Kazan engine-building industrial association is in South Stream

The Ukrainian crisis has helped the Kazan engine builders to load their capacity to a record level, providing six-month profitability for the first time since 2008.

As the BUSINESS Online has got to know, in July 2014,the Kazan engine-building industrial association (KMPO) supplied two sets of gas pumping units to compressor station Pysarevka of the Urengoy - Novopskov gas pipeline within the reconstruction of the station for the receiving of gas for the filling of the South Stream pipeline project. Due to contracts with Gazprom, the accelerated works on the gas pipeline, in the first six months of the year the KMPO’s revenue grew by 81% and exceeded $4 billion rubles. At the same time, the plant started to expand its staff, while during the past 6 years the planned staff reductions took place.

Crisis as Opportunity

In the first six months of this year, the KMPO’s proceeds increased by 81% from 2.25 billion rubles in the first six months in 2013 to 4.07 billion rubles.

The first thing that attracts attention is the fact tat the proceeds managed to significantly outstrip the growth of costs. Let’s recall that in semi-annual term the KMPO’s main costs regularly outstripped the revenues that made impossible even the total profit, not to mention the net profit. Now we see as the record amount of the revenue, as a nice break from the costs.

On the results of the first six months of this year, the total profit of the Kazan producer of gas pumping stations increased by 418.6 million rubles to 582.8 million rubles.

Let’s recall that in 2013 KMPO shipped only 12 GPA-16 "Volga" to Gazprom. According to the estimates of Gazprom, the reconstruction of the gas transportation system requires 150-180 gas compressor units annually. In the next few years, having such requirements of the gas giant, we should expect the continued growth of the KMPO’s revenue. Lets note that one of the factors of the Gazprom’s increased appetite became plans to accelerate the construction of South Stream, which must be launched to avoid the risk of failure of the gas supplies to the EU through the Ukraine, which is not friendly today.