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8 Aug, 2007 04:48

High-class CLAAS exports to Russia rise

Exports to Russia in the first half of this year rose a record 39%, according to figures released on Wednesday. Analysts are now expressing concern at Russia’s continuing inability to produce its own hi-tech products.

CLAAS is one of the world’s top makers of machinery for agriculture. One in every three combine harvesters sold in Europe is produced by the German firm. Its exports to Russia started with a single harvester in 1992 rising to 500 units last year with an average cost of 200,000 euros each.

The company says Russian consumers and competitors alike were only now fully waking up to quality concerns.

“The farmers and agriculture holdings try to buy cheaper machines, but in the long run they start to think about their productivity and their efficiency of their business, so they turn to buy more technologically advanced machines,” explains Pavel Altukhov, CLAAS Vostok Sales Director.

Germany remains Russia’s biggest supplier of machinery, which makes up almost half of the country’s imports. But analysts express concern that Russian competitors are not keeping pace with technology developments in the sector.

“Russia’s production of ploughs, harvesters and earth-diggers has actually been falling 5% in recent years. Domestic producers used to win contracts exclusively through low prices so they’re incapable of even making parts for the exotica that CLAAS builds,” says Sevastyan Kozitsyn, BrokerCreditService manufacturing analyst.

The customs terminal on Moscow’s northern border is handling record shipments from the EU. Although it’s a sign of Russia’s growing prosperity, it also means the country is not developing the skills base, as companies like CLAAS are forced to import every part of their machines.

GPS navigation was used on CLAAS harvesters before it was even talked about on cars. It shows the level of sophistication Russia has to achieve, if it wants to come from being a hi-tech importer to a technological producer.