AGCO, the world's third biggest agricultural equipment maker, said on Wednesday it would invest 100 million U.S. dollars in China in the next three to five years to boost its presence in the emerging market.

The company will open two factories in China next year, one in the eastern city of Changzhou making low and medium-powered tractors, generators and transmissions and the other in the northeastern Heilongjiang Province producing high-powered tractors, combines and balers.

"The growing population and the shrinking arable land demand better mechanization in the agriculture sector. The demand in China will increase significantly over the next years," said Hubertus M. Muhlhauser, the company's senior vice president at a press conference.

He said the subsidy offered by the Chinese government for the farmers which topped 13 billion yuan (1.91 billion U.S. dollars) this year would also facilitate the company's expansion.

The Georgia-based company was founded in 1990 and offers a wide range of agricultural utilities including tractors, combines and sprayers. In 2008, its sales revenue was 8.4 billion U.S. dollars.