1 August 1997

AGCO casts net overseas while sales up 49%

AGCO, the parent company of Massey Ferguson, Fendt and numerous other machinery manufacturers throughout the world, reports record sales and earnings for the second quarter of its fiscal year.

Net sales of $871.9m and net earnings of $48.7m were recorded, says the company. Sales increased by 49% over 1996 mainly due to new businesses acquired in the latter part of 96 and January 97. It will be recalled that Fendt was purchased in January.

Referring to sales in western Europe, company chairman Robert Ratliff highlights the decline in tractor sales which amounted to about 2% below 96 levels overall and, about 1% for AGCO-owned manufacturers.

"As in North America, AGCOs retail volume in western Europe has been affected by the anticipation of the launch of the new Massey Ferguson mid-range tractors – the 4200 Series. Sales of Fendt tractors continue to exceed our expectations," he says.

On a more worldwide note, Mr Ratliff points out that economic growth in developing countries will continue to drive the demand for agricultural products.

"As both population and income grows in these markets, the major exporting countries will need to respond with increased agricultural production," he explains. "Developing countries will need to continue to develop and invest in agricultural mechanisation to provide for their own needs."

For the home markets though, Mr Ratliff expects farm amalgamations to lead to a reduction in the total number of units sold and a shift to higher horsepower, more expensive machines.

"This shift will benefit AGCO. We now have a significant position in the western European high horsepower segment."n

AGCO chairman, Robert Ratliff: "Economic growth in developing countries will continue to drive the demand for agricultural products," he says.