Farm machinery make Deere & Co. plans to open a tractor factory in Argentina, as the administration of President Cristina Kirchner seeks to reduce the country's dependence on imported manufactured goods.
President Kirchner is scheduled to meet with Deere senior executive Markwart Von Pentz on Monday night, according to the Presidency's press office. The project will be announced after the meeting, a government source said.
Local daily La Nacion said Monday that Deere will invest $100 million to build five tractor and five harvester models at a plant in the farming province of Santa Fe.
A Dere spokesman didn't respond to emails seeking comment.
Argentina is among the world's top exporters of soybeans, corn and wheat, and record grain harvests last season and high prices were a boon to farmers.
During the first eight months of the year, grain and derivative product exports totaled almost $22 million, up 30% on the year, according to local consultants IES.
Argentine farm machinery makers are expected to see record sales this year as the country's farmers plow their profits into new equipment.
Sales of domestically made farm equipment are on track to reach $1.38 billion this year, up from the previous record of $1.35 billion set in 2007, according to the farm machinery chamber Cafma.
Argentina is also a big importer of farm machinery. But the government has been prodding foreign manufacturers that currently import products to make those goods locally as part of its import substitution policy.
Earlier this year, Italy's Fiat SpA (FIATY, F.MI) said it plans to spend more than $100 million to build a plant to manufacture Case IH and New Holland branded combines and tractors in Argentina through its subsidiary CNH Global NV (CNH, NHL.XE).
Production at the new factory in Cordoba Province is expected to start during the fourth quarter.