Vladimir Shlyomin

D

espite the colossal slump on the market in the 1990s Russia’s tractor-building industry managed to survive and now it keeps raising rates of the production growth. In 2004 the tractor-building volume increased 7.5% to 8,700 tractors. Every third of them is meant for industrial purposes. They successfully compete with foreign models and even succeed in pressing them somewhat on the market, which is proved by the reduced share of imported tractors of the most mass-produced types.

Today’s volumes of Russia’s tractor-building industry cannot be compared, of course, with indexes of the Soviet times, when the country made annually over 200,000 tractors for different purposes. Since then this market experienced a deep crisis and underwent radical changes. But if their sales in the agriculture are still extremely limited because of low paying capacity of agrarian associations and farmers, there is a positive dynamics in industrial tractors’ segment. This growth is explained in the first place by developing the road construction and mining industry.
"Russia’s market of tractors is not firmly established yet but it looks attractive and promising", believes Nikolai Scheltsin, the general director of the State Scientific Research Tractor Institute (NATI). "This is not only our opinion, Western competitors hold the same view. Foreseeing a growing demand they are getting prepared for active steps. That is why Russian tractor makers should consolidate their own positions", he says.
The leader on the Russian market is Promtraktor JSC, the producer of multipurpose heavy tractors placed third in the world after Caterpillar and Komatsu. They are used in the oil, mining, gold-mining, coal and construction industries as well as in road works and other sectors. The company is advancing its products under the Chetra trademark. These tractors meet the latest requirements. They are equipped with multifunctional units having a modular composition of parts. There are also a reliable hydromechanical transmission, a convenient structure, ergonomic driving complex. In the opinion of producers themselves, they do not give in to Western models. However, regardless of all merits of the new models, Promtraktor still does not feel itself too confident being surrounded by foreign rivals. As deputy general director of Promtraktor Viktor Chetverikov says, the marketing study, which was made to the company’s order, gave unsatisfactory results. In his words, consumers still perceive Russian machinery " as primitive, poor and cheap".
However, general director of NATI Nikolai Scheltsin believes that Russian tractors cannot be considered noncompetitive. The matter is that the competition is moving in different directions. If advertising by foreign companies accentuate consumers’ attention on the technological perfection of their machinery and drivers’ convenience, Russians use a different argument: Russian tractors are much cheaper and their servicing is more economical. For example, in Viktor Chetverikov’s words, the total price for Chetra is equal to the amount of the first payment for leased Caterpillar. The B10Ì bulldozer mastered by the company ChTZ-Uraktrañ is of the same draft category as Caterpillar or Komatsu but it is cheaper than they are by as much as 4 or 5 times and has practically the same productivity: the prime cost of excavating 1cubic meter of soil and 1 machine hour of work by imported machinery is higher by 2.5 times. These data are proved by specialists’ calculations, bulldozers’ testing and information coming from sites of their operations.
In many cases such factors become a decisive advantage on the domestic market. "If we consider the competitiveness from this point, then Russian tractors are capable of holding out on the domestic market for quite a long time", concludes Scheltsin.
However, the problem of being competitive does not come just to the price and quality. As is known, the rivalry on the market is caused not by machinery but by companies that are producing it. Along with their products they are also offering a complex of services: a wide range of models and sets, developed services, different schemes to finance sales (credit, leasing, etc.). Russian tractor makers are not really ready for such a level, while world leading producers have formed up in Russia a long time ago reliable schemes of handling consumers and keep perfecting these schemes constantly.
"Heavy industrial tractors are just ‘the first echelon’ of Western machinery on the Russian market", explains Scheltsin. "They appeared even before the country’s restructuring, when powerful, well-equipped Caterpillar and Komatsu were being acquired for mining works in Siberia. Those were isolated instances but foreign companies established a base: the infrastructure, dealership networks, etc.", he says.
In order to advance their products, foreign makers use each and every opportunity. In this respect the case with Caterpillar is remarkable. Three years ago this company built a plant near Saint Petersburg to make components for assembling enterprises of ÑÀÒ in Europe. The business plan also provided for assembling at this plant "some kinds of earthmovers and construction machinery" to be sold on the Russian market. There was information about this machinery (8 models), design capacity (up to 1,500 machines a year), volume of additional investments (about $15 million). This program looked quite sound, if one was to take into account the fact that needs of the Russian market of construction machinery and earthmovers were estimated at 25,000 to 30,000 machines and that about 45% of operating machines were to end up their service life.
Keeping in mind impending sales, the company expanded the Caterpillar dealership network in Russia, while EBRD signed an agreement with this company on coordinating efforts in leasing ÑÀÒ machinery to Russia. EBRD also took upon itself obligations for the total amount of $13.3 million.
However, American-Russian machinery has not emerged, instead, the proposed scheme is still used for advancing to the Russian market machines made at Caterpillar’s enterprises in the U.S. and third countries.
The most mass-produced trademark of industrial tractors in Russia remains the ChTZ-Uraktrañ machines; their share of the market amounts to 80%. In order to maintain the ‘bar’ on this level, the enterprise keeps renovating the model taking into consideration the latest requirements with respect to technological, ergonomic and design aspects that are traditionally considered a weak spot of Russian-made machinery. Cabs of new ChTZ-Uraktrañ are equipped with an autonomous heating and ventilating system, air conditioner, glass packs that provide necessary comfort when working in the most unfavorable climatic conditions.
As plant tests show, industrial tractors of the new generation with the module structure of main components do not yield to the best world samples and by some parameters they are even better. Nevertheless, ChTZ-Uraktrañ has not been ready so far to supply these tractors to the market. The reason is the backwardness of the services network.
"The specifics of the structure is that the whole module, not just a single part, is replaced, when some element is out of order. After that it is to be repaired at specialized repair shops", says Timofey Zakorchemny, who heads the department for monitoring the market of ChTZ-Uraktrañ. "Do not you agree that without help from specialists and the use of various gadgets it is impossible to handle the module weighing several centners (1 centner is equal to 100 kg). That is why there should be a solid customer service established but we still do not have such a service", he notes.
Along with making structurally new machines ChTZ-Uraktrañ is engaged in modernization and this year it intends to offer bulldozers of class 10 and class 15 with engines made both in Russia and abroad.
For almost 40 years ChTZ-Uraktrañ has been the world’s only maker of heavy caterpillar tractors with an electromechanical transmission. In its time the emergence of the first diesel-electric tractor DET-250 was interpreted as a genuine technical breakthrough: it was proved by key awards given at the major international exhibitions. Since then a considerable experience of operating these machines has been gained. And today the company continues working in this direction perfecting the DET-320 model. Its structure takes into account recommendations of leading customers. In particular, the power and resources of the power-plant have been significantly increased. The engine has been certified as being in compliance with the Euro-2 international ecological standards. Electrical units have also been innovated. In the opinion of Grigory Mitsyn, the chief designer of ChTZ-Uraktrañ, alternating current units look promising. In terms of structure they are much simpler, while being more reliable. Their use will let increase significantly the tractor’s potential, since there appears a possibility to connect electric engines to electricity supply networks. If need be, diesel-electric tractor can be used as a mobile electric power station for camps.
As Mitsyn says, the first sample of such a tractor has been made and at present there are talks underway with electrical companies on manufacturing prototype electric machines for it and alternating current control drives.
Wheeled industrial tractors are the specialty of the Petersburg tractor plant, which makes machines with the Kirovets trademark. Today, they are equipped with the Mercedes-Benz engines, Bosch and Danfoss hydro-distributors, Twin Disc transmission. But even with such components Kirovets remains cheaper by 30% to 40% than similar imported models.
As the plant’s general director Alexander Krykunov points out, wheeled tractors with the capacity of 140 hp to 210 hp occupy the market niche that serves as a guidepost for the enterprise. The niche of tractors with the capacity of 420 hp to 495 hp is also attractive, since these tractors can get a State order because they are on the list of the priority types of machines.
The Petersburg tractor plant is actively developing its services network. According to the general director, the enterprise has a stock of spare parts for about $1 million. In Krykunov’s words, in 2004 alone after-sales service specialists examined approximately 2,000 Kirovets tractors.
After normalizing operations at tractor plants Russian companies started developing sales systems seeking to expand their presence on international markets, particularly in those places, where consumers are already familiar with the Russian machinery. For example, Promtraktor has been successfully cooperating for several years with India’s coal-mining company Neyvely Lignite Corporation (NLC). In 2004 NLC made additional purchases of pipe-laying cranes from Promtraktor bringing their park to 25 machines. Even taking into account a 41% import duty this machinery turn out to be competitive on India’s market. Promtraktor is also participating in three tenders for supplies of machines to India for the total amount of $14 million.

Reference:
The Russian concern Tractor Plants integrates the country’s leading makers of tractors and scientific research centers specializing in this sphere. It includes Promtractor JSC, Vladimir Tractor Plant JSC, Lipetsk Tractor Plant JSC, Onezhsky Tractor Plant JSC, Cheboksary Power Works JSC, Cheboksary Works JSC, Tekhmash, Ryazan Factory, State Tractor Institute, State Motor Transport Institute and others.
The number of the personnel at the concern’s enterprises totals 35,000 employees.
Machines being made at these enterprises are sold on markets in over 20 countries. Among them are Canada, Egypt, Madagascar, countries of Eastern Europe and Latin America (Chile, Argentina, Venezuela, Colombia, Mexico).