Tractor and combine maker Same Deutz-Fahr is to open a €20m (£16m) production plant in Russia.

The assembly plant will be located near Moscow and is expected to be in production during the first half of 2009. It will assemble medium and high horsepower tractors – 165hp to 270hp – and will be developed in two phases.

The first will see tractors imported from Germany being completed using localised components like wheel rims, tyres and hydraulics. The second phase will see tractors being assembled from imported components manufactured in Germany along with parts sourced locally.

“We have always considered the Russian market to be the one with the highest potential and be very attractive for investment,” says Massimo Bordi, SDF’s chief executive officer.

SDF, which already has a commercial subsidiary in Russia, expects to increase the volume of tractors sold in the CIS (Commonwealth of Independent States) to 300 units this year. By 2013, it expects sales to reach 1500 tractors/year.

SDF has also announced a cooperative agreement with Concern Tractor Plants, Russia’s largest industrial and agricultural machinery maker, to produce and distribute agricultural machinery within the Russian Federation and the CIS countries.

Future joint projects include: combines in the 270-hp bracket co-production of wheeled tractors using SDF components and joint engineering of a 350hp wheeled tractor based on existing CTP crawler tractors.