Under the agreement, the JV will manufacture, market and sell certain Terex and all GAZ Group construction and roadbuilding products in Russia, as well as distribute construction and roadbuilding products manufactured by Terex and exported to Russia.
The JV, expected to be operational in early 2012, also plans to export certain GAZ products.
GAZ Group will provide manufacturing facilities and human resources, as well as access to its Construction Equipment Division dealer network.
Oleg Deripaska, CEO of Basic Element, majority owner of GAZ Group, said the JV deal “puts both companies in a strong position to take advantage of Russia's booming infrastructure building market. Russia has a lot of roads to build, and we shall be there and ready to deliver.”
Terex chairman and CEO Ron DeFeo said: “From our viewpoint, the opportunity for Terex to participate in helping to build vital infrastructure in Russia and other markets, as we better serve the equipment needs of both existing and new customers is truly exciting. The combined product offerings, expanded geographic reach and extensive manufacturing capacity in the Russian Federation offer considerable opportunity for both our companies.”
GAZ Group president BoAndersson said: “Creation of a JV with leading international manufacturer Terex will make it possible to significantly extend the model range of GAZ Group's construction and road-building equipment, to master modern technologies and cooperate on strategic procurement opportunities. It will give us good opportunities to enter new export markets as well.”
Steve Filipov, president of Terex Developing Markets, added: “This new venture is truly a winning combination. It will help Terex to solidify our goal in becoming the most customer responsive company to meet local infrastructure building needs. In addition, it will bring the distribution partners together from both GAZ Group and Terex to deliver the best product line, quality, support, and service available in the Russian market, not to mention our long term objective to increase and diversify our revenues in developing markets.”
No decisions have yet been reached on the specific Terex-designed products to be produced by the JV. Production will be based at GAZ Group’s Tvex Excavator, Bryansk Arsenal, Chelyabinsk Construction and Road Machines, and Zavolzhsky Crawler Vehicle plants.
GAZ Group is the largest manufacturer of commercial vehicles in Russia. It has 18 factories in 10 regions of Russia. It produces light and medium-duty commercial vehicles, heavy-duty trucks, buses, cars, construction and road-building equipment, powertrain and automotive components. GAZ Group has a 50% share of Russia’s light commercial vehicle and all-wheel drive heavy-duty truck markets, about 70% in the bus segment, more than 40% in the engines segment and more than 65% of the wheel excavator and motor grader markets. Controlling shareholder of the company is Russian Machines Corporation, part of Oleg Deripaska's Basic Element.
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