Two leading companies plan German-Russian Cooperation
Fendt-AGCO GmbH, based in Marktoberdorf in Bavaria, and Agromash Holding, Moscow, signed a declaration of intent for a strategic partnership during the Hanover Fair 2005. Its objective is to create a long-term, very tight cooperation between both companies for the development, production and sales of tractors, combines and engines. Hermann Merschroth, Vice President Fendt, Spokesman of the Management explained, "We have followed the wishes of our partner and signed the agreement here in the Russian exhibition hall, because President Putin and Chancellor Gerhard Schröder are visiting the trade show and Russia is also the partner country of the industrial exhibition this year. We also wanted to send a positive signal for the future cooperation in one of the fastest growing regions in Europe."
Agromash Holding, based in Moscow, is a leading manufacturer and distributor of agricultural equipment in Russia, and the only company in the country which offers a full line of agricultural equipment. The company has a tractor manufacturing facility in Volgograd, a combine harvester factory in Krasnoyarsk and engine manufacturing facilities in Barnaul. Furthermore, it has subsidiaries in the Russian Federation, the Ukraine and Kazakhstan. The sales distribution network comprises over 120 sales and service locations in Russia and the neighbouring CIS countries. A total workforce of around 20,000 is employed at the various Agromash Holding facilities.
The German company, Fendt/AGCO GmbH, is based in Marktoberdorf in the Allgäu region of Bavaria. High-quality tractors have been manufactured here 75 years. In the fiscal year 2004, unit sales for tractors ranging from 50 to 310 HP were at 11,347, with an export share of around 65 percent. Fendt has a workforce of 2600 employees. The company had net sales of around 760 million Euro in 2004. In the international agricultural equipment industry, the name "Fendt" stands for innovative technology and high-quality products. This year around 26 million Euro were invested in research and development at the facilities in Marktoberdorf. That is a 25 percent increase compared to the previous year and exceeds the industry average by far.
Fendt is the technologically leading brand within the AGCO Corporation. The globally active U.S. corporation, based in Duluth, is represented in over 140 countries and is one of the wordwide leading manufacturers and distributors of tractors and agricultural machinery. AGCO has manufacturing facilities outside of the USA, among others, in Finland, France and Brazil.
With the declaration of intent at the Hanover Fair 2004, Fendt-AGCO GmbH and Agromash Holding have agreed on initiating a strategic partnership, based on extensive negotiations.
Wheeled tractors are to be manufactured in the Russian Federation and the CIS countries for sale in these countries; the same applies to the development and production of spare parts and components. The design and production of a combine harvester model especially for operation in the Russian Federation, including the CIS countries, is also to follow. Furthermore, the companies will design and manufacture engines for agricultural machinery together. Joint sales and marketing activities are planned for tractors, combines and other agricultural equipment in the Russian Federation as well as the CIS countries. Joint sales of Fendt-AGCO spare parts in the Russian Federation and the CIS countries are also planned as well as the development of Fendt-AGCO service and workshop networks. Sales and after-sales training for the products that are produced in cooperation will also bring both companies closer together.
Anchored in the declaration of intent, is the introduction of internationally recognized production and assembly methods into the Agromash manufacturing facilities, using the experience of the Fendt-AGCO GmbH. In addition, Fendt and Agromash will make a joint effort to acquire investors for the construction and renovation of production facilities. The Agromash Holding has agreed to promote the sales of Fendt products through the state-run Russian leasing company Rosagroleasing. Furthermore, both companies will immediately form expert task forces for all the departments concerned, to define the implementation as well as the time frame of these projects.
Fendt is the premium brand of the AGCO Corporation and sets international standards in tractor design in terms of technology, quality and productivity. The tractors from Marktoberdorf in Bavaria have an excellent image in the West European agricultural sector. Now the company aims to utilise sales opportunities on the growing markets in the CIS countries through very tight cooperation with Agromash Holding, Moscow. The annual demand for tractors in Russia, for example, is estimated to be around 200,000 units, and approximately 35,000 units for combines.
The machines from Fendt are used by professionally managed agricultural businesses and agricultural contractors in West Europe. Fendt therefore offers the corporate structures in Russia and the CIS countries the entrepreneurial product know-how they require, including high performance technology. That was the consensus of the Fendt-AGCO GmbH and the Agromash Holding when the declaration of intent was signed for a strategic partnership in the Russian exhibition hall during the Hanover Fair 2005.