Agro Perspectiva

CNH and KAMAZ Announce Industrial Joint Venture in Russia

23.03.2010 12:10 "Agro Perspectiva" (Kyiv) — CNH Global NV and OJSC KAMAZ today 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 by Sergio Marchionne, Chairman of CNH Global NV and Chief Executive Officer of Fiat S.p.A., and by Sergey Chemezov, General Director of Rostechnologii, in the presence of Vladimir Putin, Prime Minister of the Russian Federation. The new company, CNH-KAMAZ Industrial BV, will be 50% controlled by CNH with KAMAZ holding the remaining 50%. 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 a total of over 50,000 square metres and will produce machinery to supply, at first, the Russian domestic market and afterwards other CIS countries. The initial planned investments of USD 70 million will serve to install an annual production capacity of 4,000 units, including a 300 horsepower combine family, two ranges of tractors in the 300–535 HP segment and construction machinery. «With this JV we aim to significantly increase our operations in Russia. 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» said Franco Fusignani, Chief Executive Officer of CNH International SA. Sergey Kogogin, General Director of OJSC KAMAZ, 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 the 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. Agricultural and construction machinery, in accordance with CNH’s global know how and quality standards, will enter into production 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 JV 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 (FAS).