CLAAS, German machinery manufacturer, will invest € 6.6 million in the coming years in the development of its plant in the Krasnodar territory. Thus, the company will expand the localization of agricultural machinery production, a representative of the regional department for investments and development of small and medium-sized businesses said on Wednesday.
German CLAAS producing agricultural machinery may invest in its business development up to 2.5 bln rubles within 10 coming years. This was reported by the vice-governor of the Krasnodar Territory Sergey Altukhov.
According to the Industrial Development Fund, the Interdepartmental Commission of the Ministry of Industry and Trade approved the conclusion of a special investment contract (SPIC) with the German manufacturer of farm machinery Claas, according to which the company will locate the production of combine harvesters in Krasnodar, by investing additionally 750 million rubles. Claas built the plant in 2005 and has already invested 150 million euros.
Among the plans of CLAAS there is increasing of the amount of assemblies of combine harvesters, which will be produced at the plant in Krasnodar, up to 700 items, 600 items more will be bought from other Russian companies. At the moment only five suppliers of the enterprise out of 45 are located outside the Russian Federation.
With the new capacity in place, the facility will double its output and raise its localization level to 50%. In its bid to expand its production facilities in Russia, Claas relies on new forms of government support, while those currently available are described as ‘difficult to access’ by Claas’ Krasnodar-based subsidiary. According to experts, the availability of in-house manufacturing facilities in Russia is a considerable driving factor for the local presence of foreign agricultural equipment producers.
As she presented the second plant of the Krasnodar agricultural equipment manufacturing facility to journalists, Supervisory Board Chairwoman of Germany’s Claas Cathrina Claas-Muehlhaeuser said that with the new capacity commissioned, the facility will become Claas’ fourth largest worldwide and Europe’s most cutting-edge agricultural equipment production plant. “With its 120m hectares of agricultural land, Russia is seen a major market offering sound growth potential,” Ms Claas-Muehlhaeuser said. She noted that the company moved one step at a time to win over the Russian market acting through dealerships first, then proceeding to open an assembly plant, and finally resolving to expand the project in 2008.
Investment in the first plant at the site amounted to EUR 20m, while the expansion project required an additional EUR 120m. Since its launch in 2005, the facility has produced 4,500 mobile agricultural machinery units (its current product range including nine combine harvester and eight tractor models). The second plant of the facility handles the entire production cycle including such operations as laser metal cutting, forming, welding, pre-treatment and coating. As a result, the facility’s total floor space increased by a factor of nine, while output is projected to reach 2,500 machinery units a year.
The company expects to reach a localization level of 50% making it eligible for the federal subsidy program for combine harvester producers.
“We are ranked first in Russia among western producers, with our share of the local sales by western producers at 40%. As we expand, we are eyeing the Eurasian market as a whole, which now equals 8,000 equipment units a year. With a capacity of 2,500 units a year, you can assess our share for yourself,” Jan-Hendrik Mohr, Claas Executive Board member responsible for the sales division, said.
The German agricultural machinery producer Claas will commission the second stage of the plant in Krasnodar in late October this year. The project investments in the amount of 120 mln euro will be made by the end of 2015. This fact was announced by Mr. Ralf Bendisch, Claas General Director.
According to Mr. Bendisch, initially the new production was to open about 3,000 new jobs. “At present, we’re planning on 2,500 jobs, however, we are ready to increase this number up to 5,000,” stated the General Director of Claas.