LS Mtron supplys tractors to world's No. 2 agricultural machinery firm

LS Mtron, the industrial machinery and core component arm of Korea's LS Group, on Monday said it concluded a contract worth 500 billion won ($387.4 million) to supply 28,500 tractors to Italian giant CNH Industrial, the world's second-largest agricultural machinery company.

LS Mtron from next year to 2025 will supply the tractors mostly for the major markets of North America and Europe.

The tractor is a multi-purpose piece of equipment mainly sold to hobby farmers in both markets or companies specializing in garden landscaping. The machine features user convenience, sustainable level of quality and an eco-friendly engine designated Stage V, a stringent European emissions standard for an off-road diesel engine.

Beginning in Australia and Southeast Asia in 2009, LS Mtron has supplied compact tractors of under 60 horsepower to CNH Industrial under the original equipment manufacturing method. The Korean company's cumulative sales this year are expected to exceed 1.2 trillion won spanning around 88,000 units.

CNH Industrial is an Italian world-class manufacturer of agricultural and heavy equipment headquartered in London, with annual sales of $14.7 billion last year in agricultural machinery.

Through this deal, LS Mtron said it secured a stable mid-term basis of supply despite fears over an economic downturn stemming from changes in the global environment.

North America, one of the top markets for agricultural machinery, has seen surging demand for small tractors, a specialty of LS Mtron, since the outbreak of the COVID-19 pandemic. The company added that its tractor sales are seeing major growth in Europe, a leading market for agricultural machinery technology.

CEO Shin Chai-ho said, "Based on securing stable orders, we will stress raising mid- to long-term growth momentum and plan to further expand sales in global markets such as North America, Europe and South America

Write to Sung-Soo Bae at baebae@hankyung.com