Tractor maker in US$100m investment

United States agricultural equipment maker AGCO said yesterday it planned to invest US$100 million in China over the next few years.

The manufacturer of tractors, combines, balers and planters will kick off its first batch of two manufacturing bases next year in Changzhou, Jiangsu Province, and Harbin, Heilongjiang Province, to localize its production with the ultimate goal of making China its global sourcing and manufacturing base.

"Asia Pacific, particularly China, has the strong potential for market growth since it encompasses the largest populations and fastest-growing economies," said Hubertus MuhlHauser, senior vice president and general manager of Eastern Europe and Asia.

MuhlHauser said he still sees China's agricultural equipment market growing by double digits this year against the global economic downturn.

"Growth in the region overall is expected to be driven by growing demand for food and changing diets, which in turn drive the trend towards greater mechanism," MuhlHauser added.

The Changzhou plant, which is expected to start production in the first half of 2010, will have a capacity of 20,000 tractors as well as transmissions and engines. The diesel generating set facility in Shanghai will also be transferred to Changzhou.

The Harbin factory, which will produce tractors, combines and balers, will be launched later next year.

AGCO mainly deals in import and sourcing business through its representative office in Beijing at present.