CNH Global NV and Russia's OJSC KAMAZ last week announced that they finalized their agreement for a commercial joint venture. This follows and completes the industrial partnership sealed last March, and forms a new alliance that has the resources, technology and distribution network required to support Russian customers more effectively with agricultural and construction machinery.
The commercial agreement was signed in Moscow by Franco Fusignani, CNH International CEO, and Sergey Kogogin, general director of OJSC KAMAZ.
The new company, CNH-KAMAZ Commercial BV, of which CNH will hold a 51-percent share and KAMAZ the remaining 49 percent, will distribute and service agricultural and construction equipment in the Russian Federation. CNH-KAMAZ Commercial will begin operations immediately.
A preliminary agreement on the partnership was signed in October 2009 followed on March 22 with the finalization of the related industrial joint venture to produce agricultural and construction equipment at the Naberezhnye Chelny plant, in the Republic of Tatarstan. Stretching over a total area of more than 50,000 square meters, the facility benefits from an initial investment of $70 million to install an annual production capacity of 4,000 units, which will include tractors, combine harvesters and backhoe loaders.
Assembly of New Holland Agriculture tractor models and combine harvesters has already started at the Naberezhnye Chelny factory.
Within the new commercial joint venture, CNH and KAMAZ have agreed to take advantage of their well-established distribution networks in order to further strengthen their presence in the market.
CNH-KAMAZ Commercial, with its operations based in Moscow, will market and sell in the Russian market all New Holland locally produced and imported agricultural and construction equipment. CNH will provide the technology and know-how for commercial operations, including engineering support and counseling activities to ensure the venture meets CNH's global quality standards.
"This is a significant day not only for our companies but for the agricultural and construction equipment industry in Russia,” said Fusignani. “The alliance with a partner as important as KAMAZ, a leading manufacturer in Russia, strengthens our strategy to establish a direct presence in a market that has enormous potential for growth. The Russian market is a priority for us and this partnership brings us closer to our customers.”
CNH Global N.V. is a majority-owned subsidiary of Fiat S.p.A. CNH operations in Russia date back to 1907. Since then, the company has continued to strengthen its presence, with the opening of the first Moscow-based offices in 1998, as well as the development of a widespread distribution network. At the beginning of 2009, CNH opened a new spare parts depot center near Moscow.
OJSC KAMAZ is the largest Russian manufacturer of heavy-duty trucks.