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Production of shutoff and control valves

Project at-a-glance

Project highlights
Project indicators
Investment target and overview
Production of shutoff and control valves for aggressive and highly corrosive environments with high pressure and temperature values – downhole and wellhead equipment (28.92.1 ); pipeline shutoff valves (28.14.1); pipeline control valves (28.14.1); valves for special environments (aggressive medium, high temperatures) (28.14.1)
Total required investment, USD mln
32.63
Investor's equity capital
7.5
Investor's debt capital (by sources)
17.5
Budgetary funds (guarantees)
Use of proceds
New construction
Yes
Renovation/upgrade of existing assets
No
Project design
No
Preferred investment structure
Information about co-investors (names, investment share):
Confirmed
Potential
Ratio if equity in total capital, %
23%
Project status. Available documents (yes/no)
Business idea
No
Preliminary research
Yes
Project feasibility study
Yes
Market research
Yes
Project design documentation
Yes
Financial model
Yes
Business plan
Yes
Project launch and closure, years
2014-2016
Official materials in support of the projects (decrees of either the federal or regional government, letters from local government, provision of incentives, etc.)
Key economic indicators
IRR (internal rate if return), %
30
Payback period, years
6
NPV (net present value), USD mln
8.08
Implementation status. Information
on available facilities/equipment

The project will be implemented in stages:
1. R&D efforts, whether independent or with involvement of oil and gas companies.
2. Development and engineering and process documentation for new products.
3. Preparation and deployment of new products in production operations.
4. Sale of products.

1. Delivery of R&D work related to new products under the import phase-out programme. The work is 25% complete, with completion date in mid-2016. Started in June 2014 and is being delivered by ZAO KONAR independently. Delivered with the help of leading design institutes: LLC Lengiproneftekhim and ZAO Neftekhimproekt.
2. Development of engineering and process documentation – to complete in July 2016. Started in June 2014. Delivered by ZAO KONAR with the help of affiliated design institute LLC TsNIPI STARK.
3. Preparation for production – contracts concluded for new mechanical processing and testing equipment TREVISAN, PAMА SPEEDRAM, Pietro Carnaghi, Messer OmniMat, Pemameck, MOTOMAN and PROTEUS; delivery period is 1Q 2015 – 2Q 2015.
4. Construction and development of new production capacities – started in 3Q 2014 and is to complete in 3Q 2015.
5. Startup of production operations and manufacture of products – mid-2016.
6. Sale of products – contracts concluded for the supply of pilot batches of products to two oil companies.

Comments

Proven experience of delivering major investment projects includes:

- in R&D domain – scientific research, designing, manufacture and supply of pipeline supports and heat stabilizers for a trunk oil pipeline construction project Zapolyarnoye-Purpe.

Volume of sales to the project – 18 bln RUB.

- in establishment of production enterprises – Russia-Italian joint venture LLC BVK producing case mouldings of premium quality unparalleled in the RF.

- in import phase-out domain – establishment of production facility manufacturing gate valves with DN 1200 or smaller under Transneft’s import phase-out programme with gradual localization of production volume from 10% to current 100% over a period of 4 years.

Current business capacity is 4 bln RUB per year.

Chelyabinsk, Yeniseyskaya St. 8-52

Overall area of land parcels is 203 ha (20 parcels). Overall area of production spaces, storage rooms and offices is around 629,615.8 sqm. Property is owned by KONAR Industrial Group.

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Project ID01/78/15

Region of Russian Federation, Area
Chelyabinsk Region
Sector
Machinery, Equipment & Components
Parent company/shareholder
ZAO KONAR
Legal address of the shareholder, website

454091, Chelyabinsk, Pr. Lenina 4b

Position, full name of the CEO
of the shareholder
Valery Vyacheslavovich Bondarenko, CEO
Contact person, telephone number
Valery Vyacheslavovich Bondarenko, CEO, Tel.: +7 351 775-10-64, Fax: +7 351 775-10-65, E-mail: ref@konar.ru
Last update
15.06.2015
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