Power Machines OJSC announces the Launch of Construction of the First Start-Up Facility of its Power Equipment Production Plant

The Government of St. Petersburg has adopted a Resolution on the design and construction of a new power equipment production plant by Power Machines, OJSC. Within a month after effective date of the Resolution, the City Property Management Committee and Power Machines, OJSC will conclude a lease contract for the two land plots in the industrial area of Metallostroi, with the total area of 132 ha, on investment conditions for the period of the construction.

The first project stage envisages construction of the plant’s first start-up facility for the production of low-speed and high-speed turbines and turbine generators for nuclear power plants. The completion of the first start-up facility is scheduled for the third quarter of 2012.

The investment into construction of the plant’s first stage will amount to about 6 bln rubles. The construction activities shall be funded both through own and borrowed funds.

The scope of construction for the first start-up facility includes:

• a three-span shop with the total area of 22 thousand square meters fitted with advanced equipment and designed to produce high power turbines and turbine generators;
• a balancing stand;
• a hardware production system;
• a warehousing facility;
• engineering infrastructure facilities.

Along with manufacturing facilities, advanced household facilities will be built, including a dining room, a medical center and comfortable dressing rooms for workers.
The facility’s manufacturing program will be designed to produce two low-speed and two high-speed steam turbines per year with capacities of up to 1600 MW each and four turbine generators with the same capacity. This will expand the Company’s production capacity allowing it to manufacture new types of power equipment. It is anticipated that by December 2013 Power Machines will be able to offer to their prospect-customers high-quality state-of-the-art equipment of high-power turbine sets for the use in power units constructed within the framework of the NPP-2006 project available in two design versions, either in low-speed or in high-speed.

Upon agreement with the Committee for Urban Development and Architecture of the St. Petersburg Government, a land use planning project is currently designed by the Institute of Regional Development. The company is planning to begin land use planning on the site in the first quarter of 2010, upon receiving all required approvals.

According to the CEO of Power Machines, OJSC Igor Kostin, the construction of a new production complex, to be provided with state-of-the-art equipment, is one of the Company's strategic development priorities. “The company seeks to maintain current production rates of its existing facilities at LMZ, ZTL and Electrosila, at the same time, continuing to invest in their upgrades. This is due to the need to implement a large-scale production program and fulfill our obligations to the customers”, said Igor Kostin.

Recall that a year earlier, the Government of St. Petersburg provided the Company with three sites for surveying covering about 180 hectares in the industrial area of Metallostroi (in St. Petersburg’s suburb district of Kolpino), and in early 2009, recognized the construction of a new Power Machines' enterprise as a strategic investment project.

In 2008–2009, the costs of design and surveys equaled to about 600 mln rubles. The surveys also include preparation and approval by Rospotrebnadzor of an ecological justification of the enterprise’s location within the industrial area of Metallostroi.