John Deere Plant Investments Lead to Strong Profits

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Researched by Industrial Info Resources (Sugar Land, Texas)--John Deere has been an exemplary brand of farm machinery and equipment for years. With strong profits announced yesterday for Deere & Company's (NYSE:DE) (Moline, Illinois) second fiscal quarter, it continues to be the leader in the industry.

Part of Deere's increase in revenues has been the increase in equipment sales in the United States and Canada, which have increased 18% year over year, compared to a 6% increase in overseas sales. The company now expects approximately $3.3 billion in profits for 2012.

Behind these increased profits is the side that many people don't consider--the expansions and equipment additions John Deere has done and is currently performing.

John Deere is investing $70 million to increase manufacturing capacity at its facility in Waterloo, Iowa, that makes large farm tractors. The expansion at the Waterloo plant will increase the number of tractors Deere can build at the plant by 10% over the next year and a half. Once the expansion is completed, the plant's production capacity will have increased more than 50% since 2002. Currently, the Waterloo plant ships to more than 130 countries and employs about 6,000 people.

Deere is also expanding the production of self-propelled sprayers at its manufacturing plant in Des Moines, Iowa. The investment of $85 million includes capital improvements, new tooling, and a new 300,000-square-foot building where the machines will be built.

John Deere has several plant expansions and new construction projects planned or in progress, including operations in India and Russia. Deere expects equipment sales to rise about 15% in 2012, and increase 25% in the third quarter.

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