11 September 2018, 16:59 / Business

Kamaz will produce engines for ships

The partner in the project will be the Chinese Weichai Power Co. Vladimir Shtanov Alexander Vorobyov

Chairman of the Board of Weichai Power Tan Xuguang and General Director of Kamaz Sergey Kogogin / Alexander Ryumin / host photo agency TASS

Kamaz is creating with the Chinese Weichai Power Co. Ltd. joint venture (JV) for the production of industrial engines. The partners' shares will be equal - 50:50.

The agreement to create the Kamaz Weichai joint venture was signed on September 11 at the Eastern Economic Forum.

The new production will be located in the Yaroslavl region, on the free space of Kamaz’s subsidiary, the Tutaevsky Motor Plant. The joint venture will begin operating before the end of this year. It will produce several types of diesel engines with a volume of more than 17 liters and a power of 520 kW, says a Kamaz representative. Localization will increase as production develops, he adds.

Kamaz already has a partner - Kama-energetics, which produces diesel and gas power plants based on medium-power Kamaz engines, but there are no technologies for producing high-power engines, recalls General Director of Infoline-Analytics Mikhail Burmistrov.

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For the Tutaevsky plant, this project is an entry into new markets, a Kamaz representative confirms. The new motors are suitable for shipbuilding, locomotive construction, electric generators, and heavy-duty special equipment. The motors are planned to be sold in the CIS countries and the Eurasian Economic Union. At the first stage, the main consumers of new products will be shipyards that produce boats. Preliminary negotiations have already taken place, a Kamaz representative clarified. He did not disclose the names of the factories.

“If the new joint venture produces marine engines that have all the necessary certificates of the Russian river and sea registers, are in demand by ship customers and meet their technical requirements and operational characteristics, then USC is ready to consider this manufacturer as one of the suppliers of the relevant equipment,” says the representative United Shipbuilding Corporation.

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Chinese President Xi Jinping, Russian President Vladimir Putin

/ Evgeny Razumny / Vedomosti

The Kamaz representative explains the choice of partner by the fact that Weichai Power is one of the world's largest manufacturers of engines (diesel and gas), axles, gearboxes, etc. Kamaz does not purchase his products, but has tested them, the source says.

The capacity and size of investments in the joint venture are not disclosed. According to a Vedomosti source familiar with the negotiations, the enterprise will be capable of producing more than 1,000 engines per year, and investments will amount to several billion rubles. Interfax, with reference to the Governor of the Yaroslavl Region, Dmitry Mironov, reported that investments in the first stage of the project will amount to 800 million rubles. For comparison: in 2017, the Tutaevsky Motor Plant received 152 million rubles in 2017. net profit with revenue of 3.2 billion rubles.

“Localization of production on the basis of the Tutaevsky Motor Plant will significantly optimize investments in the project, reducing them to $50-60 million, as well as speed up the commissioning of capacities through the phased deployment of technological lines,” says Burmistrov.

The joint venture also plans to apply for the status of a resident of the Tutaev territory of rapid socio-economic development, follows from the Kamaz message. It was created in 2017. Its residents have tax benefits, including zero property and profit tax rates for the first five years (later rates will be 1.1% and 12%, respectively), follows from the information posted on local administration website.

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