|Andy Beck, senior vice-president and chief financial officer.|
NEW YORK, NEW YORK, U.S. — Although admittedly in a cyclical downturn right now, AGCO Corp. is fully focused on investing in its business for the long term, Andy Beck, senior vice-president and chief financial officer, told analysts during an Aug. 9 presentation at the Jefferies Industrials Conference in New York.
Beck said the Duluth, Georgia, U.S.-based company has centered much of its investment on new technologies and new products.
“In new products, we’re trying to maintain a high level of engineering and R&D expense in order to make sure that the cycle of new products that are coming out continue to be very robust,” he said. “We’re investing in products outside of the tractor, our core tractor markets, also in the area of harvesting application equipment, and also investing a lot in new technologies or the term precision agriculture. And that is a very important trend in our business and we think an opportunity for future growth and differentiation amongst competitors. And so, we have a lot of investment in new technology as well around that area.”
GSI Holdings Corp., the global manufacturer of grain storage and protein production systems that AGCO acquired in 2012, also has potential, Beck said.
“That business has a lot of growth opportunities as we expand out of the North American market into other markets around the world,” he said. “We’re also doing some smaller bolt-on acquisitions as well to grow that platform.”
Expanding in developing markets also is an area of growth for AGCO, Beck said.
“There’s opportunity for more mechanization, for more advanced farming, and many markets around the world, including Africa, areas of Brazil, Asia, as well as Eastern Europe,” he said.
Beck said AGCO expects better coverage in Europe, Africa and the Middle East due the recent acquisition of Cimbria.
“GSI was not a strong player in that segment,” he said. “(Cimbria) also gives us a lot of opportunities for cost reduction and synergies through selling complementary products through both selling networks.”