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№ 4 (April 2008)

Komatsu Sites New Plant in Yaroslavl

An investment agreement was signed by Komatsu Group and the regional administration of Yaroslavl in late February. According to the agreements, the Japanese company is to construct an assembly plant for construction equipment and forklifts in Yaroslavl region

By Yagmur Kurbanov

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This will be the 47th production facility among the Komatsu Group plants; besides, it will be the first assembly plant in Russia. During the signing procedure the Komatsu CIS Ltd. chairman of the board Masao Fujita, noted that this was, “by all means, a breakthrough and a trial step of Komatsu in Russia.”
It should be added that Komatsu is already a participant in a joint venture KRANEKS that produces metalware and metal constructions. The enterprise is located in Ivanovo and has been operating since 1998.

Fujita added that the history of Komatsu in Russia is almost “40 years of work experience since as early as 1969 which marked the start of supplies of special Komatsu mining equipment and construction of pipelines for the USSR oil and gas industry.”  

Before making a final decision to sign the agreement Komatsu examined and made some market research in nine different regions of Russia. Sergei Vakhrukov, governor of Yaroslavl region, believes that the fact that region was chosen means “getting tax benefits for all the pay-off period of the project for income, property, and additional land plots.” Besides, he marked the “region’s specialization” as a great advantage: machine engineering is considered the main branch of the industry here. Vakhrukov added that the administration will “accompany all the conciliations of the project on the level of Russian government.”

Komatsu Group plans to commission the plant in June, 2010 and envisages a complete production cycle for the enterprise. According to another company representative and head of Komatsu Manufacturing RUS, Tsukamoto Yasuhisa, all the operations “from welding works to special equipment assembly will be done at the plant”.

Fujita announced that the capital invested in the plant will amount to about $70 million and the investments in equipment – about $53 million”; it will be 100-percent  Komatsu funds. Overall number of employees, rated at full production capacity, will be about 500 people. It is planned to involve qualified workers among the local residents and from other Russian regions.

Full production capacity of the plant envisages a yearly production of up to 7,000 forklifts and about 3,000 of excavators. Fujita noted that at the first stage it is planned to produce “20-ton excavators and further start the production of 30- and 40-ton construction equipment”. The products will be, as he plans, supplied for the needs of domestic market and also to CIS countries and, probably, Eastern Europe.

The company’s experts believe that the Russian market is particularly attractive in terms of construction equipment. For instance, in 2007 the demand for excavators in Russia grew 15-fold as compared to 2002; last year the overall amount was 5,600 units of special equipment. A rapid growth of demand for construction equipment is due to the boom in housing construction in Russia and also in the real sector of the economy, particularly the oil and gas industry.

Fujita noted in an interview for OGE that “the company is already supplying large excavators and pipelayers for the construction of pipelines by Transneft and Gazprom.” He noted that the “company’s share in pipelayer import to Russia amounts to 60 percent, and the company intends to develop the supplies of this kind of special equipment in future.” The company’s experts add that complex special equipment of Komatsu is used in exploration of Yamal and Khanty-Mansi area fields, as well as in a few Far East ports.

In the answer to the OGE's question concerning the possibilities of producing complex special equipment for the oil and gas sector at the new Yaroslavl region enterprise, Yasuhisa said that producing this special equipment requires “more complex engineering, technical and construction specifics.” Komatsu currently produces this equipment at its plants in Japan, U.S. and Western Europe.
He also believes that initially “it is necessary to commission the plant and start the planned production; then it’s possible to consider the possibility of allocating new facilities for the production of complex special equipment.” As Yasuhisa added, “The company intends to manufacture construction equipment and the „made in Yaroslavl region“ products at the plant for 50-100 years.”

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