When Sid Bardwell travels around Russia, he sees vast expanses of rich farmland.  And on that land, he can envision a John Deere tractor, pulling a John Deere seeder, sowing crops that will be harvested by a John Deere combine.

     “Nowhere in the world is there this much rich, well watered agricultural land available for increased development,” said the general manager of John Deere’s Russian agricultural operations in an interview with America in Russia.  “I have been amazed and excited by the potential.”

     While Bardwell’s portfolio is agriculture equipment, John Deere also sees potential for expansion in forestry. Russia has 18 percent of the world’s forests, and it is the only nation where forests are growing faster than harvesting.  Yet a significant amount of Russia’s forestry equipment is obsolete.

     That provides a great opening for John Deere. 

     In 2008, at the peak of the commodities boom, John Deere agriculture sales in Russia crossed $500 million.  Sales of the company’s forestry machinery neared $200 million. 

     “We literally couldn’t get enough equipment to the market to satisfy the demand,” he said. “Nor could any of our competitors, domestic or international.  We are still very bullish about the long-term potential.  There is a strong, pent-up demand for equipment in both agriculture and forestry.”

     Bardwell has been in Russia for five years and still considers himself a newcomer.  His experience with John Deere dates back to 1989, and he has spent a large part of that time in its international operations, working in Asia, Europe, Canada and Latin America.

      His grandparents nurtured his appreciation for agriculture on their farm 30 miles west of Madison, Wis.

     Bardwell headed to the University of Iowa as a geology and economics major, aiming at a career wearing flannel shirts and hiking boots. But he soon was captivated by Asian studies.  He grabbed a chance to study in Japan for a year, and after he graduated he returned to southern Japan to teach English and become proficient in Japanese.  From there, he got an MBA at Cornell. The combination of Asian studies and business management attracted the attention of John Deere, which sent him back to Japan to oversee operations there and in South Korea and Taiwan.

     When he took over the Russian agricultural operations in 2004, he was surprised to find out how much Asian influence there is in the Russian culture.

     “When you look at the architecture of Moscow, it is European,” he said.  “But there is much more linkage to the Asian cultures than I expected.  Russians have a rich sense of history, similar to Asians.  They take a long view of things.”

     For agriculture, the transition from a communist to a capitalist economy has been complex. Ownership of the land was given to the farmers who worked it collectively during Soviet times. But records are incomplete and actual title to the land is often in dispute. That has slowed agricultural investment.

     A third of the agricultural land has lain fallow since the 1990s because of a lack of labor and capital, Bardwell explained. The land under production could yield much more than it does.  Russia lacks the necessary transportation system to get its agricultural products to market, especially transporting it to other countries, he said. The distances and the land mass are vast.

     In the long term, he said, Russia needs to develop ways to bring higher value to its agricultural products – to turn barley and corn into chicken that can be boned, frozen and shipped to a waiting market in China.

     “The opportunity is there and progress is being made,” he said.  “But it is still a tremendous challenge.”

     In seven years, John Deere has expanded its dealers in Russia from three to 13.  The number potentially can grow to between 15 and 20, Bardwell said, and eventually the company will be represented even in the Far East. 

     Most of the equipment Deere sells in Russia is built elsewhere and shipped to Russia at great cost because much of the machinery is so large. With so many different types of machinery, however, the company has to weigh carefully whether the demand is great enough to warrant building a factory to construct any single piece.

     “We have crossed that threshold with seeders, and we have a plant in Orenburg,” Barnwell said. “We are close to that point with tractors.  We pride ourselves on being able to provide customers with a full array of integrated solutions to their farming needs.  But no one country has a large enough demand for us to manufacture all of our equipment there.”

     The Russian government wants to expand manufacturing in the country, so John Deere is getting support for investing in new factories, he said. The company has construction of a $70 million spare parts and training center underway in the Kaluga region about 50 miles southwest of Moscow. And it is looking at sites for another manufacturing plant.

     “If we can get the volume of business to support a manufacturing plant, we want to build it,” Bardwell said.  “The amount we can save building equipment in Russia rather than shipping it across the globe already assembled would cover a significant part of the cost of that factory.”

     Expansion of agriculture and forestry production, he believes, could be the engine that drives Russia out of the economic downturn and provides a more stable Russian economy that is not so dependent on petroleum.

     “The potential for agriculture is beginning to be understood here in the past couple of years,” Bardwell said.  “I am hopeful that understanding will continue to grow.”


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