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General Director, Hitachi Machinery on creation of manufacturing facilities in Russia

30.05.2011

Исии Соносукэ Hitachi MachineryGeneral Director, Hitachi Machinery Construction Eurasia Sales Mr. Ishii Sonosuke answers the questions of Prom-oil correspondent

- Mr. Ishii, which products of your plant are well-demanded by the oil and gas industry?
These are mainly different types of hydraulic excavators, from mini- to mining excavators. The biggest one now available weights 811 tons, though it is not designed for the oil and gas industry. Primarily, the industry uses 20 to 40 ton-weighing machines, but there are heavier ones. Frontlifts are demanded as well.

- Are you going to market new products this year, or have you done it recently? What are these products?Hitachi Machinery
This year, we will introduce to the Russian market the newly designed excavator series ZAXIS-3G with EURO 2 engines. Typically, series ZAXIS-3 goes with EURO 3 engines. Now, a customer will be able to choose among two engines for the particular model.

- What are basic advantages of the new products?
EURO 3 engines require more careful maintenance, along with the use of high-quality pure fuel and oils.  EURO 2 engines are less sensitive. The customers who cannot obtain high-quality fuel may prefer the EURO 2 engine. EURO 3 engines are mounted on the most advanced third series. However, regarding all circumstances, we have designed 2 options: simpler engines and those most advanced.

- Which oil and gas companies in Russia do you cooperate with?
We cooperate with Transneft, Rosneft and other companies that have been earlier affiliated into the structures of Gazprom, Neftegazstroy, Nefteprom. They are our major customers.

- Which share of the entire manufactured production is procured by oil and gas companies?
Approximately 30-35 %.

- The Russian and foreign companies manufacturing special machinery are present on the Russian market also. Who do you consider your rival on the Russian market?
Our major rivals are foreign companies. The companies who opened their plant in Russia are considered Russian manufacturers. If to consider them foreign companies, then, our main rivals are foreign companies. Hitachi Machinery

- You have no plant in Russia for now, have you?
No, we have not, but you my be informed that we start construction of the plant in the Tver region. The Investment Agreement has been already signed. In Tver, we established a new company named " The start of it is scheduled for October 2013.

- What will be its capacity?
The planned production capacity is up to 2000 units annually.  Of course, we are not going to reach this level from the very start in October 2013.

- What was your largest equipment-supply contract for the oil and gas industry during the past year?
We had a large contract with Gazprom for supply of more than 200 machinery units.

- Was that a contract with Stroygazmontazh?
No, this contract had been signed before its establishment. At that time, they were called itself Gazprom.

- It was rather long ago. And what was the largest one in the last year?
We have not had any big supply agreements with the oil and gas industry in the last years. The contracts signed have become smaller.

- What are key interaction problems concerning the Russian oil and gas companies?
Our Company does not manufacture some types of machinery, including bulldozers and pipe layers, which are demanded in construction of oil and gas pipelines.  If a customer wishes to buy the machinery of one brand, we cannot provide it. Hitachi Machinery

- Your Company is rather old, with its own history.  When did you begin operation on the Russian market?
We have been operating on the Russian market since 1970.

- Rather long period. So, it means that you have overcome the crisis of 2008.  Did it influence your sales?
Yes, of course. in 2008, we suffered the significant sales drop. Our Russian dealer accumulated a substantial inventory volume.  So, in the second half of 2008 - first half of 2009, we had to freeze our deliveries from Japan for a long period, almost a year. 

- What is current sales dynamics? Have you already reached the pre-crisis level?
No, not yet. The year of 2010 showed the growth trend. By our estimates, the market will be restoring next year.  We gradually increase sales, but we have not yet reached the pre-crisis level.

- You are going to work over the Tver Region plant project, but these are plans for 2013.  And what are your plans for the nearest future?
In the nearest future, we will bring almost all machinery volume from Japan.  The non-Japan-manufactured equipment will be brought from other countries, such as heavy-duty trucks from Canada and mini-excavators from Europe.

NEFTEGAZSHELF-2011



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