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German Equipment Makers Investing to Increase Production

Some of Germany's biggest farm machinery firms saw record sales revenues last year before the global economic crisis began to impact agricultural machinery markets.

Potato and sugar beet equipment specialist Grimme, whose equipment is distributed in North American by Spudnik, Blackfoot, Idaho, sold equipment worth more than $302 million at current exchange rates last year, more than 21% up on the year before when sales increased by twice that amount over 2006.

Tillage equipment firm Lemken, meanwhile, recorded sales of $346 million, more than 40% up on 2007 and continuing a five-year trend in which the family owned concern has more than tripled business volume.

Both companies have invested in improved resources: at Grimme's headquarters plant, a new logistics center with a fully-automated warehouse and a new shipping department have been installed.

New production facilities in the web fabrication department are said to be "one of a kind."

Lemken has piled cash into making production and dispatch areas for its cultivators, seeders and moldboard plows 50% bigger than before. A new high-tech paint shop will be brought on-line mid-year as part of the record $33.6 million spend.

These sales growth figures are unlikely to look as healthy this time next year, however, due to softening demand in Western Europe and a catastrophic lack of credit in the eastern and central European markets where recent growth has been fueled by State as well as private investment.

Grimme says it expects 2009 sales revenues to fall back to between 2008 and 2007 levels unless those markets stage an unexpected recovery.

Source: Ag Equipment Intelligence

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