Joint Venture of KAMAZ & Cummins

24 January 2006, Naberezhnye Chelny, Russian Federation. Steven Chapmen, Vice-President of “Cummins Inc.” and Irek Gumerov, Deputy Director General of KAMAZ Inc. on components, signed constituent instruments about establishing “Cummins Kama” joint venture for assembly of B series (120-175 h.p.) engines for Russian market.

“Cummins Kama” is a joint venture with USD 20 million of authorized capital. Each company has a 50% share in the authorized capital. As per experts’ opinion Russian market capacity on B series engines exceeds 100 000 units per year. Nevertheless, both parties are faced a difficult task: a price should meet customer’s expectations, and there should be developed a local delivery center. Along with KAMAZ Inc. truck and bus manufacturers from Russia, Belorussia, Ukraine and Kazakhstan can also become the new company’s customers.

Production of B series engines will be located on KAMAZ premises in Naberezhnye Chelny, (Tatarstan). Joint venture program planned by “Cummins Inc.” and KAMAZ Inc. foresees introduction of advanced ecological standards and two stages of project realization. Alongside engine assembly, “Cummins” and KAMAZ are intended to develop service actively. Thus, “Cummins” will get access to the biggest dealer and service net on the RF and CIS territory and at the same time KAMAZ dealers will improve technology on engines servicing.

Tim Solso, a Chairman of Board of Directors of “Cummins Inc.”:

“Joint venture will be decisive for “Cummins Inc.” if it enters Russian and CIS markets in a status of a local manufacturer. In its turn KAMAZ will gain access to new manufacturing technology and occupy a new niche on Russian engine market where it has not been introduced before.”

Sergey Kogoghin, Director General of KAMAZ Inc.:

“Two years ago KAMAZ has developed and introduced on the market a new family of vehicles and was the first to present its basic medium range KAMAZ-4308 truck of 5,5 t payload powered with “Cummins” engine. Its popularity was beyond of our expectations. It was more due to the engine that improved the vehicle’s maneuverability and lowered fuel consumption. This made us speed up the process of “Cummins” assembly establishing in Russia. In 2006 we plan to open a number of new joint ventures with the world leading manufacturers on production of main vehicle components.”

Wednesday, 25 January 2006