AGCO's Grain and Protein business unit is maintaining a presence in Ukraine, preparing both for the end of the war and for what will be that nation's massive reconstruction, the company revealed this week.
"That story is devastating and really sad," Stefan Caspari, senior vice president and general manager of AGCO's Grain and Protein business, said during a media briefing this week. When the war began last February, AGCO's Grain and Protein unit was looking to fulfill a record number of orders. "This market was gone from the 24th of February (2022 when Russia invaded)," he said.
As to AGCO's grain's continued presence in Ukraine, "We've made sure (team members) are safe and their families relocated to safe places," Caspari said. "We are still (doing) business in Ukraine. There are a lot of farmers (doing) business in Ukraine. But as you can imagine, there is slow decision making and particularly a slow (pace on building new facilities)."
Ukraine -- and Russia, for that matter -- were to play a large part in AGCO's Grain and Protein business vision, the company believed back in 2020 when it completed a deep dive into market potential. Eastern Europe -- Russia and Ukraine, the latter one of the world's largest grains producers -- was viewed as a top prospect for new market development, in addition to Asia, South America and North America.
The Asian market suffered blows from African swine fever and COVID. The extraordinary level of destruction and loss of life in Ukraine is no secret, played out daily in the media.
"There was a time when Russia was targeting infrastructure," Caspari said. "There is a lot of damage to the ag infrastructure, and in particular to storage solutions and handling solutions ... (But) there is strong demand. Farmers in Ukraine are thinking about how they will rebuild their infrastructure (quickly). This is something they are getting ready for. This is something we are doing with the teams on site to make sure we understand the demand and where the demand is coming from, so when they are ready, when we all feel safe, we can switch fast to production and (building)."
AN EYE TOWARD AUTOMATION
AGCO's $1 billion-a-year Grain and Protein business includes swine, poultry, egg and seed storage units, but is perhaps most known for its GSI grain storage and handling systems, with about 70% of that business coming from on-farm orders. Sales for the unit are up 20% over the past three years. AGCO, with $12 billion in revenue last year, also manufactures the Fendt, Massey Ferguson and Valtra equipment lines and owns Precision Planting, a provider of ag technology and agronomy solutions.
Caspari told the gathered media over a Microsoft Teams call that his unit (and AGCO, in general) are designing systems with an eye toward sustainability and new capabilities to remotely manage grain storage and handling.
"Sustainability is one of our key focus areas," he said. One big factor is energy consumption. GSI's automated systems, he said, work to efficiently manage energy consumption. GSI's GRAINVUE automates aeriation by temperature and moisture for energy savings of up to 25%. Other grain monitoring systems in addition to GRAINVUE -- Binrite for grain handling and Connect-Ready dryers -- can be managed from GSI's Connect app (smartphones, tablets and computers). Through the app, users set different strategies, for example, coordinating dryer output with harvesttime moisture conditions. "These systems give our customers peace of mind. They can see the status of operations at any point in time from wherever they are ... and decide what to do with the data."
SUPPLY CHAIN ISSUES 'BEHIND US'
Finally, as is always asked of ag suppliers and manufacturers these days: Is AGCO's grain and protein unit experiencing any supply chain issues?
Caspari's answer was brief. "The simple answer is 'no,'" he said. "Supply chains have eased in most parts of our (AGCO) business," perhaps, with the exception of chips and semiconductors, he said. There was the cyberattack on AGCO last May that briefly shut down global operations. Steel supplies, key to the grain bin business, had their difficult moments.
"This is all behind us," Caspari said. Grain and Protein production operations are at record levels. "We have increased output above our 10-year averages. We have good supplies and good factory performance."
Dan Miller can be reached at email@example.com
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