DULUTH, Ga. (AP) -- Farm equipment maker AGCO Corp. and Concern Tractor Plants, a Russian industrial machinery builder, on Thursday said they will create a joint venture to assemble diesel engines in Russia.
AGCO said it plans to invest $9 million in the joint venture over the next three years. Both companies will have a 50 percent stake.
The joint venture will assemble and distribute AGCO SISU Power engines throughout Russia and the Commonwealth of Independent States, or CIS.
The joint venture will supply Concern Tractor's plants making industrial and agricultural machinery between 50 horsepower and 350 horsepower. It will also sell engines to outside customers mainly in the CIS countries.
The deal includes a Concern Tractor order for 750 AGCO SISU Power engines to be delivered this year for the joint venture's initial installation and development program, AGCO said.
The joint venture's facility will be located in one of Concern Tractor's existing plants in Vladimir, Russia, and have an initial capacity of up to 20,000 engines per year. The first engines are expected be produced by the end of this year, AGCO said.