Ford becomes launch customer for MKK in Tatarstan

Billionaire Viktor Rashnikov ''signs'' for two JVs in Tatarstan

Ford becomes launch customer for MKK in Tatarstan Photo: Maksim Platonov

Ford Sollers expectedly became the launch customer of the first in the Volga region steel service centre, established a year ago by the Turkish company Coskunoz and the Magnitogorsk Iron and Steel Works. At the festive launch ceremony of the metal centre with participation of the heads of Tatarstan and Chelyabinsk Oblast, president of the joint venture Ford Sollers Adil Shirinov vowed that he would load the partner plant ''to the full'', ''charging'' for it all Ford models assembled in Tatarstan. However, as Realnoe Vremya found out, the ambitious idea of the Turks to cover the ''automotive'' Volga region, where 1,1 million cars are assembled, has not succeeded yet. The brotherly hand of friendship was also extended by another joint venture — KAMAZ-Daimler.

Ford Sollers vertical

Less than a year after the announcement of the beginning of the construction of the Volga service metal centre (SMC), its ''fathers'' — Magnitogorsk Iron and Steel Works (MMK) and the Turkish presswork company Coskunoz Alabuga — launched a plant for the production of forms for body parts. ''MMK-Coskunoz-Alabuga is the joint project of the traditional presswork supplier Ford Sollers of the Turkish company Coskunoz and MMK, which cost a total of 1,03 billion rubles. Its value lies in the fact that MMK agreed to stabilize the rhythmic work of Coskunoz Alabuga, providing it with a regular supply of sheet metal at a fixed price. In turn, MMK-Coskunoz-Alabuga took up to cut it by the patterns of the customer and to ship pressed products to its assembly plant.

The main vertical around which this new production chain was built was Ford Sollers. According to project managing director from MKK Andrey Shvetsov, the metal centre MMK-Coskunoz-Alabuga as the final link in the supply of finished body parts has signed a launch contract with Ford Sollers for the coming years. According to it, MMK-Coskunoz-Alabuga will provide with blanks the largest presswork company Coskunoz-Alabuga, which will produce front and side body parts. ''The service metal centre will receive 60,000 tonnes or 41,500 tonnes of forms from MMK a year,'' he said. For cutting metal it will use the latest equipment from the German manufacturer — automatic metal cutting line SCHULER. The parts made here will be supplied for configuration of all Ford models assembled in Tatarstan. We are talking about Ford Explorer, Ford Kuga, Ford Transit, Ford EcoSport and Ford Fiesta, they said in the press service of Ford Sollers.

The building was transferred to SMC for long-term lease

The managing company Alabuga made them a royal gift: with a project cost of 1,03 billion rubles it invested 670 million in the construction of the building. It is transferred to long-term lease to the SMC. Although there is also a possibility of redemption.

Kaluga falls out of the cage

With the opening of the SMC, the form supplier from Kaluga, Severstal-Gonvarri-Kaluga, which provides Ford presswork productions in Vsevolzhsk, ''fell out'' of the production chain Coskunoz-Ford Sollers. However, cooperation with it incurred large logistics expenses, Ahmet Erdem Ajay explained the change of CEO of the holding company Coskunoz. ''Suffice it to say that it was required to pay for the transportation of sheet metal from MMK to Kaluga at a distance of 1,900 km, and then of ready forms from Kaluga to Naberezhnye Chelny another 1,200 km. In the new scheme, the transport leg will be only 500 km (from Yelabuga to Naberezhnye Chelny), Mr. Ajay told reporters. ''From 4,500 km to 500 km — this is a huge advantage, this is a great optimization of costs,'' he rejoiced, however, without naming specific figures of savings.

The president of the joint venture Ford Sollers, Adil Shirinov, confirmed that the new MSC will be the guarantor of price stability of Ford cars assembled in Naberezhnye Chelny. ''For us, presswork is a significant step to stabilize the cost of assembling cars, or at least part of it,'' he said. ''From the point of view of the buyer, we can guarantee a fairly high part of the cost in rubles, and the cost will be stable against currency fluctuations. Look at how the prices of imported cars change after each jump… And an attempt to shift them on the buyer turns into a decrease in demand,'' he complained. But Adil Shirinov decided not to explain how this will specifically affect the final price of the assembled cars.

Adil Shirinov confirmed that the new MSC will be the guarantor of price stability of Ford cars assembled in Naberezhnye Chelny

Meanwhile, project managing director from MMK Andrey Shvetsov specified that with the opening of the SMC the prices for the forms from MKK would simply become more stable for the press operator, and therefore for the final manufacturer. ''The contracts for the supply of MMK forms are concluded at fixed prices, whereas before they were floating. ''Transport costs, which were difficult to calculate, are gone,'' he explained, adding that since recently Coskunoz Alabuga has transferred to pattern cutting of the forms of MKK.

''The opening of the new SMC in close proximity to Ford Sollers plants allowed to optimize the supply chain and reduce the risk of damage to rolled metal and blanks during transportation. All products of the new SMC will meet both international standards and global quality standards of the Ford brand,'' the press service added. On the other hand, the SMC will help to deepen localization of assembly production of JV Ford Sollers, whose agreement on industrial assembly is expiring. According to Adil Shirinov, the company is discussing further projects on localization of production in Tatarstan, in particular, transmission. ''The creation of transmission is a requirement of the special investment contract, which the ministry of industry and trade is working out with us now. All market participants who want to stay on the Russian market are also working on this issue. We are waiting for the requirements from the ministry of industry and trade, after which investments will be determined,'' he told reporters before the beginning of the celebration.

There are another dozens of automotive production facilities for 1,1 million units nearby

However, the placement of the SMC in favour of Yelabuga was determined not only by the proximity to Ford Sollers. In the area of the Volga region there are concentrated the largest automobile productions: KAMAZ, AvtoVAZ, UAZ. In total, they produce 1,1 million cars. MMK-Coskunoz-Alabuga potentially relied on agreements with them, wanting to integrate into the production chain.

According to Andrey Shvetsov, negotiations are going with everyone, but the obvious success is only with KAMAZ-Daimler. ''It has been signed a contract with them. Tests are under way,'' he said. But AvtoVAZ does not want to interact for obvious reasons. But there is still some time, Shvetsov believes.

Governor of Chelyabinsk Oblast Alexander Dubrovsky and Chairman of the Board of Directors of Magnitogorsk Iron and Steel Works Viktor Rashnikov came for the launch ceremony. They were accompanied by Tatarstan President Rustam Minnikahnov and the whole management team of Coskunoz

Tatarstan will sign a contract with Chelyabinsk at SPIEF 2018

Actually, the celebration of the launch of the production was held with fanfare. Like in December 2017, when the stone was laid for the future plant, the high-ranking officials of the Urals — Governor of Chelyabinsk Oblast Alexander Dubrovsky and Chairman of the Board of Directors of Magnitogorsk Iron and Steel Works Viktor Rashnikov – came again for the launch ceremony in Alabuga. They were accompanied by Tatarstan President Rustam Minnikhanov and the whole management team of Coskunoz. The head of Sollers, Vadim Shvetsov, did not arrive.

To be honest, guests from the Urals rarely come to Tatarstan: Tatarstan VIP fly to negotiations to them more often, agreeing on special conditions for the supply of rolled metal. But this time, top officials of one of the richest regions arrived together with President of Tatarstan Rustam Minnikhanov, promising further development of economic relations between the regions.

The head of Chelyabinsk Oblast, Alexander Dubrovsky, reminded that the agreement on cooperation with Tatarstan was signed in 2010. ''But without me,'' he said, adding that was annually updated. ''At SPIEF 2018 we will sign a new agreement that will bring us to a new level of social and economic cooperation,'' he announced. Probably, they again will change the logistic structure of metal supply in Tatarstan.

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By Luiza Ignatyeva. Photo: Maksim Platonov
Tatarstan