MOLINE, Ill. (AP) -- Deere & Co., the world's largest agricultural-equipment maker, said Monday its board of directors has approved a plan to establish a new manufacturing and parts center in Russia.
The Moline, Ill.-based company said the facility near Moscow will be capable of making a broad range of John Deere products, including tractors and harvesting equipment, as well as construction and forestry products.
Financial terms were not disclosed.
The news follows an announcement by Deere in July that it was prepared to expand significantly its farm, forestry and construction operations in Russia, given the right market access conditions. That statement was issued ahead of a business forum tied to summit meetings between Russian President Dmitry Medvedev and U.S. President Barack Obama in Moscow.
On Monday, Deere President and CEO Samuel Allen said the new plant was the first step in that plan.
"Russia will be a major contributor to meeting the world's future needs for food and forestry products," he said in a statement. "Our investment in this new facility helps Deere prepare to significantly contribute to the Russian government's vision for expanding exports from Russia in these important sectors."
Deere said it will also consolidate several depots into one site to improve parts and customer service.
The project complements Deere's planned investment in a national operations and training center in Russia's Kaluga region and its existing seeding equipment manufacturing facility in Orenburg.
Deere said it intends to expand its presence in Russia in current facilities and other locations around the country.
Shares of Deere slid 81 cents, or 1.8 percent, to $43.62 in morning trading.