RERMAG

Deere to Expand Production Capacity in Russia

Deere & Co. this week announced plans to invest approximately $32 million to expand its production capacity in Orenburg, Russia. Deere has purchased and will renovate a factory in the city and move existing operations in Orenburg to the new, larger facility.

"We believe Russia will continue benefiting from demographic and macroeconomic trends that require increased food production from global agriculture," said Mark von Pentz, president of John Deere's Agricultural & Turf Division. "Russia has the agronomic potential to become a pan-Eurasian breadbasket."

The investment will increase the available manufacturing space for John Deere in Orenburg by 600 percent, resulting in additional production processes being localized and an expanded product offering from four current models to 15 models of seeding, tillage, and application equipment.

"Orenburg is an ideal location because of its proximity to customers who do small-grain farming," said Eric Hansotia, vice president of John Deere's Global Crop Care Business. "In addition, Orenburg provides excellent access to skilled workers and a strong educational system."

Deere assembles seeding equipment in the current Orenburg facility. The expanded operation has been supported by the local and regional governments in Orenburg as a means to continue agricultural and economic development in the region.

Deere's direct investment in Orenburg will result in placement of fabrication, paint, and assembly operations. Including the $32 million of Deere's capital investments, officials said the project represents investments of approximately $50 million in total for the region when including improvements in the local supply base and other costs.

"By expanding manufacturing in Russia, John Deere strengthens our support for dealers and customers and our focus on the important markets in Russia and the CIS," von Pentz added.

Earlier this year, Deere announced it would double the manufacturing space at its Domodedovo production facility near Moscow and establish its own leasing company in Russia for the sale of agriculture, construction and forestry machinery.

John Deere opened the Orenburg production facility in 2005 because of its strategic location to markets in Russia and its proximity to the markets in neighboring Kazakhstan.

Deere & Co. is headquartered in Moline, Ill.

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