The Rising Influence of Rising Affluence

[DewDiligence]

DE Invests $60M in China Engine Factory

[This factory, in Tianjin, is in addition to the $80M tractor plant in Harbin that DE announced a week ago (#msg-63258547).]

http://www.reuters.com/article/2011/05/24/deere-china-idUSN2419496520110524

›Tue May 24, 2011 10:23am EDT

NEW YORK, May 24 (Reuters) - Deere & Co (DE.N: Quote, Profile, Research, Stock Buzz), the world's biggest farm equipment maker, will spend $60 million to build an engine factory in Tianjin, China, its second investment in the country this month and its eighth Chinese facility.

The company buys engines from other suppliers for equipment built in China and will continue to do so for some of the products it manufactures there, spokesman Ken Golden said.

The engine plant will be Deere's sixth globally when it starts production in late 2013, the company said on Tuesday. Deere's current engine factories are in the United States, Mexico, India, Argentina and France.

In December, Deere set plans for a construction equipment facility, also in Tianjin, for both the Chinese market and for export.

Deere said last week that it would commit $80 million to build a metal, painting and assembly plant in Harbin, China, to meet higher demand for large farm machinery. It expects the Harbin factory to come on line late next year. The company already makes harvesting equipment in the region.

Once the newly announced plants are up and running, Deere will have eight manufacturing facilities in China, including two joint ventures.

TARGETING EMERGING MARKETS

Most of the world's growth in agriculture and construction in the coming decade will be in emerging economies like China, India and Brazil [duh], Deere said in March. Construction spending in China is forecast to reach nearly $2 trillion in 2020, accounting for a fifth of the global total. A boom in farm incomes around the world has raised Deere's agricultural equipment sales in recent quarters.‹