1.Background of Joint Venture Business
HCM and Deere have reached agreement to form a joint venture in Brazil for manufacturing and sales of hydraulic excavators with the intent to make a full-fledged entry into the Brazilian market, where the demand for construction equipment is growing rapidly. HCM, which has world’s leading technologies for hydraulic excavators, will provide its technologies to the joint venture for its local production of hydraulic excavators, and Deere, which has a strong local presence through its agricultural equipment business, will market the hydraulic excavators manufactured by the joint venture.
HCM and Deere have built an important partnership in the Americas since 1988 when they formed Deere-Hitachi Construction Machinery Corporation, which is a joint venture based in North Carolina, the United States of America (“Deere-Hitachi”), for manufacturing and marketing of hydraulic excavators. The joint venture business in Brazil is in furtherance of such partnership to pursue their growth opportunities jointly on a long term basis.