Italian tractor and combine maker Same Deutz-Fahr has signed a joint-venture agreement with Chinese tractor and construction equipment maker Shandong Changlin Agricultural Equipment. The 50:50 venture involves an initial capital investment of E20m, leading to a total investment of E60m.

The newly-formed company will manufacture and distribute tractors ranging from 25-110hp under the SH Deutz-Fahr brand and from 110-300hp under the Deutz-Fahr brand.

The plan is to sell more than 30,000 units on the Chinese market in 2015, all of them made in a new 260,000sq m factory designed to have a capacity of 50,000 units a year. The joint venture will use the existing 490-strong Changlin dealer network.

The joint venture allows SD-F to penetrate the important and competitive Chinese market, which is displaying strong growth thanks to the country’s push to develop and mechanise its agricultural sector.

“The joint venture will introduce the patented technologies of the 100-300hp large tractors and the CVT transmission. The project will fill the gap for high-end tractor production in China and will take our country a step closer to reaching the advanced international standards of high-hp tractor technology,” said Zhong Mo, CEO of Changlin Group.

Shandong Changlin Machinery Group is a private enterprise founded in 1943, specialising in agricultural machinery, construction machinery, single-cylinder diesel engines and hydraulic components. It is the second largest producer of excavators in mainland China and in 2010 recorded a total sales turnover of 3.5bn RMB (E400m) with a workforce of 4,600 employees.