KamAZ to reduce expenditures 18% over two years
KAZAN. June 7 (Interfax) - KamAZ Group plans to reduced its expenditures by 16.5 billion rubles in 2012-2013, the plant's corporate newspaper reported, quoting general director Sergei Kogogin.
It was earlier reported that KamAZ's production costs according to international financial reporting standards (IFRS) in 2011 came to 91.96 billion rubles. Therefore, the group might reduce costs 18% from 2011's results.
"Reducing managerial operations, getting rid of noncore functions, simplifying management and reducing the number of legal entities from 160 (in KamAZ Group) to 28, these are necessary measures. There aren't other ways for boosting asset return," Kogogin said.
"Much is said on world standards, especially when people have quality in mind. But one more thing should be understood: in the world, power costs per vehicle come to 8 MWt hours but for us it is 45 MWt hours. The average world figure for managerial expenditures is 3.8%-4% of production costs but for us it is 7.2%. We use four times as much water in production of one vehicle and so fourth. The conclusion is clear. If we don't change the company so that it meets world standards, we won't be able to be competitive. And this is in the advance to the WTO," he said.
Kogogin said that the program does not foresee a reduction in personnel at KamAZ's main production facilities.
In addition, he said that he plans to oversee the enterprise until 2016.
"I've been working at KamAZ for ten years and I haven't been sent off anywhere at any time. However, last year, I signed a four-year contract and, furthermore, I took on legal obligations to KamAZ shareholders to work until 2016," Kogogin said. He has headed KamAZ since April 2002.
KamAZ is one of the leading heavy truck producers in Russia. The main shareholders are state corporation Russian Technologies, Troika Dialog and Daimler AG.
The company's business plan for 2012 foresees the sale of 48,500 trucks. Sales in 2015 should reach 70,000 units and 100,000 units for 2020.