tools. These products address labour shortage issues through automation, providing both reproduction accuracy and. mastitis management, which drive profitability on dairy farms. Government programmes are in place to support dairy farming in Japan, keeping the market buoyant.
In China, the number of large industrialised farms is growing, with milking facilities for 3,000 cows or more. The DeLaval InService™ All-Inclusive programme has been successfully introduced to work directly with these large farms, focusing on milk quality, milking routines and cow health.
Russia experienced considerable growth with large farms adopting the DeLaval PR3100 heavy-duty rotary for herds of 2,500 cows and upwards. The combination of our unique project management approach and advisory support services are highly appreciated there.
In the Middle East/North Africa region, political instability and an overall fragile economic situation contributed to weak market conditions. Despite this, some markets, such as Egypt, performed well with large tenders being signed.
In many European markets there was strong pressure on milk demand and milk production in 2017. The challenge was to obtain the right quality and DeLaval was proactive in offering services that address milk quality and animal health.
Benelux, primarily the Netherlands, was directly affected by new phosphate regulations, requiring creative solutions to the situation. The financial situation of many farmers in France was difficult after the crisis of 2016/2017. But in general, milk price and feed price conditions were favourable in several regions, including Northern and Eastern Europe as well as Germany.
DeLaval experienced stronger aftermarket sales for original parts, an indicator that our service level performance is positive. Within the farm supply business, the hot summer season impacted ventilation sales positively and innovations to our LED lighting range boosted sales in this area as well.
Many large farms in North and South America invested in high-efficiency rotary milking systems, such as the DeLaval PR3100, and DeLaval VMS™ automatic milking systems. There was robust development of the installed parks of DeLaval VMS™ in both of these regions, with some of the largest robotic milking systems in the world to start milking in 2018. The deployment of service contracts for DeLaval VMS™ has been successful. There were favourable growth opportunities for DeLaval Cleaning Solutions in North America, as well as investment rounds in Cuban dairy value chains.
There was new concern about the lack of milk processing capacity in certain US states, in addition to the pressure on milk prices going into 2018. Another factor causing uncertainty is the future of the NAFTA negotiations and how this could impact both the North and South American markets.