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THYSSENKRUPP TECHNOLOGIES IN RUSSIA |
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Strategies for a booming market |
Quality of life | The theater is one of the cultural attractions in Nizhny Novgorod, where Uhde plans to expand its capacities. |
Russia is one of the world’s biggest producers of energy. A great deal of investment is being carried out into developing and processing raw material resources - and as a result the market is becoming increasingly important for the plant construction activities of ThyssenKrupp Technologies. But the segment companies are succeeding in other areas, too. |
“Good prospects” would be an accurate way to describe the business situation for the ThyssenKrupp Technologies companies operating in Russia. Although there are still some restrictions, overall the situation in the former Eastern Bloc state is stable and conditions for foreign companies reasonable. Added to this is a particularly pleasing development for our segment: Investment in developing the country’s rich raw material deposits - Russia has a third of the world’s gas reserves, six percent of the oil reserves and the second largest coal reserves - is increasing rapidly. The processing of raw materials is also gaining importance, leading to rising demand for oil and gas processing technology, ore and coal handling and processing equipment, and cement for infrastructure projects. This has opened up a wide range of opportunities for the plant construction companies Uhde, Polysius and ThyssenKrupp Fördertechnik. All three are significantly expanding their activities in Russia.
Potential of three billion euros
For example OAO Uhde, Uhde’s Russian subsidiary, is currently developing a new sales organization based in Moscow so that it can operate more effectively and more independently on the market (see our interview on page 12). Capacities will also be considerably increased before the end of this year with the opening of a new engineering location in Nizhny Novgorod. ThyssenKrupp Fördertechnik is looking into establishing its own company in Russia. And Polysius is also hard at work further developing its subsidiary POLMOS and increasing sales of products and services for the cement and minerals industry. As part of this process, engineering services are being expanded jointly with Uhde and the training of sales and project staff has been stepped up. “The market in Russia and the surrounding region offers us a potential investment volume of around two to three billion euros,” says Silke Klausen, head of marketing and sales strategy at ThyssenKrupp Technologies. And it’s not just the plant construction activities that stand to gain, the prospects are good for other business units, such as Mechanical Components, too. “The market as a whole is becoming increasingly important to ThyssenKrupp Technologies. We expect growth rates to remain stable in the coming years.” A key factor in this will be the new TechCenter in Moscow which will provide a platform for the segment’s expanding business units.
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Cityscape | The Stroganovs’ Nativity Church in Nizhny Novgorod was built in 1719 in the Russian Baroque style. |
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Full order books
A closer look at developments confirms that Russia is gearing up for growth: The market for cement production equipment is booming. As well as the orders currently on its books, Polysius is set to receive further orders in the short and medium term with a volume of hundreds of millions of euros.
Business with bulk handling equipment is also buoyant. ThyssenKrupp Fördertechnik recently received an order for a coal handling line. Further contracts are due to be placed shortly in particular for port handling facilities. There will also be projects in other areas. In anticipation of growth in order intake, OAO Uhde plans to increase its workforce in Russia initially to 400 and in the medium term by a further 150 employees. Klausen: “The high level of orders shows that the companies are well positioned and are playing a key role in the further expansion of the Russian market.”
Various activities ready for takeoff
And that applies not only to Plant Technology but to other business units as well. In Mechanical Components, for example, Rothe Erde is working on strengthening its market position against the background of rapid growth in the building sector generated by infrastructure expansion. This has boosted demand for excavators as well as tower and mobile cranes in which the slewing bearings produced by Rothe Erde are used. Berco is restructuring its spare parts sales organization and increasing the number of importers so as to participate in the expected growth in the market for undercarriages and components for crawler-mounted machinery. Estimates suggest that a market share of up to 28 percent is possible in the next few years, which would treble the current volume.
Other areas of interest include automotive supplies, where Bilstein Suspension is currently examining its options for expanding activities to take advantage of the opportunities available. Russia therefore will not only remain a key market it will become increasingly important for ThyssenKrupp Technologies in the coming years. While Plant Technology will play a major role in this, it will by no means be a solo performance - as the wide-ranging activities of the segment’s companies show.
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