China-based Jiangsu Baoli and Xi`an Aircraft are poised to invest $200m into a facility to produce short-haul Ma600 aircraft with a xapaxity of 50 planes a year in Komsomolsk-on-Amur.
The Chinese Jiangsu Baoli International Investment and Xi`an Aircraft Industrial Corporation (AIC) have signed an agreement to set up an assembly plant for Ma600 turboprop airliners and their components in the Komsomolsk-on-Amur priority development area with the Ministry for the Development of the Russian Far East. The plant’s capacity is projected at 50 planes. Jiangsu Baoli (provides the financing) estimates the initial investment in the project at roughly $200m, while AIC will contribute technology and gain control over the joint venture. According to Minister Alexander Galushka, the Chinese companies found the Komsomolsk-on-Amur priority development area appealing because of tax reliefs and depreciating rouble. According to the minister, the financial and economic model of the project will be completed by 30 October. President Jiangsu Baoli Zhou Dehong specified, that at the first stage, the joint venture will only be assigned “final assembly operations” to later expand to component production.
Ma600 is a narrow-body twin-engine 60-seat turboprop regional passenger aircraft designed based on An-24. Since 2000, some 80 Ma60 (previous version) and 4 Ma600 jets have been produced.
Jiangsu Baoli controls over 30% of the bituminous mixtures market in China, with its assets estimated at 2.36bn yuan (now $370m), and net assets at 1.63bn yuan (now $260m) at the end of 2014. The state-run Xi`an Aircraft Industrial Corporation controls over 57% of shares in Xi`an AIC. AIC’s total assets amount to 17bn yuan ($2.7bn), with net assets at 9.8m yuan ($1.54bn).
As Commercial Director at Baolirus International Investments, a Russian subsidiary of Jiangsu Baoli, Yelena Yevseyeva told Kommersant, the management of the Chinese company decided to pursue international investments and financial leasing. Baoli already runs a project in Russia: it signed a memorandum on the construction of a $50m bituminous products plant in the Khabarovsk priority area development with the Ministry for the Development of the Russian Far East in spring. In a few years to come, Jiangsu Baoli is planning to invest up to $2bn in projects in Russia. As Ms Yevseyeva elaborated for Kommersant, the new plant will be assembling not only aircraft, but its components (engines and titanium elements) in the longer run. Jiangsu Baoli sees Rostec as the most likely and desirable partner, and while the parties are still in talks, no specific agreements have been reached. (Rostec was not immediately available for comments when approached by Kommersant). Yelena Yevseyeva noted that construction could be launched in 2016 with production to start a year and a half later, but no specific timeline will be available until the financial and economic model is completed in October. The aircraft are expected to be delivered to China and other countries, possibly, even Russia.
Contact: Mr. Gao Dacheng, Chairman and General Director
Xi`an Aircraft is the Chinese producer of civilian and military airplanes being part of the Aviation Industry Corporation of China (AVIC) holding. Its major production facilities are located in Shaanxi, central China.