Australian Pressurised Irrigation Systems Market
Aug 17 2015
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As a major exporter of food products, the agriculture industry is a significant contributor to the Australian economy. For the industry to function in a consistent and predictable manner in Australia's harsh and volatile climate, irrigation is a critical success factor. Irrigation is also an ubiquitous feature in Australia's urban landscape, ensuring the upkeep of houses, commercial landscapes, parks, and sports fields. This market is served by a wide range of both foreign and domestic companies, offering an even wider range of products and services.
The Australian irrigation industry faces significant challenges arising from climate variability, changes to water policy, reduced water availability, and increased demands from the agriculture sector to raise productivity. While the use of irrigation systems spans both the urban and rural markets, major shifts in the industry are typically dependent on changes to the agriculture market in Australia. As such, expenditure on irrigation systems tends to be cyclical, depending on capital availability for investment in the agriculture sector.
However, growth over the medium term is likely to provide significant opportunities for irrigation systems suppliers. Consolidation, of both customers and suppliers, is also expected to drive demand for more efficient irrigation solutions. In the past, water scarcity drove the move towards pressurised irrigation systems, as they are typically far more water-efficient than their gravity dependent counterparts. However, rising energy costs have somewhat reduced their attractiveness to the average farmer, who now has to assess the cost-benefit of using such systems in greater detail.
The market for pressurised irrigation systems as well as their constituent components is highly concentrated at each product segment level, with a small number of Tier I companies holding the majority of the market share in their respective segments. This trend is further strengthened by on-going mergers and acquisitions in this market.
However, despite their commanding market share, major suppliers to this industry rely almost exclusively on irrigation dealership networks to distribute their products to end customers. Given the large geographic coverage required in the Australian market, dealers are able to leverage their local presence to develop and maintain key relationships with end users.
Technology shifts in this market tend to be incremental, focused largely on improved water and energy efficiency. However breakthroughs in adjacent technologies, such as genetically modified water-efficient crops and the use of polymers to reduce solar evaporation and seepage, are expected to have an impact on this market over the long term.
Irrigation automation, control, and monitoring solutions are expected to become ubiquitous in the modern farm over the long term, driven both by the rise of a new generation of tech-savvy farmers, as well as the reduction in cost for sensing technologies. The challenging climate and terrain in Australia have helped make the country an ideal development base for these solutions, evidenced by the fact that the market leaders for these solutions are mainly local companies.
Please note the report is in PPT format.
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