5 Jun 2023 10:40

Komatsu to halt production in Yaroslavl, Russian authorities working on relaunching

MOSCOW. June 5 (Interfax) - Russia's Industry and Trade Ministry, the government of Yaroslavl Region and Komatsu are working on the possibility of relaunching production of heavy machinery at the Japanese company's local plant.

The regional administration said earlier that Komatsu Ltd.'s Russian division Komatsu Manufacturing Rus LLC had decided to complexly halt production.

"As of today, due to intensifying external sanctions pressure, a decision has been made to suspend production. However, engineering and manufacturing staff remain at the plant, Komatsu Manufacturing Rus LLC retains obligations to support customers, and is continuing work on localizing components needed for relaunching manufacturing processes," the ministry said.

"The Industry and Trade Ministry of Russia, together with the government of Yaroslavl Region and the plant's management, is exploring options for the speedy relaunch of the plant's production, as well as prompt employment of the plant's specialists," the ministry said.

Komatsu announced in April 2022, amid sanctions, that it would halt shipments to Russia and stop production at its local plant in Yaroslavl.

However, the Industry Ministry said that Komatsu Manufacturing Rus has not been idle since March 2022. "Products continued to be made, there were only adjustments to the volume of their production," the ministry said.

The Yaroslavl regional administration said at the end of last week that Komatsu Manufacturing Rus would shut down production and cut 300 jobs.

"The plant is meeting all of its obligations to the region. Sanctions restrictions are having an impact on its operations, but the company is not winding down its operations in Yaroslavl," the regional government's press service quoted Komatsu Manufacturing Rus CEO Hosoya Kazushi as saying.

Komatsu has supplied machinery and equipment to Russia since 1969 and invested $150 million in its Yaroslavl plant, which opened in June 2010. The plant manufactures hydraulic excavators and mine dump trucks, and has capacity to build up to 3,000 and 100 of each annually.