John Deere 2011 Annual Report Download - page 5

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5
Many experts believe agricultural output will need to double by
mid-century to satisfy demand and do so from essentially the
same amount of land and with even less water. Production gains
on this scale are not without precedent. However, as in the past,
they will require further advances in farming mechanization and
productivity to achieve.
At the same time, people are migrating to cities from rural areas
in great numbers. This furthers the need for roads, bridges, and
buildings – and for the equipment required to construct them.
These trends, which appear to have considerable resilience,
are positive for John Deere. In our view, they should support
demand for innovative farm, construction, forestry and turf-care
equipment and related solutions well into the future.
Expanding our Global Market Presence
Favorable tailwinds are one thing; pursuing aggressive plans to
capture them is another. To that point, John Deere is moving
ahead with a far-reaching operating strategy aimed at expanding
our global presence in a major way. The plan’s centerpiece –
a mid-cycle sales goal of $50 billion by 2018 – requires substantial
investments in additional capacity, distribution, credit and after-
market support.
Over the last year, Deere announced plans to build seven factories
in markets critical to our growth. These investments build on
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marketing presence worldwide.
Of the new facilities, three are in China, for construction
equipment, engines and large farm machinery; two are in Brazil,
both for construction equipment; and one is located in India,
Rice binder Deere harvesting machines like the 1920s-era rice
binder have been a part of rice harvesting for
generations. The new R40 Small Track Combine,
built in Ningbo, China, is designed for paddy rice
harvesting and can be used for wheat and other small
grains. The combine has an advanced separating
and cleaning system and a hydrostatic drive.