Germany-Japan DMG Mori will start construction of the building for machine-tool suppliers in Ulyanovsk in 2018, Prime Minister of the Government of Yaroslavl Region Alexander Smekalin has told the journalists today.
Within the framework of the forum Mr. Sergei Morozov, Governor of the Ulyanovsk Region, Mr. Dirk Hullmann, Managing Director of Gildemeister Beteiligungen GmbH, and Mr. Alexei Antipin, CEO of Ulyanovsk Machine Tool Plant, have executed a special investment contract for upgrading of industrial production within the project for construction of Ulyanovsk Machine Tool Plant. According to Mr. Manturov, the upgrade provides for reaching production volume of 1.2 thousand turn-milling machines of six types per annum.
DMG Mori Seiki built the first Russian machine tool plant in Ulyanovsk with the participation of foreign companies. The company is expected to produce 1.2 thousand machines annually. An industrial park of component manufacturers will be built next to the plant, the investment of which will amount to more than 4 million euros. In the coming years the whole production chain from the design and manufacture of components to the assembly of finished machines will be concentrated there.
A machine-tool plant built by DMG Mori Seiki with an investment of more than€70 million will open in the Ulyanovsk Region onSeptember 29, the regional government’s press service told a TASS correspondent today.
“The plant will create 250 new highly paid jobs for the region’s residents”, the press service noted.
The single-shift plant will manufacture 1,200machine tools annually. The plant director Alexei Antipin has said earlier that if it operated three shifts, the plant could meetRussia’s entire demand for machine tools.
The plant will be co-located with an industrial park for manufacturers of components, in which the concern will invest more than €4 million. Over the next few years, the entire manufacturing chain will be concentrated there, from the design and manufacturing of components to the assembly of finished machine tools.
DMG is Germany’s largest manufacturer of machine tools and the world’s leading manufacturer ofCNC lathes and milling machines. In 2009 DMG entered a strategic partnership with Japan’s Mori Seiki by establishing the DMG-Mori Seiki entity. Both corporations share engineering, marketing and other resources.
DMG Mori Seiki will increase the volume of Russian components at its plant in Ulyanovsk, which is to be put into operation in September, to 84 percent by 2018, the press service of the regional industry and industrial defense complex office told a TASS correspondent.
“The localization level [of Russian components] is to total 48 percent by the end of 2015 and may reach 84 percent by 2018,” the press service said.
The office added that the enterprise will focus on domestic casting designs, cabins and transporters, fastening components, turning and milling parts as well as control cabinets. During a previous visit to Ulyanovsk, DMG Mori Seiki executive board member Christian Thönes announced that the company would increase the localization level of the concern’s suppliers in Russia to 50 percent. “One of our goals is to find Russian suppliers that would supply the concern with components for machine tools,” Thönes said.
Construction of the enterprise’s main building is currently in the final stage. More than RUB 3 billion will be invested in the project and the plant will produce up to 1,200 machine tools per year and create roughly 250 new jobs for the region’s residents. Construction of the concern’s first Russian machine tool plant began in Ulyanovsk in October 2012 and the plant is expected to reach full capacity in 2018.
DMG Mori Seiki is a major producer of machine tools in Germany and the leading manufacturer of turning and milling machine tools under computerized numerical control in the world. Starting in 2009, DMG launched a strategic partnership with Japan’s Mori Seiki and established the organization DMG Mori Seiki. The two corporations exchange engineering, marketing and other resources.
The “Localization Day” supplier conference organised by DMG Mori Seiki AG came to a close today. The event was aimed at attracting Russian and international partners to invest in the localisation of production in the region, and in Russia as a whole.
The conference is traditionally attended by companies from Russia and across the globe that are looking to invest in localization in the Ulyanovsk Region and interested in supplying parts to DMG Mori plants around the world, as well as by producers of milling and turning components, casting equipment, cabins, etc.
Over the course of two days, DMG Mori Seiki AG management held ten meetings with representatives of 25 Russian and international companies, including Siemens, Schaeffler, SKF, VNITEP and Drobmash among others. Representatives from more than 50 companies and enterprises took part in the event, which featured a presentation at the factory rented by DMG Mori Seiki AG (the Ulyanovsk Machine Tool Plant) near the Centre for Technology Transfer (Nanocentre) about the company and the Ulyanovsk Region as a potential market for setting up the company’s production facilities.
Member of the Executive Board at DMG Mori Christian Thönes commented on the prospects and opportunities for the machine tool industry in the region.
“I am extremely happy to be in Russia,” he said, “at the same time, I realise that our company will only be successful if we are able to produce added value here, on the spot, with the help of local manufacturers. At last week’s shareholder’s meeting we reiterated our commitment to making the Ulyanovsk factory a success, no matter what.”
According to Mr Thönes, localization at the plant should exceed 50%, while at the same time maintaining the highest quality German standards. By 2019, a total of nine products will be manufactured locally, with the possibility of another three being added.
“In Germany, I am often asked why we chose Ulyanovsk,” Mr Thönes explains. “And I reply: because we get the full support of the regional authorities; we are close to the market and to potential suppliers; we have a developed infrastructure in the facilities we have been provided in the Zavolzhye industrial park; there is an international airport nearby; and there is a readily available and qualified workforce in the region. All of this will help us turn the idea of creating not only a factory, but also a technology centre for developing new components, machine tool designs and, eventually, new models into a reality. What’s more, we have already filed an application with the Ulyanovsk Region Development Corporation for two adjacent land plots next to the factory.”
“I am extremely happy to be in Russia,” Mr Thönes said in his opening speech. “I am pleased that Governor Sergei Morozov has put so much energy into our joint work. Our professional cooperation has blossomed into a genuine friendship. We can feel your support – after all, Mr Morozov is taking part in the project himself. We have 22 factories around the world and employ 13,000 people. Now we will produce 1000 machine tools in Ulyanovsk. We would also like to develop a new machine tool in the region. The first eight developers we hired are working on this project as we speak.”
The company is currently putting the finishing touches on its new factory, which will be ready for operation in September 2015. But this did not stop it from launching production activities a year ago on the territory of the industrial park it was renting from the Ulyanovsk Region Development Corporation, where more than 100 machine tools have been produced so far. And the company has no plans to cancel its lease once construction of the factory is complete, as suppliers that work with DMG Mori can operate out of those facilities. Meanwhile, the group itself will buy up land next to the plots that it already owns in order to expand production. DMG Mori has big plans in the region.
“DMG Mori stands alone among investors,” Governor Sergei Morozov said. “It didn’t come to the region simply to localize the production of machine tools.
“Together, we will create a fully fledged machine tool production cluster.” And one of the company’s first moves was not to purchase a building or manufacture machine tools. Before it did anything else, DMG Mori sent representatives to schools and universities to demonstrate its equipment and to talk to students about the business and what young people studying in Ulyanovsk Region universities can get out of working with them. The company is very serious about localizing the entire production chain in the region.
“We support Russia,” Christian Thönes explained. “And together with Russia we will make this factory a success, and will not be dependent on any outside factors. Russia is one of the most important consumers of machine tools in the world. And if real industrialization is to take place your country – and it is taking place right now – then Russia will need in excess of 10,000 machine tools. I’ve still got a lot to learn about Russia, but we feel at home here in Ulyanovsk, like natives.”
Deteriorating international relations have had a knock-on effect on the country’s economy, with experts noting a drop in demand for machine tools. But DMG Mori Seiki is confident that the Ulyanovsk Region will remain relatively unaffected.
“Crises come and go,” Mr Thönes said. “The machine tool industry has always been cyclical. Despite the current economic difficulties, our management has said: ‘we are moving full steam ahead.’ We have the support of Russia, and of the Ulyanovsk Region in particular. This is why we have no reason to be scared of the political statements coming out of Europe. The difficult position that Russia currently finds itself in will only make it stronger. I am sure of this.”