Daedong pulls out of China, launches AX scale-up at Daegu factory

Daedong is closing its China factory and scaling up domestic production, committing 80 billion won ($57 million) to expand its Daegu factory's production lines and launch a manufacturing AX initiative.

The company signed an MOU with the Daegu Metropolitan City government on Thursday covering its return to domestic production and the factory AX investment.

Under a "Daegu Factory Manufacturing AX Master Plan," Daedong will restructure its production and logistics operations, build new AX production lines and convert existing lines to AX by 2029. The company also plans to establish a data- and AI-based operating system.

Of the 80 billion won earmarked for the Daegu factory expansion, nearly half will come from government support. Daedong has operated a factory in China's Anhui Province since 2010, but competitive pressures prompted its withdrawal. The company was designated this year as a "U-turn enterprise" for the third time, making it eligible for government reshoring subsidies.

The Daegu factory produces tractors, combine harvesters and rice transplanters. Current capacity stands at about 30,000 tractors per year. Once the expansion is complete, that figure will rise to 48,000 units annually, a 60 percent increase.

The centerpiece of the manufacturing AX drive is automating repetitive and physically demanding tasks using AI and robots. Production, quality and logistics data will be integrated and analyzed by AI to improve productivity and manufacturing flexibility. The Daegu factory produces tractors in more than 200 specifications for export to 70 countries, and the company says it needs a production system capable of keeping pace with product advancement and market diversification.

"We will develop the Daegu factory into a standard model for manufacturing AX and a core production base for future agricultural machinery," Daedong Vice Chairman Won Yu-hyun said at the signing ceremony.