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Montevideo, November 17th 2018 - 11:01 UTC

Brazil's 'corrupt' government hurting business and agriculture, says Agco CEO

Friday, February 5th 2016 - 07:46 UTC
Full article 14 comments
Martin Richenhagen, chairman and CEO of Agco, manufacturer of Fendt, Massey Ferguson and Valtra machinery, claimed “politicians right now don't listen” Martin Richenhagen, chairman and CEO of Agco, manufacturer of Fendt, Massey Ferguson and Valtra machinery, claimed “politicians right now don't listen”

Brazil's “corrupt” government is hurting the country's business sector, including in agriculture, the head of one of the world's biggest tractor-makers said. Martin Richenhagen, chairman and CEO of Agco, manufacturer of Fendt, Massey Ferguson and Valtra machinery, claimed he tried, and failed, to persuade Brazil's government to speed up the payment of agriculture support programs used by farmers for funding equipment purchases.

 “We tried to lobby. Politicians right now don't listen,” Richenhagen told investors.

Agco was “not satisfied… at all” with the payment performance of the government, which last June unveiled a $60bn harvest plan for 2015-16 offering a cocktail of support packages, including low interest loans.

He added that “the government in Brazil is in very bad shape. They don't know what they are doing. They don't have a strategy. They are corrupt, and this is damaging not only our business, but business in general.”

The comments by Mr Richenhagen – a multi-linguist, who is a graduate of Paris's Sorbonne as well as the University of Bonn, and chef d'equipe of the German dressage team which won a gold medal at the 2008 Beijing Olympics – followed Agco's release of results which sent its shares tumbling.

While a fall in profits for the October-to-December quarter was in line with market expectations, it disappointed investors with guidance of earnings per share of $2.30 for this year, and a forecast that “difficult global industry conditions [will] persist through 2016”.

The profits tumble in the latest quarter was led by a sharp deterioration in the South American market, where industry tractor sales volumes in Brazil tumbled by 40%.

“Industry retail sales in South America were extremely weak, resulting from political uncertainty, or you could call it catastrophe, and a depressed general economy in Brazil,” Mr. Richenhagen said, also flagging “disruption” in processing loans to farmers.

The group forecast a decline of 10-15% in South America's agricultural machinery market this year.

“Political instability, economic weakness, and uncertainty on the funding levels of the government-subsidized financing programs in Brazil are expected to contribute to the weaker South American industry demand forecast in 2016,” Andy Beck, the Agco chief financial officer, said.

Categories: Politics, Brazil.

Top Comments

Disclaimer & comment rules
  • L0B0MAL

    The unending farce of the “investigations” is going on endlessly and will ultimately boil down to NOTHING [either due to the lack of concrete evidence OR due to some legal-loopholes (which are knowingly created by the law-makers themselves to protect the corrupt amongst them)].

    It's sad to see that a great democracy is in the hands of such criminals and at the same time, the population is powerless / apathetic / ignorant.

    Feb 05th, 2016 - 08:12 am 0
  • Brasileiro

    This company had its thwarted interests. A large percentage of tractors sold in Brazil are financed by BNDES.

    We will work to remove the Massey Ferguson from the list of financeable products by the Brazilian government.

    If want its tractors financed that the multinational use its own resources.

    Feb 05th, 2016 - 10:52 am 0
  • L0B0MAL

    Hello, Brasileiro!

    It is obvious that each company has its own interests & objectives and each one of them must pursue the objectives to ensure the company's survival and growth.

    The question is: How useful the products / services are; to Brazil and it's population?

    As far as the agricultural & farming equipment are concerned; using such equipment, Brazil has the opportunity to grow in the domestic / international markets.

    Without making the equipment easily accessible to the farmers:
    - the supply of the farm-products will not be able to sustain the demand and
    - Brazil will surely sink further into the economic crisis.

    Don't you think so?

    Feb 05th, 2016 - 11:33 am 0
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