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Ag Manufacturing Coming to America

January 7, 2013
US production facility
Faster delivery times and lower costs are among the reasons that Dutch-based Lely has invested in its first U.S. production facility. Its robotic milker plant in Pella, Iowa, will assemble up to 10 machines each week.  
 
 

By Jim Dickrell and Ben Potter

Global ag companies bring manufacturing to the U.S.

One occurrence would be considered an anomaly. Two would be an anecdote. But four just might signify a trend—especially if they occur within six months.

  • In March, Dutch-based Lely, the world leader in robotic milkers, held a grand opening of its new Pella, Iowa, assembly plant.
  • In April, Mitas, a Czech tire manufacturer, opened a production facility in Charles City, Iowa.
  • In June, AGCO unveiled its completely retooled and expanded tractor assembly plant in Jackson, Minn., which will eventually produce 18 models that had previously been built in Beauvais, France.
  • In September, German equipment manufacturer Geringhoff announced plans for a $200 million plant to build corn headers and other ag equipment in St. Cloud, Minn.


All four companies cited closeness to market as a reason for moving manufacturing to the U.S. America’s booming ag economy is another reason to be near the action. Shortline manufacturers have moved more production in the past 12 months to the U.S. as well.

Mitas

Mitas, a tire company based in the Czech Republic, opened a plant in Charles City, Iowa.


Major milk market. "North America is the single biggest market for robotic milkers in the world," says Chad Heiser, Lely’s director of operations in Iowa.

Lely cites faster delivery times and lower costs as reasons for moving assembly from Rotterdam, Holland, to Iowa. The new 40,000-sq.-ft. plant and office complex is located on the sprawling campus of Vermeer Corporation, manufacturer of agricultural and industrial equipment. Lely leases the facility from Vermeer.

Lely hopes to assemble a couple robotic milkers per day, perhaps 10 per week, at the Pella facility. The facility is closer to the company’s U.S. customers by five weeks (four weeks on the water and another week through U.S. Customs) than its current assembly facilities in the Netherlands.

"By early 2013, we hope to have all of our local sourcing of parts nailed down," Heiser says.

Trans-Atlantic freight savings, U.S.-sourced parts and elimination of international currency fluctuations should all provide savings, says Alexander van der Lely, CEO of the Lely Group, based in Holland.

"Hopefully, we can reduce the price of the robots. But before we do, we need to see what the actual savings are," he adds.

Making tracks. Czech Republic–based tire company Mitas is also expanding manufacturing to the U.S.

agco

AGCO will produce all of its 140 to 290 PTO hp tractors
in Jackson, Minn.


"The relationship between our countries is reaching a new phase," says Czech Republic ambassador Petr Gandalovic. "Opening the plant and creating a significant number of jobs represents a stronger and longer lasting bond than any volume of imports."

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FEATURED IN: Farm Journal - January 2013

 
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