Deere Announces Major Investment In Russia

Deere & Co. last week announced plans to significantly expand its presence in Russia, one of the most important growth markets of the company in both agriculture and forestry.

Deere said it has signed an agreement with the Russian government and local authorities to invest approximately $80 million in a central operations center, which includes a distribution, replacement parts and training facility in the Kaluga region, 38 miles southwest of Moscow.

“We believe this is one of the largest single investment projects of a non-Russian farm and forestry equipment manufacturer in Russia,” said Robert Lane, Deere & Co. chairman and CEO. “Our strategic investment reflects Deere’s confidence in the Russian and other Commonwealth of Independent States (CIS) markets. It also recognizes the commitment of our dedicated Russian employees and the support of the Russian government and local authorities.”

In its initial stage, the new 98-acre facility in the Kaluga region will accommodate a 322,000-square-foot replacement parts distribution center, a training facility for dealer personnel, including a product demonstration site, and a whole goods distribution facility.

“The site will leave room for further expansion potential as our business in Russia continues to grow,” said Mark von Pentz, president of Deere’s Agriculture Division for Europe, Africa and South America. “This new center, which will be operational in 2010, marks a growing commitment to this important region. As an interim step for further investments, it also contains a provision for local assembly and manufacturing at a later stage.”

John Deere has a long history of agricultural and forestry equipment sales to Russia. In the late 1920s, the company sold a significant number of plows and its famous Waterloo Boy tractors in Russia. The forestry markets have been served in Russia for over 30 years.

In 2002 Deere opened a forestry sales branch in St. Petersburg. In 2003, the company established an agricultural sales branch office in Moscow, which currently supervises a network of 13 dealers in Russia’s most important agricultural regions.

“In 2005, Deere added a manufacturing and assembly facility for seeding equipment in Orenburg,” added Stefan von Stegmann, vice president of sales and marketing for Deere in the CIS, Central Europe, Africa, Middle East. “This new facility in Kaluga will add significant value to our customers. It will enhance our spare parts supply, provide upgraded training facilities and appropriately reflect our commitment to this important market.”

Moline, Ill.-based Deere & Co. provides products and services for agriculture, forestry, construction, lawn and turf care, and landscaping and irrigation markets.

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