Hi. My name is Willy Janzen. Thank you for the opportunity to do this presentation.
I'm going to talk a little bit about the history of Bühler Industries. It's publicly traded and has been since 1994, when it was listed on the Toronto Stock Exchange. Last year we had sales of $344 million. Sales in the geographic regions of the United States were at 51%. Canada was at 34%. Russia, Kazakhstan, and Ukraine were at 12%, and others at 3%. Bühler Industries employs over 1,100 staff, primarily in Canada, and spent $8.5 million in R and D in 2013.
Bühler Versatile, which the inquiry was made to, is a wholly-owned subsidiary of Bühler Industries. Versatile manufactures both the four-wheel-drive tractors and the row-crop tractors and has manufactured over 100,000 tractors since 1965. Versatile was purchased in 2000 from Case New Holland. Prior to the acquisition, Versatile exported thousands of row-crop tractors to the European Union market. Canada had a testing site for EU certification in the past, but no longer does. We have issues in exporting to the EU, so we don't specifically.... Although we are working with regard to exporting to the EU right now, we have some issues that we are currently addressing.
Today, Canada has no certification site for tractors to be shipped to the EU market. We're working with a company in the United Kingdom and in the United States to complete the certification process. This cost is estimated at $200,000. There is no additional certification cost that we are aware of when shipping tractors from the EU to Canada. The EU testing and report process is expected to last several months. Witnesses from Europe will need to fly to Canada to witness the tractors and ensure that they're fully functional based on European standards. Once all the reports are complete, the tractors will need to pass certification in Europe, so we'll have to send the tractors to a European state for the completion of certification.
Due to the certification process, some of the changes we are working on are as follows.
There are changes to lighting for on-road transportation from field to field. There are no issues once the tractors are in the fields, but there are issues when they're on road.
There are changes to braking, as the EU requires the brake on the final drive, which means that the brakes will need to be relocated to each of the wheel hubs. Currently, the brakes are actually designed to stop the drive shaft. This is accepted anywhere in the world but the EU.
Finally, changes to the steering are required as a result of the on-road transportation requirements. The tractor needs to be redesigned to meet certain power off steering requirements. If the engine stops, the tractor must be able to complete a 360-degree circle. Again, these are not requirements in any of the other countries that we have shipped to.
In addition to the changes above, decals and manuals need to be added, of course, which we would expect.
Also, Canada recently passed legislation requiring tractors and construction machinery to move to the new tier 4 final engine emissions standards. Canada allows 750 tractors to be imported that are not compliant with the new engine. They have copied the United States legislation, which also allows the import of 750 non-compliant tractors. The EU only allows for an import of 50 non-compliant tractors instead of the 750 allowed by Canada. The non-compliant engine is at a tier 4 interim level, which the EU calls stage IIIB. The fully compliant engine is a tier 4 final in North America and is called stage IV in the EU.
Versatile recently has shown its tractors at the 2103 Agritechnica show in Hanover, Germany, for the first time, which generated a lot of interest in its tractors, and today we are working towards a solution in starting to be able to ship tractors to the EU. As you see, tractors that we manufacture right now are exported to the United States, Africa, Australia, and China, but I left out Ukraine, Kazakhstan, and Russia. Most recently, we have had some orders into Romania, which we have not yet shipped.
I'm available for questions at the end of this session. Thank you.