Russia: GE Transportation Announces $1bn Direct Sourcing
Image courtesy of GE Transportation
GE Transportation Announces $1bn Direct Sourcing
GE Transportation has reaffirmed its commitment to its activities in Russia with a $1billion sourcing plan and expanded strategic partnerships in transportation, oil and gas and power by 2020. A strategic business plan was signed with Transmashholding relating to the development of a new locomotive diesel engine.
The announcement was made at the GE Oil and Gas Annual Meeting in Florence, Italy, with the aim of advancing GE’s interests in technology solutions in the oil and gas, power and transportation industries as well as encouraging demand for local suppliers.
By working with Russian industry stakeholders, GE intends to develop $1billion in sourcing opportunities over the next four years. It will enhance competitiveness in Russian manufacturing by developing key infrastructure programmes that meet GE quality and safety standards.
Jeff Immelt, GE Chairman and CEO, said:
“We continue to see long-term development opportunities in Russia, including in sourcing from Russian manufacturers for our global businesses. Today, we are also pleased to be strengthening our partnerships with Rosneft and Transmashholding. This is a great example of GE working with leading Russian companies to tackle some of the region’s most technically intensive projects.”
The strategic business plan agreed by GE and Transmasholding relates to the launch of a 50-50 joint venture to manufacture advanced GEVO diesel engines in Penza, Russia. The project will supply Russian Railways, in addition to developing engines in distributed power applications and marine vessels. A $70million investment in the facility, equipment, training and technology means that the GEVO engines will be fitted with GE technology to lower life-cycle operating costs and run with increased efficiency, reliability and lower maintenance costs.
The agreement allows for an initial production of 250 engines a year in the 2,900–4,700 kW class, potentially expanding production capacity and portfolio to meet future market demand. There will also be exploration into export opportunities .
Andrey Bokarev, Transmashholding President, said:
“Transmashholding has high expectations for the future of this joint project with GE to develop and produce state-of-the-art diesel engines. It will significantly expand our expertise and the range of products we offer to the market. In combination with our existing solutions, we will be able to offer engines to our customers that precisely meet their needs. It’s particularly noteworthy that the new venture will produce engines not only for the Russian market, but also for export.”