Deere Adding Construction Equipment Factories in Brazil

October 3, 2011

Deere & Company said that it plans to build two new factories in Brazil to meet growing market demand for its construction equipment products in Brazil and other South American countries. The total investment is approximately $180 million, with Deere investing approximately $124 million of the total.

Deere plans to build both factories in Indaiatuba, Sao Paulo. One factory will be solely owned by Deere to manufacture backhoe loaders and four-wheel-drive loaders while Deere will partner with Hitachi Construction Machinery Co. Ltd. on a second factory to manufacture excavators.

The product line manufactured in Brazil will be supplemented with imports from other factories, Deere said. The company plans to also establish a distribution network to sell and service the equipment similar to the dealer organization for John Deere agricultural equipment in Brazil.

Deere already has a strong presence in Brazil serving the agricultural and forestry equipment markets with three manufacturing facilities, a parts distribution center for South America, a bank operated by John Deere Financial Services, and a facility for John Deere Water.

Deere expects equipment built in the new manufacturing facilities to meet the level of domestic content required of the Special Agency of Industrial Financing. The workforce at the factories could exceed 600 employees depending on market demand for products. Suppliers and other companies that provide services to the factories will also add additional indirect jobs.

Construction of the factories is expected to begin in early 2012 with product manufacturing to start in late 2013. Deere and Hitachi already have a joint venture in the United States to manufacture excavators. In addition, the two companies have a marketing agreement in the Americas.