Civil Branch of Tractor Plants Concern Ramping up Production with Support of VEB

The extended meeting of Vnesheconombank (VEB) and Tractor Plants Concern (TPC) management held in Cheboksary has considered the strategy of further developing the Tractor Plants Concern’s civil branch enterprises. The President of the Chuvash Republic Mikhail Ignatyev took part in the event.

The TPC civil branch includes OAO Cheboksary Aggregate Plant, OAO Cheboksary Industrial Tractor Plant (OAO Promtractor), OOO MIKONT, OOO Cheboksary Steel Making Plant, and OOO Cheboksary Industrial Foundry (OOO Promtractor-Promlit).

The participants of the meeting summed up the first results of implementing the programme of financial rehabilitation for the TPC approved by VEB’s Supervisory Board in December 2016 and discussed the Bank’s participation in the strategy of developing the civil branch’s enterprises, as well as launching the production processes and increasing output. Speaking at the meeting, Mikhail Ignatyev reminded the audience that the Tractor Plants’ civil branch employs over 8,000 residents of the Republic whose welfare and financial condition are essential in shaping the Republic’s social well-being. “The complex economic situation of the Tractor Plants Concern’s enterprises in the Chuvash Republic has been at all times the focus of attention for the Chuvash Republic. We have always conducted an honest and open dialogue with the enterprises’ personnel. We have protected and shall protect their interests,” President Ignatyev stressed. He pledged that the Chuvash government would continue to actively support the Concern’s enterprises, enabling the Republic to increase its investment attractiveness and strengthen its status as the leading machine-building region of Russia. To stabilize the financial situation, VEB has provided 3,854 billion rubles for civil branch enterprises, out of which 0,675 billion rubles have been allocated to pay off wage arrears. Furthermore, the Bank has opened a revolving credit line of 1.9 billion rubles to replenish current assets.

Efforts made in launching the Concern’s civil enterprises have stabilized industrial production. Thus, over the first five months of 2017, proceeds from sales will have grown by 39% compared to the same period in 2016, reaching, as per preliminary estimates, 1.4 billion rubles. Those from the sale of road building equipment are estimated at 15%, and those from spare parts and OEM components – at 52%.

Pyotr Zolotarev, Deputy Chairman of Vnesheconombank emphasized that the normalization of the Tractor Plants civil branch’s financial condition is of particular concern for VEB management. He said: “The preservation of the country’s largest machine-building holding has become an immediate priority for Vnesheconombank. Indisputably, the financial aid rendered together with consolidated support of the federal and regional authorities will help to keep up the capability accrued by the machine-building holding in the production of road building equipment. According to our estimates, the support given by VEB will enable the civil branch enterprises to become profitable as early as the second half of 2017.”

Albert Bakov, General Director of the Concern, noted that the package of measures pursued in association with VEB has saved the Concern’s unique manufacturing facilities and personnel. “Today’s market of industrial and road building equipment calls for diversification of the product range, which is why the Concern needs – for further efficient operation – to continue investing in the research & development and the creation of advanced examples of import substituting machines,” he said.

While visiting the working site of OAO Promtractor, the customers have displayed interest in the plant’s products, which include the world’s best heavy machines for bulldozing, ground-loosening, pipe-laying and road building. The Concern management stated that in its portfolio the enterprise has orders from customers operating in the oil and gas production, mining, construction and road building industries.

Thanks to the financial aid provided by Vnesheconombank, since April the plant has supplied all its divisions with components and materials needed for a full-scale launch of production, allowing for the non-stop assembly of equipment. Thus, OAO Promtractor has resumed the production process and is steadily increasing output.

As of 1 May 2017, the Concern employs 18,565 staff, including 8,790 in the Chuvash Republic. It plans to create an additional 1,200 jobs.

The discussion of the strategy for further development of the Tractor Plants was attended by the representatives of federal and regional authorities and supervisory agencies, major dealers and customers as well as executives of relevant public organizations and educational institutions.

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