Deere & Co. intends to buy and renovate a plant at Orenburg, Russia, and relocate its current operation to the larger site. The plan is estimated at $32 million, and will allow the agricultural equipment builder to increase its manufacturing space by 600%, and the range of machines it builds in the area will increase from four models to 15 models.
The plant currently operated by Deere assembles seeding equipment. It opened in 2005. In addition to the current product line, the new operation will produce tilling and “crop care” machines, too, including cultivators, chisel plows, box and no-till box drills, trailed sprayers, rippers, and other models, Deere said.
Orenburg is an industrial center about 900 miles southeast of Moscow, in the southern Ural Mountains at a point that traditionally marks the meeting point for Europe and Asia. Deere said the location is strategically accessible to markets in Russia and Kazakhstan.
"Orenburg is an ideal location because of its proximity to customers who do small-grain farming," explained Eric Hansotia, vice president of John Deere's Global Crop Care Business. He added that the area has a good supply of skilled workers and a strong educational system.
Earlier this year, Deere said it planned to double manufacturing space at a plant and distribution center near Moscow, and establish a leasing company in Russia for its agriculture, construction, and forestry machines. "We believe Russia will continue benefiting from demographic and macroeconomic trends that require increased food production from global agriculture," stated Mark von Pentz, president of John Deere's Agricultural & Turf Division. "Russia has the agronomic potential to become a pan-Eurasian breadbasket."
