Tognum to expand business in Russia

• Tognum and Russian government working group sign letter of intent
• Collaboration across the entire breadth of the Tognum Group’s product portfolio

Friedrichshafen/Moscow, 29 July 2010. The specialist for propulsion and power solutions Tognum today signed a letter of intent with a Russian government working group led by Vladimir I. Yakunin, president of state-run Russian Railways, for future joint production and sales of high-speed, heavy-duty diesel engines for Russia. This is to involve engines designed for a wide range of applications, such as rail, power generation, marine and industrial applications.

Referring to the signing of the letter of intent, Tognum CEO Volker Heuer said: “The planned joint venture means that we will receive the unique long-term opportunity of full access to highly interesting market segments in Russia. Now that we have already successfully entered the market with individual business deals in a variety of applications such as rail, marine or power generation, the long-term contract we are now planning will give us direct access to the entire Russian market with our engines and propulsion systems. And we will do this in a very large country with very promising growth prospects for all our products.”

The head of the Russian working group and president of state-run Russian Railways, Vladimir I. Yakunin, added: “By setting up this partnership, we are successfully implementing the instructions we received from the Russian government to produce modern, high-speed diesel engines in Russia in the future.”  

In the next few months, Tognum and the working group acting on behalf of the Russian government will prepare a contract covering the details of a future joint venture. The key focus for the first phase of the collaboration is on setting up and operating a joint assembly plant in Russia and modifying the design of the engines primarily for rail applications. More applications will follow in the second phase and an increase in the degree of local value added.

The Russian state has approved a programme for the medium-term development and production of more than 1,000 engines per year with a power output of up to 3,500 kilowatt for the entire range of off-highway applications with an engine manufacturer as partner. The cross-sector “Diesel engine” working group has been commissioned to implement the programme. The working group led by Vladimir I. Yakunin consists of representatives of state authorities and business.

The Tognum Group has been operating successfully on the Russian market for many years. Successful projects to date include ship propulsion systems, engines for mining vehicles, powerpacks for rail vehicles and distributed energy systems.