By Lawrence Bivins
Mike Blount rattles off a list of reasons why the shiny blue farm vehicles assembled and sold by LS Tractor USA offer better value than the competition. “Features that are standard in our products are things our competitors charge extra for,” says Blount, chief executive officer at the company, which is headquartered in Battleboro. “And our warrantees are better than the industry average.”
The company’s tractors come in all sizes, with sub-compact models built for relatively modest tasks like mowing and snow removal, and heavy-duty models designed to serve cattle ranches, orchards and vineyards. Common to all is an attractive price-tag. “We get good pricing from our parent company, and we keep a pretty flat organization,” Blount explains. The savings are passed along to customers, who range from “weekend farmers” who dabble in agriculture as a hobby to full-time agribusiness professionals. LS Tractors’ distribution system also is different. “Our business model is a pull system not a push system,” says Blount. The company sells only to dealers, working with about 350 of them across the U.S. and Canada. “Some carry our products exclusively.”
LS Tractor USA is a unit of Korea-based LS Mtron Ltd. The parent company resulted from a 2003 spin-off from electronics giant LG Group. LM Mtron holds numerous companies producing total annual revenues in the range of $30 billion. Another key element of the LS Tractor brand is rapid response to demand. Upon receipt of orders, the company’s product arrives at dealer locations, on average, seven days later, which enables dealers to maintain modest inventories. In addition to its 180,000-sq.-ft. production and warehouse operations in Battleboro, the company serves buyers from locations California, Illinois and Louisiana.
“LS Mtron consistently built customer confidence after entering the U.S. market, which became the driving force for achieving the top rank in customer satisfaction for four consecutive years,” explains Blount. “We plan to establish a solid foothold as a globally leading tractor company in the North American market through reliable products and services.”
The company’s interest in the Twin Counties stemmed from the presence of a tractor manufacturer in Tarboro known as Farmtrac. The company, which had also been a major LS Tractor dealer, went into receivership in 2008, leaving its large and well-skilled workforce up for grabs. “We were able to hire experienced people who had worked for Farmtrac,” says Dave Masters, human resources director at LS Tractor. “There was an available workforce that knew the tractor business and was available to be part of a start-up.” About 50 workers are now employed at the Battleboro facility, which supplies the company’s eastern U.S. markets.
But a uniquely qualified workforce is just one of the factor behind LS Tractor’s choice of Battleboro as its U.S. base. “The biggest advantages are transportation, access to ports and the business-friendly nature of North Carolina,” Masters says. Partially-assembled product arrives at the facility by container from ports in Norfolk and Wilmington. “There’s good proximity to East Coast ports,” he says. “And we’re on I-95, which offers us good routes for distribution.”
The formula has worked well. In August 2017, company officials announced they would expand the Battleboro operations, investing another $12 million in the facility and adding 31 employees over the following five years. “Since 2009, LS Tractor USA has become part of North Carolina and has experienced very successful growth based on collaboration with the North Carolina government and Nash County,” Director of Sales and Marketing Joey Sim said upon unveiling the plans. “LS Mtron has very strong confidence in our continuous growth and our relationship with the local community, which make them willing to increase business and investment for the future here.”
A $60,000 grant from the One North Carolina program is helping support the company’s expansion. So too is workforce development assistance from Nash Community College. “We took advantage of those programs,” says Masters, who arrived at the facility in March 2017. The college has provided training in forklift driving and workplace safety, for example. “We’re talking about other training programs now,” he says.
Masters has been impressed with the loyalty of the workforce at the Battleboro site. “This is our ninth year and we’ve turned over fewer than nine people,” he says. Better still, the company’s Korean parent is pleased with growth prospects. The facility hosts executives from Korea regularly, including three visits from LS Mtron CEO Andy Kim in the last 18 months. Several of LS Tractor USA’s own senior executives are Korean, rotating in and out of the Twin Counties on a multi-year basis. There is ample evidence to show the company’s strategy is working. LS Tractor has won the Dealer’s Choice Award in each of the past four years, and its numbers also are hitting the mark, Masters says. “We’ve grown about 30 percent per year every year we’ve been in business.”
[Lawrence Bivins is a Raleigh business writer and contributing editor of the North Carolina Economic Development Guide.]