Hitachi digs around in Russia

Hitachi Construction Machinery plans to establish a joint venture in Russia to start producing excavator parts in Russia and to have finished goods by 2012.

To date, Hitachi exported hydraulic excavators to the Russian market, but an anticipated demand growth in Russia for infrastructure and mine development due to high resource prices has encouraged the Japanese firm to switch to local production.

Hitachi aims to set up the parts joint venture with local sales agent Tech Story Contract from spring 2008. The joint venture will have a capital value of around $4.6m, with Hitachi Construction Machinery expected to contribute 70 to 80 per cent.

Tech Story has already purchased a construction machinery plant in the province of Kostroma, 300km north east of Moscow. After upgrading the plant, it aims to produce parts for 3,000 hydraulic excavators a year. The components will be attached to imported hydraulic excavator bodies.

Once the finished products have been made, Hitachi will discontinue imports from Japan.