Power Machines will create a joint venture in Vietnam

On September 12, in the framework of the official visit of Vietnam’s Prime Minister Nguen Tan Dung to Russia, a Russian-Vietnamese business forum took place, where Power Machines and AGRIMECO Corporation (Vietnam) signed an agreement on partnership and collaboration that envisages the creation a joint venture for the manufacture of hydro-electrical equipment in Vietnam.

The agreement provides for the creation in the Vietnamese Hung Yen province a production complex for the manufacture of small and medium capacity hydro-electrical equipment. The investment project valued approximately at USD 80 million will be realized from 2008 to 2011.

This project is aimed at the expansion of the company’s hydro-electrical business with a view to enhance its presence on traditional markets that demonstrate a significant growth dynamics, as well as at the development of collaboration with the company’s production branches in other segments.

It is expected that the main products of the joint venture will be hydro turbines and generators with a capacity of up to 150 MW, as well as disc shutters for hydro turbines. The volume of production is initially estimated as 10 or 11 units per year.
The products of the new company will be supplied to power markets of Russia, Vietnam, the countries of South-East Asia, and other regions.

The creation of the Russian-Vietnamese company is included in the Control List of priority tasks for the further promotion of Russian-Vietnamese strategic partnership in 2007, which was developed on order of the presidents of both countries.
According to Boris Vainzikher, “despite the rapid development of the Russian energy sector, the market of Vietnam and other countries of South-East Asia remains one of the priority markets for Power Machines”. “Taking in consideration the support from the Vietnamese government and our Vietnamese partners, as well as the collaboration experience of forty years, the localization of key business processes will definitely allow us to penetrate more deeply the markets of South-East Asia and other regions, to enhance the company’s production capacities, and to increase the competitiveness of the hydro turbine equipment being produced”, says Boris Vainzikher.

AGRIMECO Corporation is one of the largest Vietnamese state holding companies (since January 2008 — a joint stock company where the state controls the major share), which operates 13 companies in the heavy machine building sector and manufactures products for the power and agricultural sectors. The consolidated annual revenues of the AGRIMECO group companies is about USD 250 million. On order of the Vietnamese government, the AGRIMECO Corporation is commissioned with the creation of the largest Vietnamese power machine-building center in the Hung Yen province, in the framework of which the Power Machines production complex will be built.