Chairperson and General Director of United Machine Building Works present company’s strategy to media

Chairman of United Machine Building Works Alexei Matveev and General Director of United Machine Building Works Evgeniy Sergeev presented their company’s strategy to mass media in the course of a business breakfast that took place yesterday.

Mr Matveev told the reporters about the corporate strategy aimed at developing the business through expanding the assets it has in terms of the activities core to the business; the other points have to do with diversification of business and allying with the leading companies in the field. According to the Chairman, the company is now at the new development stage, which opens up new opportunities despite some difficulties.

Mr Sergeev spoke about the key directions the company was moving into: nuclear power engineering, oil and gas projects, mining equipment, special steel production, industrial services, and non-core activities. He believes the crisis of the nuclear industry brought about by the lack of orders can be relieved by United Machine Building Works launching pilot production of universal billets with a long production cycle. These billets could be used for making equipment for both Russian and foreign nuclear power stations under the auspices of the federal program targeted at the development of Russian nuclear power industry in 2007-2010 (or even up t0 2015). The company is currently preparing to start the preliminary stage of billet-making. The contract for making equipment for one 1000-megawatt power generating unit is expected to provide Izhorsk Works (part of United Machine Building Works) with $120m worth of orders (in terms of prices for 2006), which will both save the works from going bust and comply with the federal program goals.

Mr Matveev added that United Machine Building Works was seriously preparing for fulfilling the general program, whereas GazPromBank was acting as the company’s strategic financial partner and consultant; for instance, they would cooperate in the field of constructing and financing of the new 120-ton furnace meant for casting special kinds of steel; the furnace is to be installed on the premises of United Machine Building Works-Spetsstal.

The General Director told the journalists that special steel production was one of the most successful and profitable fields of the company’s activity, and it was hoping to make their foundry projects an independent business entity one day.

He also explained that the enterprise was trying to develop its oil-and-gas equipment production. This is a relatively new field for United Machine Building Works, yet, for instance, United Machine Building Works-Oil and Gas Projects (aka Izhorsk Works) has already become one of Russia’s largest suppliers of capacitive equipment and technological facilities for oil-and-gas industry.

In 2006, United Machine Building Works supplied equipment meant for storing natural gas liquids to SurgutNeftGaz and KazanOrgSynthesis. It also signed a contract with TolkynNefteGaz of Kazakhstan for the supply of the same fully completed equipment in October 2006. This contract is worth over 130m RUR, reports the spokesperson for the company.

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