CNH Global NV and OJSC Kamaz last week finalized their agreement to jointly manufacture agricultural and construction equipment in the Russian Federation. The accord was signed by Franco Fusignani, CEO of CNH International SA, and Alessandro Nasi, CNH senior vice president of business development, Sergey Kogogin, general director of OJSC Kamaz, and Timur Nuriakhmetov, general director of CNH-Kamaz Industry LLC, during an official ceremony held at the CNH International headquarters in Lugano, Switzerland.
This follows the preliminary agreement signed in October 2009.
The new company, CNH-Kamaz Industrial BV, will be 50-percent controlled by CNH with Kamaz holding the remaining 50 percent. Its manufacturing operations will be based in Naberezhnye Chelny, where Kamaz has its headquarters, located 1,000 kilometers east of Moscow in the Republic of Tatarstan. The production site will cover more than 50,000 square meters and will produce machinery to supply, at first, the Russian domestic market and afterwards other CIS countries. The initial planned investments of U.S. $70 million will serve to install an annual production capacity of 4,000 units, including a 300-hp combine family, two ranges of tractors in the 300 to 535-hp segment and construction machinery.
“With this JV we aim to significantly increase our operations in Russia,” said Fusignani. “We expect this alliance to foster improved local economic activity, through CNH’s advanced technology, and increased productivity in one of the world’s most important markets.”
Kogogin added, “We have started realizing our common plans. The Russian users of agricultural and construction equipment will soon be able to purchase CNH’s high-quality and high-tech equipment produced at our JV in Russia.”
According to terms of the agreement, CNH will make available certain New Holland models and technologies, and will integrate the Naberezhnye Chelny plant into its global manufacturing network. Initially, CNH will focus on the production of its New Holland Agriculture and New Holland Construction brands’ models, also including components and implements. Production will begin immediately for the agricultural equipment models, and by end of the year for the New Holland Construction backhoe loaders.
The new plant will be operative in the fourth quarter of 2010, but the first units will start to be assembled in April 2010.
A related commercial joint venture between the two companies for the marketing and the distribution of equipment is to be formed in the next few months. Completion of linked transactions is subject to prior regulatory approval of the Russian Federal Antimonopoly Service.
CNH Global N.V. is a leader in the agricultural and construction equipment businesses. Supported by more than 11,600 dealers in 170 countries, CNH brings together the Case and New Holland brand families with the resources of its worldwide commercial, industrial, product support and finance organizations.
OJSC Kamaz is the largest Russian manufacturer of heavy-duty trucks from 14 to 40 tonnes.
