Deere Begin Tractor Production in India

Deere & Company's joint venture for tractor manufacturing in India has started production of 55-horsepower tractors for customers in that country. The joint venture, L&T - John Deere Limited, is located near Pune, India and is equally owned by Larsen & Toubro Limited and Deere & Company.

Deere & Company, Moline, Illinois (USA), is the world's leading producer of agricultural equipment and Larsen and Toubro Limited, Mumbai (Bombay), India, is among the top ten companies in India's private sector.

"This is a significant step forward in India, both for Deere & Company and for the farmers of that region," said Robert W. Lane, president and chief operating officer at Deere & Company. "This is a sure sign that we are focused on opportunities for global growth. We need to continue development of new markets and new products to provide superior customer value and improved financial results."

The plant in India is initially producing the 55-horsepower model and will add two smaller models within one year. Lane said the tractor size and features are designed to meet the requirements of the Indian farmer. The 50,000-square-meter factory has a capacity to manufacture 30,000 tractors per year although Deere said it would produce less than that initially and would ramp up production over the next four years.

"We entered this market to introduce proven technology to the farmers in India. These basic machines provide improved comfort, safety and product engineering. Additionally, we have expanded our service and support capability in India," Lane said.

L&T - John Deere Limited already has established a marketing network in the states of Maharashtra, Gujarat and Madhya Pradesh in India and a dealer network is established and will be expanded.

The India joint venture is one of several recently discussed by Deere. Also underway are joint ventures to produce tractors in Turkey and China.

"Operations outside the United States have emerged as a solid contributor to business results for Deere & Company. We believe our efforts in India will assist in continuing that trend," Lane said.

Last year, for instance, when the North American agriculture economy slumped, overseas equipment sales for Deere contributed $224 million of operating profit versus a net $48 million operating profit for all Deere equipment divisions in North America.

"Without question, overseas profitability -- something missing in previous downturns -- has been a key to the company's solid performance during the current agricultural slump here in North America," Lane said.