OREANDA-NEWS. June 01, 2011. GAZ Group, part of Oleg Deripaska’s Basic Element, and Terex Corporation (NYSE:TEX) announced they have entered into an agreement to form a joint venture company for the manufacture of construction and roadbuilding equipment in Russia. Under the agreement, the joint venture will manufacture, market and sell certain Terex and all GAZ Group construction and roadbuilding products in Russia, as well as distribute construction and roadbuilding products manufactured by Terex and exported into Russia. The joint venture will also sell certain construction and roadbuilding products of GAZ Group at the export markets, reported the press-centre of GAZ Group.

GAZ Group will provide manufacturing facilities and human resources, as well as access to the GAZ Group’s Construction Equipment Division dealer network.  The joint venture arrangement will allow access to relevant technology and know-how that will help to upgrade the current product portfolio of the GAZ Group Construction Equipment division. The joint venture is expected to be operational in early 2012.

Oleg Deripaska, CEO of Basic Element, majority owner of GAZ Group, commented: “I welcome this joint venture between GAZ Group and Terex, which expands and upgrades the road construction equipment product line offered to Russian and international customers and puts both companies in a strong position to take advantage of Russia's booming infrastructure building market.  Russia has a lot of roads to build, and we shall be there and ready to deliver.”

Ronald M. DeFeo, Chairman and Chief Executive Officer, Terex Corporation, said: “From our viewpoint, the opportunity for Terex to participate in helping to build vital infrastructure in Russia and other markets, as we better serve the equipment needs of both existing and new customers is truly exciting. The combined product offerings, expanded geographic reach and extensive manufacturing capacity in the Russian Federation offer considerable opportunity for both our companies.” 

Bo Andersson, President of GAZ Group, stated: “Creation of a JV with leading international manufacturer Terex will make it possible to significantly extend the model range of GAZ Group’s construction and road-building equipment, to master modern technologies and cooperate on strategic procurement opportunities. It will give us good opportunities to enter new export markets as well.”

Steve Filipov, President of Terex Developing Markets, added: “This new venture is truly a winning combination for both companies. It will help Terex to solidify our goal in becoming the most customer responsive company with the local infrastructure GAZ Group brings to our partnership. In addition, it will bring the distribution partners together from both GAZ Group and Terex to deliver the best product line, quality, support, and service available in the Russian market, not to mention our long term objective to increase and diversify our revenues in Developing Markets.”

The joint venture will announce the specific Terex designed products that will be initially introduced and producing in the near future as decisions are finalized.  Production is planned for GAZ Group’s Tvex Excavator, Bryansk Arsenal, Chelyabinsk Construction and Road Machines, and Zavolzhsky Crawler Vehicle plants.