Machinery maker says sales strong

HARSEWINKEL, Germany — One of the world’s largest combines slowly made its way from a narrow, European country road into a field of well-aged corn.

Traffic patiently waited for the big machine to clear the road and put up with it tossing a little chaff onto vehicles as it cut its way into the tightly planted field.

And why not? After all, this is Combine City.

Harsewinkel is known by that name across Europe because it is home to Claas. It’s the way Waterloo, Iowa, is home to John Deere’s tractors and Hesston, Kansas, is known for Agco balers and combines.

These are towns where legendary farm machinery dominates the economy and presides over the history of mechanized agriculture.

Despite financially harder times for most of the large farm equipment companies, Claas says its gross receipts, or “turn over” as it is expressed in European terms, should remain relatively steady to down slightly.

As a result, the company is avoiding making many cuts to its production staff.

The Claas family business is the world’s fifth largest farm equipment manufacturer and has had $5 billion in annual sales the past couple years.

It employs 3,300 of its 11,400 staff in the small community of Harsewinkel, so what happens in global machinery sales matters a great deal here.

Despite tight times in farm machinery sales, Claas officials expect to see nearly $5 billion in annual sales again this year.

Wolfram Eberhardt of Claas doesn’t have to worry about market regulators’ sanctions or angry shareholders when he speculates about the 101-year-old company’s year-end sales before the last quarter closes.

“After all, it’s a family business; just a big one,” he said during Agritechnica, the world’s largest farm technology show.

“(Financially) it has been more of a challenge (this year), but the past few years have been so good, one has to expect slowing at some point in agricultural businesses,” he said at the 100 acre Harsewinkel factory complex.

The company continues to invest heavily in expansion, limiting its profit margins to four to nine percent.

A few weeks ago it opened a nine-fold expansion of its Russian combine factory in Krasnodar.

Many farm equipment companies have built assembly plants in Russia to meet that country’s 19 percent tariff on imported farm equipment, but few have chosen to set up full fledged factories built from scratch.

It means that Claas is competing in the one area of machinery production that Russia is known best for: Rostelmash (Versatile) combines.

Eberhardt said Claas will continue to supply engines and transmissions for Rostelmash’s combines, despite now being true domestic competitors.

“We are thinking there is market for all of us. Russia is our next (door) neighbour here,” he said.

“It was a challenge to get the staff we needed, but we have recruited the best people from across Russia to work in the new factory.”

China is a newer market for the company. One in 10 Claas employees are Chinese now that the company has bought combine maker Jinyee of Shangdong.

Eberhard Weller of Claas’s international marketing division said 77 percent of Claas’s business is done outside of Germany. The company’s largest Lexion combines are made in Nebraska and, other than the large 4WD Xerion, which is made in Harsewinkel, its tractors are made in France.

The Claas forage harvesters, which are also made in Germany, have a 40 percent share of the North American market. The company’s balers are made in Metz, France.

Weller said the company tries to build and engineer many of its machines where it has the best market for them and has followed that pattern since the 1960s.

“The largest Lexion is built in North America. The (forage equipment is built) in northern France, where they have a lot livestock. The (small Indian made combine) Tiger is built where they use it,” he said.


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