JSC Zvezda is creating a joint venture for the production of engines with an Italian company

By the end of 2007, St. Petersburg OJSC Zvezda intends to create a joint venture with the Italian company CRM Motori. The new joint venture will produce engines for high-speed civil vessels. With new products, Italian-St. Petersburg manufacturers intend to enter the European shipbuilding markets. Industry analysts consider the private water transport market to be very promising, and creating a joint venture with the owner of modern technologies is one of the most successful ways to master production.
JSC Zvezda signed a strategic partnership agreement with the manufacturer of diesel engines for high-speed vessels for special purposes and civil applications CRM Motori at the International Boat Show (an international exhibition of elite products of the shipbuilding industry - motor boats and luxury yachts) in Genoa, Italy, where it represented a combined stand for your products. The parties intend to formalize the joint venture by the end of 2007, by which time work plans for the new joint venture will be developed. According to the general director of Zvezda OJSC Pavel Plavnik, the parties will participate in the authorized capital of the joint venture and the budget in a ratio of 50:50, the company will be registered in St. Petersburg with representative offices in Italy and the USA. The budget of the new company for two years will be approximately €2.5 million.
JSC Zvezda is engaged in the production of light high-speed diesel engines for shipbuilding and railway transport, as well as power plants for main, backup and emergency power supply. It is part of the financial and industrial group "High-Speed Fleet" (which unites JSC "Central Design Bureau for Hydrofoils named after R. E. Alekseev", JSC "Volga Shipyard", JSC "Redan", JSC "Central Design Bureau" Neptune'", JSC "Zvezda"). The key export markets of Zvezda OJSC are the countries of East and Southeast Asia, India, the countries of the Middle East and North Africa. The share of exports in 2006 was 36% of total sales. The main export item is marine products. For 2008, sales volume is expected to be 1.4 billion rubles.
As the press service of JSC Zvezda told Kommersant, the joint venture will be created primarily to modernize marine diesel engines of size 16/17 in accordance with the requirements of the International Maritime Organization IMO and environmental standards of the international Marpol convention. The company will use the production facilities of both parties. It is also planned to expand the product line and make changes to the design of engines produced today. “At the moment, the main limiting factor in the promotion of our products to the European market is the inconsistency, in particular of large radial engines, with the environmental standards of European buyers,” explained the press service of Zvezda OJSC. By creating a joint venture, St. Petersburg engine builders intend to adopt Italian technologies in the production of engines and gearboxes, improving their technical and economic indicators, as well as master the production of 15/18 size engines from CRM Motori.
In Russia, Zvezda is the only manufacturer of diesel engines for high-speed water transport. Until now, the plant's engines have not been presented in Europe. The company plans to enter the markets of Europe and the USA. “In the yachting business alone, the global production volume is about 1 thousand ships per year, that is, 2 thousand ship engines. We are claiming a share in this market,” says Mr. Plavnik. Industry analyst at Energocapital Investment Company Denis Demin agrees with the prospects of the market. “The market for foreign private water transport, including high-speed (boats, yachts, small ships), is actively growing. To enter it, a Russian manufacturer needs to bring the quality of ship components to the technical standards and requirements of European ship manufacturers,” says the analyst. “And in In this case, the creation of a joint venture on the basis of Russian capacities using European production technologies is a very common move for mechanical engineering in general. The technical reserve of Russian defense enterprises is ready to create components for imported products.” Mr. Demin believes that the modernized engines will be produced under the Italian brand. Zvezda stated that the issue with the brand has not yet been resolved.
Irina Bychina

Newspaper "Kommersant St. Petersburg" No. 191 dated 10/18/2007, p. 2

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