Daedong closes China factory, bets W80b on AI farm equipment hub in Daegu

Agricultural machinery maker Daedong said it held a site visit and roundtable with the Ministry of Trade, Industry and Energy at its Daegu factory on Thursday to promote regional investment and strengthen manufacturing competitiveness among companies reshoring to South Korea.

Kang Gam-chan, director general for trade and investment at the ministry, led a delegation that included officials from the ministry, Daegu city, KOTRA and the Korea Industrial Complex Corp. Daedong was represented by Executive Vice President Kwon Ki-jae, who oversees product development and production, and factory manager Hwang Tae-won. Representatives from reshoring companies in Daegu and North Gyeongsang Province — including Isupetasys, Iljin and Guyoung Technology — also attended. The ministry also inspected the local operations of Valeo Mobility Korea, a foreign-invested company, that day.

Participants heard Daedong's plans for its return to domestic production, toured the tractor assembly floor and discussed obstacles in the investment process along with potential support measures. Daedong is winding down its Chinese manufacturing base, which has become unprofitable, and restructuring production around the Daegu factory.

Daedong produces major farm equipment — including tractors, combine harvesters and rice transplanters — domestically, with the Daegu factory serving as its core hub. The plant currently has an annual tractor production capacity of about 30,000 units. The company plans to invest about 80 billion won ($56.5 million) to replace aging equipment at its factory in Dalseong-gun, Daegu, fitting it with AI-enabled systems and raising tractor output capacity to as many as 48,000 units a year.

Earnings have been trending upward. Daedong said Monday that its consolidated preliminary results for the first half of 2026 showed sales of 844.8 billion won and operating profit of 47.3 billion won, up 5.4 percent and 0.9 percent, respectively, from the same period a year earlier. Last year, exports accounted for about 70 percent of its standalone sales of 863.2 billion won.

The roundtable also addressed the need to expand support for manufacturing innovation investment by reshoring companies, provide tailored consulting and strengthen coordination across government policies and programs. The government currently offers reshoring companies subsidies covering up to 57 percent of total investment, depending on the industry and investment location.

"This return to domestic production is an investment to raise the manufacturing competitiveness of the Daegu factory to the next level and strengthen the foundation for future farm equipment production," said Kwon Ki-jae, Daedong's executive vice president for product development and production. "We will work closely with the government, Daegu city and other relevant agencies to carry out the reshoring without a hitch and develop the Daegu factory into a core hub for future agricultural machinery production."