CALGARY — Carving out your own space at an established table requires strategy and, sometimes, bringing new players to the game.
German farm machinery maker Claas has made a name for its equipment in Western Canada for 20 years, initially working with Caterpillar.
The Lexion harvesting equipment has become increasingly popular for its capacity and unique approaches to technology use.
Claas now hopes to gain ground in western Canada by working with a German co-operative, BayWa, which will open new dealerships, starting in Alberta.
Distribution has been a challenge for Claas in Western Canada because of a limited number of dealers and Caterpillar’s shift away from agriculture several years ago.
Claas responded by opening company-owned dealerships in Regina and Saskatoon and ex-panding its network of independent distributors. The Regina operation also houses the parts distribution and logistics operations.
“We have some great partners in the region,” said Eric Raby, Claas president in North America.
He said Claas has existing dealership arrangements with BayWa. This will be the third country in which the co-op has opened farm machinery dealerships in the past two years.
Nearly 70 percent of the 90-year-old business is in agriculture with 3,000 locations in more than 30 countries, including farm machinery dealerships. It’s revenue totalled more than $21.6 billion in 2015
BayWa also has a farm data arm, which assists producers in digital farm information collection, analysis and management.
“We looked for a partner and BayWa is well known to Claas in Germany and it was a good fit,” Raby said.
The companies will make sure that the location of new dealerships don’t infringe on existing independent dealers’ markets, he added.
Klaus Lutz, chief executive officer of BayWa, said the Canadian expansion fits with the co-op’s international plans.
“In addition to our grain trading and fruit business, BayWa can now take a step into a new market to achieve a more diversified international business,” he said.
The companies plan to announced the first location by the end of next month and have it operational by harvest time.
Raby said reduced commodity prices over the past couple of years “has been no cake walk” for the farm machinery industry.
“If we can do this now, when times are tighter, then it bodes well for success in the future,” he said.
“As we all know, farmers don’t want a fair weather fan that can only make it when times are good.”
Claas doesn’t intend to bring its seeding, tillage and smaller tractors to Western Canada at this time.
“It will be (a lineup) including combines, balers, forage harvesters and the Xerion (tractors),” he said.