Deere Announces $60 Million Plan for Chinese Engine Factory
Deere Announces $60 Million Plan for Chinese Engine
Factory
Deere & Co. announced on Tuesday it will spend $60 million to build a new engine factory in Tianjin, China, its second major investment in the country this month and its eighth factory there. The largest manufacturer of farm equipment in the world, Deere buys engines from other suppliers for equipment it builds in China and will continue those relationships for some of its products. The engine factory will be Deere's sixth around the world, joining existing plants that make engines in the U.S., Argentina, Mexico, India, and France.
Deere announced in December that it would build a construction equipment facility, also in Tianjin, to make equipment to sell in the Chinese market and elsewhere. Then last week the company announced it would spend $80 million building a plant in Harbin, China to meet growing demand for large machinery. That plant will be used for metal, painting, and assembly. The Harbin plant is expected to become operational late next year, while the Tianjin plants are expected to begin running late in 2013.
Deere indicated in March that the majority of growth in the world's agriculture and construction over the next ten years will be in emerging markets like China, India, and Brazil. Construction spending in China is expected to come close to $2 trillion by 2020, representing about 20 percent of the global total. Rising farm incomes have boosted Deere's sales of agricultural equipment over the last few quarters, helping the company post higher-than-expected earnings for the most recent quarter.
Deere & Co. announced on Tuesday it will spend $60 million to build a new engine factory in Tianjin, China, its second major investment in the country this month and its eighth factory there. The largest manufacturer of farm equipment in the world, Deere buys engines from other suppliers for equipment it builds in China and will continue those relationships for some of its products. The engine factory will be Deere's sixth around the world, joining existing plants that make engines in the U.S., Argentina, Mexico, India, and France.
Deere announced in December that it would build a construction equipment facility, also in Tianjin, to make equipment to sell in the Chinese market and elsewhere. Then last week the company announced it would spend $80 million building a plant in Harbin, China to meet growing demand for large machinery. That plant will be used for metal, painting, and assembly. The Harbin plant is expected to become operational late next year, while the Tianjin plants are expected to begin running late in 2013.
Deere indicated in March that the majority of growth in the world's agriculture and construction over the next ten years will be in emerging markets like China, India, and Brazil. Construction spending in China is expected to come close to $2 trillion by 2020, representing about 20 percent of the global total. Rising farm incomes have boosted Deere's sales of agricultural equipment over the last few quarters, helping the company post higher-than-expected earnings for the most recent quarter.
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