Ziegler as a brand name is not widely known here in Ireland or the UK, yet it is a significant player on the continent where it not only produces its own tillage equipment and combine headers but is also a contract manufacturer for other companies such as Kverneland and Kuhn.
The company was formed in 1923 at Pottmes in southern Germany where it still has its main offices.
However, it is reported that the company has moved the remaining German production to its factory in Latvia, which was already producing 80%of its products.
The company’s managing director, Josef Ziegler, is quoted as saying that this bundling of the products and services into one location will meet the customer’s needs in the best possible way.
Yet the move does illustrate the difficulties German manufacturing businesses have been experiencing in trying to cope with staff and energy costs, and these are significant factors in the final price of any machine.
Ziegler’s costs
The cost of electricity for businesses in Germany is 23.9 cents/kWh, while in Lativa it is 14.7 cents/kWh, offering a considerable saving to an energy-intense industry.
It is a similar picture when it comes to staffing, with average total costs (including holiday pay, national insurance contributions, etc.) of €43.4/hour in Germany compared to just €15.1 /hour in Latvia.
Ireland, as a matter of interest, comes in at €42.5/hour, so stories of Irish manufacturing companies buying components in from elsewhere in Europe cannot be immediately discounted.
Good vibes fade
Yet machinery still remains expensive and trade subdued, despite the false dawn of a couple of months ago.
CEMA, the umbrella organisation for European machinery trade associations, has scaled back its optimism of the last couple of months.
It notes that the general business climate index for the agricultural machinery industry in Europe has dropped slightly after its continuous rise into positive territory over the earlier months of this year.
In June, the index decreased from +7 points to +4 points (on a scale of -100 to +100), indicating that the positive expectations of earlier this year have not, as yet, materialised in the order books.
Some light
Even though the mood has dropped a little, the survey participants expect their company’s turnover to slightly increase by 3% on average for the full year of 2025.
Broken down by segment, it is tractors and harvesting equipment that has deteriorated the most, especially with regard to the evaluation of the current business.
This pessimism is not confined to CEMA for the VDMA in Germany – the German engineering association – has recorded a fall in the capacity utilisation of its members in eastern Germany.
This has now fallen to 79% whereas this time last year it stood at 83%, although this figure spans all engineering industries and not just farm machinery.
Staff skills
Ziegler will not be alone in looking to strip down its manufacturing costs.
The Baltic and Balkan states are starting to look ever more attractive as centres for manufacturing and they also tend to foster the trades and manufacturing at secondary school-level.
This focus is intended to help maintain industry locally by ensuring a workforce equipped with the greater skills that manufacturers, such as Ziegler, require in their staff to produce ever more complex machinery.
The VDMA points out that within German manufacturing, one in four employees is 55-years-old or more, and companies face a growing shortage of those equipped with suitable knowledge and experience for the modern production process.
