Kubota, SMBC sign MoU to boost agricultural mechanization in Africa

AFRICA – Kubota Corporation has signed a memorandum of understanding with Sumitomo Mitsui Banking Corporation (SMBC) to form a business alliance focused on financing agricultural machinery sales in Africa.

The agreement, dated August 21, 2025, aims to support local distributors and government agencies in accessing Kubota’s tractors, harvesters, cultivators, and engines.

The partnership comes at a time when food demand across Africa is growing rapidly. Rising populations, import dependence, and geopolitical risks have increased pressure on supply chains.

Kubota President and Representative Director Yuichi Kitao said the collaboration reflects a shared commitment to improving food security on the continent.

“Many farmers in Africa still cannot access modern machinery,” Kitao explained. “By working with SMBC, we want to change that reality and make farming more efficient and productive.”

SMBC President and CEO Akihiro Fukutome emphasized the bank’s role in enabling that goal. “Our financial network and expertise will make it possible for more distributors and ministries to secure the equipment they need,” he said.

“Together, we will support mechanization as a foundation for stronger food systems in Africa.”

The alliance will run for three years starting this August. Kubota and SMBC plan to offer trade finance for local distributors importing machinery and coordinate with export credit agencies such as the Japan Bank for International Cooperation for government projects.

Other tailored financial services will be introduced to ease procurement.

Kubota has steadily increased its presence in Africa. The company opened Kubota Kenya Limited in 2017 to strengthen sales channels and later acquired Escorts Limited in India, now operating as Escorts Kubota Limited, to expand its product range and regional coverage.

SMBC, meanwhile, has built a strong footprint in African markets through its international banking operations.

Business context

This MoU comes shortly after Kubota reported weaker second quarter results for the 2025 financial year. Revenue for the six months ended June 30 dropped 7.9 percent year-on-year to ¥1,454.9 billion (US$9.86 billion).

Operating profit fell 31 percent to ¥143.0 billion (US$0.97 billion), while net profit decreased nearly 39 percent to ¥92.5 billion (US$0.63 billion).

The company pointed to a sharp decline in overseas sales, with North America down 18.4 percent, as both agricultural and residential tractor demand slowed. Construction machinery also registered a steep fall.

In contrast, domestic sales in Japan rose 8.7 percent, supported by firm rice prices. The Water and Environment division also posted revenue growth of 7.2 percent, driven by demand for ductile iron pipes and environmental equipment.

Despite the downturn, Kubota has maintained its full-year forecast, citing stable demand in key segments. Executives say the new partnership with SMBC reflects a forward-looking strategy to secure growth in emerging markets.

“Mechanization is not just about machines,” Kitao said. “It is about improving livelihoods and strengthening food security. That is why this alliance matters.”

Sign up to receive our email newsletters with the latest news updates and insights from Africa and the World HERE.