Deere to build larger tractors at its plant in Brazil
September 10th, 2013 by Ric Hanson
Quad Cities-based Deere and Company is planning a major expansion in Brazil. The company announced Monday it will spend 40-million-dollars to add production of another line of tractors, the eight-R, at its plant in the city of Montengro. Spokesman Ken Golden says demand is growing in Brazil for higher horsepower models like the eight-R. “This is true across the world as far as high-production agriculture uses our larger tractors — the eight-R, the nine series — for the real workhorse activity that goes on in high production farming,” Golden says.
The five-year old plant in Brazil already manufactures three smaller models, the five, six and seven-thousand (5,000/6,000/7,000) series. Making the larger horsepower tractors in the country opens up a new financing option for Brazilian growers. Golden says it will allow for a public financing program that subsidizes their interest rates. “Until you manufacture the product in Brazil, the product does not qualify for that kind of financing,” Golden says. He says this expansion in Brazil will not affect production or employment at the Waterloo (Iowa) plant where several lines of tractors, including the eight-R, are now being made.
“It’s not competitive right now to build a tractor in Waterloo and move it over to Brazil. Because of the financing package, the tariff cost, we’re not cost competitive in Brazil with the eight-R tractor,” according to Golden. “By building them there we will increase our capacity for building the eight-R tractors around the world, and we will be cost competitive in Brazil.” Production of the eight-R in Brazil should begin in 2015. John Deere first came to Brazil in 1979, when it invested in a joint venture in the country. In 2008, it announced plans to build its own factory there.