History sometimes seems like a parade of serendipity—Columbus bumped into the Caribbean Islands on his way to Asia, Becquerel left uranium crystals and photographic plates in a drawer, Fleming returned from vacation to find penicillin growing in a petri dish. John Deere’s arrival in South Africa may not have been as consequential as any of those discoveries, but it was as serendipitous.
In 1878, a ship carrying two John Deere Prairie Queen walking plows foundered. But the plows were recovered and then sold at auction to George Knott of Botha’s Post, Victoria East, South Africa.
And that’s how John Deere equipment was introduced to Africa. Serendipity.
It wasn’t until some 40 years later, though, that John Deere established a firm beachhead on the world’s second largest continent. In the 1920s, Johannesburg-based importer Dunell Ebden & Co handled Deere equipment. However, by 1930, the company was nearly bankrupt and unable to meet its financial commitments to Deere.
Dunell proposed that John Deere buy stock in the company to stave off bankruptcy. John Deere purchased stock valued at $340,000 (about $5 million in today’s dollars), which, along with the John Deere equipment already in South Africa, gave the company 50 percent ownership of the importer. The deal made John Deere one of the few U.S. companies doing business in South Africa at the time.
Bucking global headwinds
In 1932, with economic conditions still worsening in what would later become known as the Great Depression, John Deere was looking for growth opportunities outside the U.S. The company sent H.P. Carver, division sales manager in the Export Department, to South Africa to visit farm equipment dealers. Carver’s report on this trip was encouraging, and a handful of Deere leaders, including President Charles Deere Wiman, invested their own money in additional shares of Dunell. The investment gave them the dealer franchise for all of South Africa and Southwest Africa.
Toward the end of the decade, unemployment in the U.S., although beginning to decline, still was above 15 percent, and the rise of fascism in Europe created uncertainty in that market. John Deere was open to opportunities elsewhere. Thus, when Martin Andrag came to the U.S. in 1939 with a new franchise proposal, John Deere was ready to listen. Andrag, one of five brothers who operated P. Andrag & Sons of Capetown, wanted to sell Deere equipment in the “western province,” which meant the western part of Cape Province in South Africa.
There were two major complications to the proposal, however. The franchise would compete directly with Dunell’s territory and, of course, Wiman and others had made personal investments in Dunell back in 1930. Notwithstanding these impediments, John Deere was able to negotiate a deal that awarded the franchise to Andrag while still maintaining its cordial relationship with Dunell.
Thrown out with the bathwater
In the U.S., the onset of World War II threw manufacturing into high gear as the country scrambled to achieve a war footing. But suddenly export licenses from the U.S. Department of State and later the Board of Economic Warfare were required for overseas sales. And any affiliation with one or more of the Axis Powers (principally Germany, Italy, and Japan) was cause for suspicion. For example, dealers who were German, even though they had no ties to the German government, could be blacklisted. The Andrag dealership in Capetown was caught in this net when the U.S. Treasury Department investigated John Deere’s dealers and found the Andrags were German.
As a consequence of this and the redirection of nations’ resources toward meeting war needs, John Deere’s sales momentum stalled during World War II.
The slow road to recovery
It took almost a decade following the end of World War II for John Deere to catch up with export orders. In 1946-7, for example, the British Parliament created the “Groundnut Scheme” to place 1,000 John Deere tractors in Tanzania, East Africa. John Deere had to decline its ally’s order, though, because it had not yet filled orders that were ahead in the queue.
In other cases, a disappointment in one area created an opportunity in another. In 1948, a cancelled order for 900 Model A tractors allowed John Deere to sell those machines to the Dunell Ebden dealership in South Africa.
Overall, however, the picture for exports was growing dimmer.
Between 1951 and 1956, John Deere’s export sales fell by almost half, to about $13 million. Sensing the urgency to arrest the decline, in 1954 Deere sent John Good and Bob Lovett to Africa to learn more about the needs of farmers and John Deere dealers. The two representatives spent a month in South Africa and Southern Rhodesia (now Zimbabwe), where they visited Dunnell’s head offices in Port Elizabeth and called on local farmers and other dealers, including the Andrags and their dealerships in Capetown and surrounding areas.
A year later, John Deere hosted its largest export conference ever. Over 90 export dealers from around the world attended. Based on what it learned at this conference, John Deere replaced its Export Department with a new subsidiary; John Deere C.A., and built manufacturing facilities in Monterrey, Mexico, and Rosario, Argentina, and acquired Heinrich Lanz AG in Germany.
Around this time, John Deere was reevaluating all its operations outside North American. In 1957, the company held a sales meeting in Johannesburg, inviting representatives from the South African dealerships, from Smith & Bennet in Southern Rhodesia, and from Gailey & Roberts in Kenya. Up for discussion was whether to consolidate Deere and Lanz dealerships, which would be problematic because many were already joint John Deere-CAT dealerships.
Despite its efforts to jumpstart sales in South Africa, by the early 1960s John Deere’s market share for tractors there (primarily the 2010 and 3010 models) had fallen to 4 percent, and its share for implements was even less.
To combat the decline, in 1962 John Deere purchased a 75 percent interest in South African Cultivators (Proprietary) Ltd., which at the time had annual sales of nearly $1 million. Soon after purchasing the stake, John Deere introduced its tillage equipment to the market and then began assembling small tractors to supplement its large tractors, which were shipped to South Africa fully assembled. Although these measures doubled the company’s market share to 8 percent by 1967, the gains came at a financial loss.
John Deere helps chip away at apartheid
By the early 1970s, with the rise of global news, apartheid was attracting more international attention and condemnation. The system of social and economic segregation by race had been enforced in South Africa since the late 1940s, but growing local resistance spread to the U.S., where activist shareholders pressured companies to divest their holdings in South Africa.
John Deere, however, concluded that pulling out of South Africa would do more harm than good to the victims of apartheid. In a 1973 letter to Deere CEO William Hewitt, Senior Vice President Frank McGuire wrote, “We should be at the forefront in our declared policy of equality and fairness equal to all. We should not stay out of places where the policies are not today to the level of man’s dream . . . a presence there is a positive influence toward achieving the goal of equal opportunity.”
John Deere decided to stay in South Africa and become a force for peaceful and constructive change, raising wages for black employees, creating an African liaison committee comprising black workers, and aggressively desegregating its facilities despite a national law requiring workplace segregation. John Deere also contributed to the education of non?white children, especially in Duduza, a segregated township where nearly all of the company’s black Nigel employees lived. And, through the John Deere Foundation, the company contributed more than $400,000 to build a general and technical high school there.
Just a few years after declaring it would resist the calls to divest and instead stay in South Africa to be a force for good, John Deere issued a terse but powerful policy directive: “Our continued presence in South Africa is constructive and proper, and our presence there is helping to improve human conditions for non-whites.”
Fostering improvement beyond South Africa
In the years since, John Deere has expanded its efforts to support human flourishing beyond South Africa and into Sub-Saharan Africa.
John Deere now has nearly 150 employees in Africa, as well as offices in Kenya and Ghana, complementing the company’s sales branch and Regional Parts Distribution Center in South Africa.
John Deere dealerships have multiplied, too. Where there was just Dunell, Ebden & Company a century ago, now there are seven dealers in South Africa with 85 outlets. And in Sub-Saharan Africa, there are 14 dealers with a total of more than 100 outlets.
Because Sub-Saharan Africa has been late in efforts to modernize agriculture, Deere devotes significant resources, providing financial help from the John Deere Foundation and the expertise of its employees, to teaching small-plot farmers how to move beyond subsistence farming into commercial farming.
The story of John Deere in Africa is an old one, sprinkled with shipwreck, risky deals, rebellion, expansion, and development, but it’s a story that is slowly and patiently and hopefully — and with lots of hard work and some luck, irresistibly — heading toward a happy ending.