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Published January 06, 2014, 09:27 AM

AGCO signs Minn. lease

After finalizing a three-year lease agreement with Ferrara Candy Co., AGCO Jackson Operations and its logistics company, G&D, has hired seven new full-time positions as it begins to use the warehouse and load-out areas of the former candy packaging facility in Round Lake, Minn.

By: Julie Buntjer, Forum News Service

ROUND LAKE, Minn. — After finalizing a three-year lease agreement with Ferrara Candy Co., AGCO Jackson Operations and its logistics company, G&D, has hired seven new full-time positions as it begins to use the warehouse and load-out areas of the former candy packaging facility in Round Lake, Minn.

Scott Berglund, senior project manager for AGCO, says the first phase of operations at the Round Lake facility will begin on Jan. 6, when parts warehoused at the site will begin moving to the Jackson plant for production. The warehouse will store everything from engines and transmissions to smaller components. AGCO Jackson Operations manufactures lines of Challenger and Massey Ferguson tractors and sprayer equipment.

Since signing the lease, AGCO has begun consolidating its inventory at the Round Lake facility.

“We’ve already transitioned out of one of our warehouses outside the region and moved parts inside the building,” Berglund says.

AGCO products stored in at least three other warehouses outside the region will be moved to Round Lake in the coming weeks.

Co-locating the products in Round Lake has multiple benefits, says Berglund, adding that warehouse spaces previously used by AGCO were at least several hours, if not a full day’s drive from Jackson.

“Putting (the parts) in Round Lake means less than 30 minutes,” he says. Also, for the first time, AGCO has a logistics company in G&D to manage all of the parts in the supply chain.

“Putting it in the hands of one company to manage, it’s going to be all the more easy to manage,” he says. “We will not suffer as many parts shortages that we do today or have in the past.”

The seven full-time employees, now completing the training and orientation process, will primarily do material moving, warehouse production and inventory control. The filling of those jobs completes the first of what will be a multi-phase project to utilize the space at the Round Lake facility.

Berglund says plans are still being worked out for the second phase, which he anticipates will be completed by mid-March and include the hiring of additional people. Ultimately, plans are to have 25 employees at the Round Lake facility and to further utilize the space available there. Initially, Berglund says they will use only about half of the square footage.

“We haven’t identified yet what specific operations we’ll be moving in there,” he says of the available space.

Modifications to the existing loading dock began a week before Christmas, and are expected to be completed in early January, while material storage work is being done in the warehouse area.

Berglund says AGCO Jackson is thrilled to have the warehouse space in Round Lake, and says the three-year lease gives the company needed flexibility. There is a buy-out clause in the lease, should AGCO decide to make the Round Lake site a permanent fixture in its operations.

“In terms of lease versus purchase, it’s too soon to tell at this point,” Berglund says. “AGCO’s very excited to have this opportunity and looking forward to the experience. By and large, we’re happy to be in a somewhat different labor pool and having people in the community excited to have us.”

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