Agco’s Lely takeover will mean ‘aggressive’ pricing for the hay gear

LELY balers and hay equipment will be “aggressively” priced under the takeover arrangement with new owner Agco, which bought the brand and its European manufacturing set-up last week.

New force: Warwick McCornick and Mark Smyth at Elmore.

LELY balers and hay equipment will be “aggressively” priced under the takeover arrangement with new owner Agco, which bought the brand and its European manufacturing set-up last week.

The famous red brand’s hay equipment will continue to be sold by Lely dealers, but branded Massey Ferguson and distributed via Agco and existing Lely dealers.

Lely will continue to operate, focusing on its dairy machines such as its robotic milker.

Agco Australia’s managing director, Warwick McCormick, and Lely’s country manager, Mark Smyth, explained the new deal at a media conference at the Elmore Field Days last week.

Mr McCormick said his company’s buying power allowed it to review pricing on the Lely products they will sell.

“There is some scope to do something on pricing with the Lely Welger product, particularly in New Zealand,” he said.

“The way that Lely do their costing and price structure globally is quite different to the way Agco does it.

“We’re more market-related in pricing where Lely were ‘this is what it costs’ price strategy. What that allows us to do locally is to look at the competition and see where it needs to be placed.

“We need to make the dealers comfortable that if they’ve had the Lely franchise and are going to continue on, that it’s competitive.

“Equally, if we pitch to someone else (to sell the rebranded grass equipment) then we need to be aggressive (on pricing).”

He also said it would be business as usual for Lely retailers and dealers, even those outside the Agco dealer network, with elements of Lely’s heritage continued.

“The Welger name we purchased as part of the acquisition so even if we branded the balers as Massey Ferguson in the future it will certainly have an element of the Welger name as we do with Hesston balers today,” Mr McCormick said.

The exiting Lely base at Rochester will also be considered for capital investment with a prospect of it becoming Agco’s green harvest base.

“We would not just take the Lely piece that’s there today but add the big square balers and mower conditioners and other stuff we do today,” he said.

He said the closure of Rochester’s Murray Goulburn factory also presented expansion opportunities, which were under consideration.