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Versatile Launch In Vegas No Gamble

If Dimitry Lyubimov has his way, Winnipeg-based Versatile will follow the lead of AGCO Corp., which rose from obscurity to become one of the world’s major farm equipment manufacturers in two short decades.

Lyubimov became president of Buhler Industries in late 2007 when Russian combine manufacturer Rostselmash purchased an 80 per cent stake in Versatile’s parent company.

At a dealer convention in Las Vegas, Nevada, in early January, Lyubimov made it clear the company has its sights firmly set on expanding the Versatile product line. “We realize to be competitive we need to offer a full line of equipment,” he said. “It’s very difficult to compete with only a four-wheel drive.”

Standing in the convention centre surrounded by a display of new machines introduced for 2010, Lyubimov described them as the first step toward achieving the full-line goal. Among the new offerings for this year is a 575-horsepower

four-wheel-drive tractor, which puts Versatile back near the top of the pack when it comes to maximum power.

MODEL GROWTH

The company’s MFWD tractor line will grow significantly this year, too, with the addition of 190-horsepower and 220-horsepower models. Company executives claim they’re designed with features intended to appeal to producers who need a multipurpose tractor, capable of handling field operations and front-end loader work. A 305-horsepower model will also make an appearance later this fall.

And for the first time, the company is offering a self-propelled, high-clearance sprayer. Buhler acquired the design, which had previously been distributed in North America under the Redball brand name. According to Lyubimov, Redball’s parent company, Wilmar, was experiencing financial difficulty and willing to sell the machine, which fit in well with Versatile’s philosophy of using uncomplicated, reliable engineering.

Purchasing the Redball design allowed the company to take another step toward its full-line goal more quickly than creating and testing its own sprayer. And that isn’t likely to be the last purchase the company makes. In fact, Lyubimov says, the company is currently shopping for dryland seeding equipment to add to its stable. “We’re looking for an acquisition,” he said.

The new tractors and sprayer will make their public debut at the National Farm Machinery Show in Louisville, Kentucky, later in February.

MORE SURPRISES

As company execut ives proudly guided dealers and journalists around the new machines at the Las Vegas convention, there were a few hints of more surprises on the horizon. Grant Adolph, chief operating officer at the Winnipeg tractor assembly plant put it this way: “Some of our new products you can see here today, and some you’ll have to come back in the future to see.”

But perhaps what is most remarkable about all this talk of expansion, is it comes in a year when most of the other manufacturers are hunkering down to weather the economic slump. While all the major manufacturers in the industry reported declining sales in 2009, Buhler Industries’ earnings soared 23 per cent, lifting net profit to $14.4 million.

“In 2009 we achieved the biggest sales volume in company history,” adds Lyubimov.

Even more remarkable is sales numbers have risen despite the fact eastern Europe, historically a major market for Versatile tractors, has been hard hit by a lack of available credit; and sales of all farm equipment into that region have softened significantly.

SALES UP

In North America, tractor sales declined too. According to the Association of Equipment Manufacturers, overall sales in Canada fell by more than 19 per cent compared to 2008, and the U. S. saw a 21 per cent drop. Fortunately for Versatile, however, four-wheel-drive tractor demand has remained relatively stable in both countries. Most of the declines have been in the lower-horsepower segment where Versatile had only two competing models.

“I think we made a very good decision to be a more global company,” says Lyubimov. “We used to rely on the eastern (European) market. Now we have Australia, North America and CIS (the Commonwealth of Independent States). We had a very good year in Australia and North America.”

The company has also started looking to South America and China as potential markets for both its high-horsepower and rigid-frame tractors along with the new sprayer. With the Chinese government doling out US$2 billion in subsidies to regional agricultural authorities for mechanization purchases in 2010, the timing likely couldn’t be better.

And since the Rostselmash take over, one question has repeatedly been asked: will Versat i le begin to market Rostselmash combines in North America? The answer, apparently, is yes. Lyubimov says the Russian parent company has developed a new Class 8 model that has been in field trials for the past two years. If it performs well under Canadian conditions, expect to see it join the Versatile line sometime in the future.

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