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Published March 01, 2011, 09:31 AM

AGCO-Amity leads ND to new national customers

FARGO, N.D. — Howard Dahl says Amity Technology’s newly minted 50-50 partnership with AGCO — completed Jan. 3 — could result in a doubling of the company’s manufacturing power in the next two years.

By: Mikkel Pates, Agweek

FARGO, N.D. — Howard Dahl says Amity Technology’s newly minted 50-50 partnership with AGCO — completed Jan. 3 — could result in a doubling of the company’s manufacturing power in the next two years.

It’s hard not to smile about that, Dahl acknowledges, sitting in his office in Fargo, N.D., where he’s worked in farm equipment ventures since 1977. Now, he is president and chief executive officer at AGCO-Amity AGCO J.V. L.L.C. in a deal initially announced last November.

“From our standpoint, we didn’t want to sell out,” Dahl says. “This is a partnership. We had explored partnerships with a number of people about tak-ing products to the world.”

Amity had marketed machines in 14 countries while AGCO, based in Duluth, Ga., has more than 2,700 dealers and operates in 140 countries.

Dahl will head the AGCO-Amity to manufacture and market the air seeders and tillage equipment. Separately, but from the same office, he’ll continue to run Amity Technology L.L.C. as it continues with its sugar beet manufacturing equipment.

(“The sugar beet equipment is such a niche market, it doesn’t belong in AGCO’s global market,” Dahl explains.)

“It’s a good fit,” Dahl says. “Financially, we happen to have a very solid business. Now they’re a partner in that business. The mission for both sides is to grow the business in a profitable manner. It’s been a very good situation — for everybody.”

In its first two months of operation, the AGCO-Amity staff has trained AGCO personnel from Russia, Ukraine and Brazil.

“We’ll train their dealers and personnel throughout the world March 16 to 17,” he says. “We’ll have 44 specialists in Fargo.”

Dahl emphasizes that any dealers Amity previously has had throughout the world are grandfathered in, so to speak, so they’ll continue to sell the AGCO-Amity products. “New dealers — almost exclusively — will be AGCO dealers, but in the U.S., Canada, Russia and Ukraine, we’ll continue to work though our existing dealers. Some of those had been AGCO, but most weren’t.” Case in point: Titan Machinery, based in Fargo, is a Case-IH distributer, and will continue to handle AGCO-Amity air seeders and Wil-Rich. On the Wil-Rich side, a variety of dealers including John Deere, New Holland, AGCO and independents, will continue to carry the equipment where they do now.

A worldwide reach

The big change is the worldwide AGCO reach.

“If we’d have tried to do this on our own, it would have been a very, very difficult task,” Dahl says. “This allows us to go to Brazil, Argentina and other countries to set up a distributer network.”

Dahl acknowledges he considered various options before choosing AGCO. Deere & Co. has the view that they don’t want their dealers selling any other products except John Deere. It’s possible CNH will also move in the same direction, he says.

“From a strategic direction, AGCO had no air seeder, and not a heavy disk harrow like we had at Wishek,” Dahl says. “The products we had matched up very well with their needs. We’re having a major launch in August with all of the products — both here and in Australia, Russia and Brazil,” Dahl says.

It’s another significant venture for a family that includes a who’s who of significant figures in North Dakota agricultural equipment manufacturing.

Howard and Brian Dahl started Concord Inc. in 1977 with their father, Gene Dahl, who was a board chairman for Steiger Tractor Co. Howard and Brian’s grandfather, E.G. Melroe, was a founder of the family company that founded the Bobcat skid steer loader manufacturer. Gene Dahl was a son-in-law to Melroe.

Concord was an early pioneer in the air seeder technology that took off in the 1980s and 1990s, allowing small grains farmers to shift away from fallow rotations. In 1996, Concord sold its air seeders to Case Corp., which was handy with the Case-IH presence in Fargo, where the company already produced tractors.

Air seeder pioneers

Howard and Brian Dahl stayed on for a time as consultants, but also formed Amity Technology. Amity Technology retained its WIC Sugar Beet Equipment line, which they’d owned since 1995 and marketed to Eastern Europe as well as North America.

In 1998, Case-IH stopped making a double-disk drill. Then some of Dahl’s former employees launched Fargo Products L.L.C. and resumed making the air seeders. In 2007, Amity Technology bought Fargo Products to get back in that business. The company continued expanding its influence in Russia.

In 2001, the Dahls became owners in Wil-Rich L.L.C. in Wahpeton, N.D., which manufactured tillage equipment and, at the time, spraying equipment.

In 2006, the Dahls were among partners that acquired air seeding and agricultural attachment lines at Wishek Manufacturing in Wishek, N.D. All of the marketing for Amity, Wil-Rich and Wishek products outside of the U.S. were done by Amity Technology.

Today, the AGCO-Amity venture (excluding the sugar beet equipment) employs about 270 people, including 116 in Wahpeton, 110 in Fargo, 50 in Wishek and 10 overseas, Dahl says. The companies make a variety of products, ranging from $10,000 to more than $200,000.

“I think we’ll double the business within three years. We’ll see,” he says.

All of that will depend on commodity prices, world markets and how good the company’s products are perceived to be, relative to competitors.

“I have my instincts,” Dahl says with a smile. “I know we’re doing very well with a number of our products.”

Potential is great

“We’ll know within a couple of years how big the demand could be,” Dahl says.

He expects the joint venture alone to have sales of more than $100 million within a couple of years.

The biggest unknown is the AGCO-Amity is in Brazil and Argentina. Amity Technologies had been doing nothing there before.

“If we have a good fit there, the growth opportunity would be significant,” Dahl says.

He expects to grow the business as well in Eastern Europe — Russia, Ukraine and Kazakhstan and in Australia, where Amity and Concord already have been.

“We also expect to enter the African market and Western Europe,” he says.

Dahl says that so far his companies have not had problems finding qualified workers to meet increased demand.

“In a sense, there will be access to an AGCO branded product and a joint venture-branded product in certain markets,” he says.

AGCO’s brands are Massey-Ferguson, Challenger and Sunflower. In certain markets, AGCO machines will be painted in a Massey-Ferguson red for AGCO outlets and in Amity red, which is like a Case-IH red, for other markets.

While all of this is new, there is a curious connection with a family history, Dahl notes. His grandfather, E.G. Melroe, operated a Massey-Harris dealership in Gwinner, N.D., while getting the Melroe companies started.

“He had a farm, a dealership, and the Melroe Co. In 1954, his combining crew was featured on the cover of the Canadian Readers Digest magazine. He had a bunch of Massey self-propelled combines.”

Another reason to smile.

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