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Business news, 11.01.2007 16:51

UK/RUSSIA: Stadco to expand in Russia

stadco_ UK-based Stadco, a Tier_1 supplier of Body-in-White (BIW) services to vehicle makers, is working with a Russian partner to build body stamping and assembly facilities in Russia.

The firm also says it expects to develop and establish its own new BIW facilities within two years in the St Petersburg and Moscow regions close to the assembly plants of international vehicle makers who are busy expanding production in Russia.

Stadco is currently working with Russian contract vehicle assembler Severstal-Auto on the establishment of body stamping and assembly facilities in Russia. Stadco says that the initiative utilises Stadco’s expertise in BIW allied with Severstal-Auto’s vehicle manufacturing experience, existing facilities and local market knowledge.

The objective of this arrangement is to offer the growing number of international car makers that are moving into Russia modern, high quality stamping and assembly facilities.

Severstal-Auto has plans to assemble a portfolio of brands and vehicles in Russia including car and light truck models from a range of makers including Fiat, Ssangyong and Isuzu – all specified for local market needs. It owns controlling stakes in Ulyanovsk Automobile Plant (UAZ – a maker of light trucks) and the Zavolzhsky Motor Works (ZMZ) which produces engines. Severstal-Auto signed an MoU with Fiat on a Russian diesel engine JV at the end of 2006.

The Stadco collaboration with Severstal-Auto initially involves Stadco leading the refurbishment and upgrading to international standards of Severstal-Auto’s Ulyanovsk press shop. Work is underway and it is envisaged that the plant will be able to supply medium and small BIW components to international vehicle makers who are starting up in Russia, as well as meeting Severstal-Auto’s internal needs and exporting components to Europe.

The second major project involves the creation of new stamping and assembly facilities in the Tatarstan region.

Stadco anticipates that vehicle production in Russia by incoming international manufacturers will amount to over 200,000 units per year in 2007, representing well over ten million potential outsourced stampings, with strong further growth likely.

In addition to the collaboration with Severstal-Auto, Stadco expects to develop and establish new BIW facilities in the St Petersburg and Moscow regions close to the assembly plants of international vehicle makers. These new facilities, which are being designed for modular expansion, in order to accommodate the expected continued growth of the Russian market, will feature fully automated press machinery and robotised assembly systems.

They will focus on larger stampings and assemblies, including class-A skin panels. Start-up of operations is expected to be within two years.

Commenting on entering the Russian market, Andrew Morriss, Managing Director of Stadco, said: “We are delighted that we are establishing ourselves in this fast expanding market. Severstal-Auto has a growing reputation as a major automotive manufacturer, and is investing in new and upgraded facilities, supported by strong local market expertise”.

Mr Morriss added: “Many vehicle makers are starting operations in Russia but none have the scale individually to justify large BIW investments. We realised that there is an opportunity for Stadco to offer OEMs modern facilities, featuring the latest automated processes, which would meet the international quality, cost and delivery standards expected by today’s vehicle manufacturers, and we are now committing significant manpower to this”.

Dermot Sterne, Stadco’s Sales and Marketing Manager, emphasised that Stadco’s collaboration with Severstal-Auto and its BIW expertise are part of a strategy to meet Russian auto industry needs over the medium term.

“In terms of the growing presence of international OEMs in Russia, there’s a clear critical mass aspect. A press shop is a very big investment and projected volumes over the next few years lend themselves to contracting_out BIW even if ultimately some of the bigger players opt to make the investment themselves when output is much higher,” Sterne told just-auto.

“In the meantime, we will be very well placed to serve the need for BIW services from several makers who are growing volumes in the 20,000-30,000 units per annum region.

“In fact, timing is ideal for us because we are already in Russia and working with our partner Severstal-Auto. That means we will soon be ready to put in place a network for our customers – with smaller panels and parts coming out of the Severstal-Auto collaboration able to complement the bigger BIW stampings and assemblies which will be produced by our own Russian facilities,” Sterne said.

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