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General Manager PROMTRACTOR JSC CHAZ JSC KURGANMASHZAVOD MLODIK Semyon Gennadievich

General Manager PROMTRACTOR JSC CHAZ JSC KURGANMASHZAVOD MLODIK Semyon Gennadievich. Cheboksary , August 2005. MISSION. PROMTRACTOR

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General Manager PROMTRACTOR JSC CHAZ JSC KURGANMASHZAVOD MLODIK Semyon Gennadievich

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  1. General Manager PROMTRACTOR JSC CHAZ JSC KURGANMASHZAVOD MLODIK Semyon Gennadievich Cheboksary, August 2005

  2. MISSION PROMTRACTOR Solving customers demand in completing and maintaining wheeled and tracked machinery and technological system for common excavation, transferring bulk solids, pipeline construction and timber harvesting. CHAZ Production and carrying out supplies of high durability elements of undercarriage systems for assembling plants of largest producers of industrial machinery as well as forgings, steel- and iron-castings.

  3. PROMTRACTOR AND CHAZ Promtractor as well as Promtractor-Promlit and Promtractor-Servis – enterprises with almost 30-year experience of designing and manufacturing tractor machinery and spare parts for them CHAZ (Cheboksary Aggregate Works) – more than 48 years is a supplier and high-quality elements for undercarriage systems for assembling plants of largest producers if industrial machinesas well as forgings, steel and iron castings. The main activities of enterprises are : • tractor machinery; • components for assembling lines; • spare parts for tractors and automobiles; • elements of freight cars . Overall production territory – 1 800 000 square meters

  4. TECHNOLOGIES AND EQUIPMENT - PARTNERS

  5. MARKETING STRATEGY :EXPORT DIRECTIONS FOR 2005-2006 Market CIS • Ukraine; • Middle East (former SU republics) Foreign countries • South-Eastern Asia; • Latin America; • Middle East; • Africa. Product • creating specialized modifications, adapted to the requirements, demanded be local market; • production and supplying sets for assembling plants; • launching into production and sales the complete sets of undercarriage elements for tractor machinery. Promotion • development and implementing sales programs directed for specific markets. • localization of tractor machinery in regional markets • organization of maintenance and spare parts supplies

  6. MARKETING STRATEGY: RUSSIA’S MARKET DIRECTIONS FOR 2005-2006 Market • oil and gas industry; • energy; • gold-mining industry; • coal and mineral-mining industry; • road construction; • Russian railways; • timber industry • municipal economy. Product • enlargement of quantity of base models and creating specialized modifications, adapted to customer’ requirements; • launching into production and sales the whole set of tractor undercarriage elements. • Promotion • offering to a customer of new conditions of purchasing machinery; • developing service net; • transferring spare parts to the consumption regions; • localization of services into regional markets.

  7. INSTRUMENTS OF PRODUCT PROMOTION Communication • regional presentation; • branding; • industrial exhibitions; • specialized magazines; • corporative magazine. Sales stimulation • Individual approach to a customer; • leasing; • Trade-In; • forfeiting. Market measuring • Marketing research; • Evaluation of customer’s satisfaction; • Establishing consulting counsel with participation of leading domestic and foreign consumers.

  8. INNOVATIVE POLICY MAIN DIRECTIONS • using newest technologies; • equipment modernization; • increasing quality; • outsourcing.

  9. Promtractor’s The first deputy of General Manager CHAZ’ deputy General Manager for sales Nikolay Aleksandrovich GROMOV

  10. Directivity for a client - Philosophy of the activity of the group of companies «Promtractor».

  11. PARTNERS READY-MADE MACHINERY AND SPARE PARTS

  12. DIRECTIVITY FOR A CLIENT Consumer Sales stimulation program Perfecting the product Maintenance Our goal is to increase customer’s satisfaction through increasing quality of products and services

  13. SALES STIMULATION PROGRAM Leasing LEASING — the form of a long-term rental contract implying the right of leasehold redemption. Leasing stock of orders by 01.08.05 makes 186 unitsof machines for total of 14 million USD. Forfaiting FORFAITING— crediting of international operations in the form of purchasing from the exporter bills of credit, accepted by and importer. The system of deferred payments for a period of 1 to 7 years depending on the customer’s country is established. There is a working contract concluded with a company “KAZPHOSPHAT” for total of 1,6 millions US dollars.

  14. SALES STIMULATION PROGRAM TRADE IN There are 4,5 thousand tractors of 15-35 tons in use in Russia with a life time of more than 5 years. The market capacity of second-hand tractors exceeds 200 millions USD. According to TRADE-IN program used equipment of the following producers is accepted : • Promtractor; • Caterpillar; • Komatsu; • Chelyabinsk Tractor Plant.

  15. Service Move of the spare parts to the regions Modernization of the material base of the service net Providing working condition of machines during life-time Technical Audit Technical service and repair of tractors

  16. SERVICEModernization of the material base of the service net “Promtractorservice” jsc. has changed its ideology for aiming at technical service and tractors repair Technical equipment of the service centers Mobility of the service increased Engines service is organized Technical equipment is modernized Supply of spare parts Three mobile service stations «МАРТ» introduced • We got the • authorizations to serve • three type of engines • ЯМЗ; • CUMMINS; • IVECO. • Introduced: • Engine Diagnosis and • Repair equipmentof • Cummins (6 sets; • «Тest» system; • Space diagnosis system– • «Open coordinates». • Organized: • 14territory warehouses • of CHAZ • (based at Service centers); • 130 Dealers net is • organized in regions

  17. Service Moving of the spare pars stocks in the regions CHAZ Central warehouse Dealers’ stocks in the regions CHAZ warehouses on the base of “Promtractor” Service centers Mobile warehouses of CHAZ • Q-ty of CHAZ regional dealers is increased on 26% (130 organizations totally); • 14 territory spare parts are set on the base of “PROMTRACTOR”Service Centers

  18. SERVICE • Organization of technical audit • 280 Clients’ specialists were trained to service and to operate the machinary • Tractor fleet optimization in «СУЭК», «Полюс», «Алроса» companies were initiated . Technical Audit Scheme Classification of the tractors fleet Analysis of the technical condition of the fleet Mining works technology study Optimal works technologies modulation Appointment of terms and conditions of the fleet optimization Design of technical background of the project fulfillment Development of proposal for optimization Planning of the requirements of the machinery of different classes

  19. ServiceTractors Technical Service And Repair • Realization of the Programme of the Subscribers’ service. • 12 Contracts for completeservice of 114 machinery units were • Concluded with the companies , and among them: • ОАО «Russian railways»; • ЗАО «ПМК 5-Центргаз» (Gazprom); • ООО «Бургаз» (Gazprom); • ЗАО «Слюдянка». • According to the contracts service for 21 million rubles was made. • 2. Capital and maintenance repair service was made for 22 million rubles

  20. Service Reduction of the term of the repair of the tractor under guaranty period days 20 18,4 18 16 14 12 11,7 9,8 10 8,3 8 6,0 6 4 2 0 2001 2002 2003 2004 2005

  21. Goods Modernization Operator’s work condition improvement Development of the base product line Increase of the quality stability Increase of the goods consumption conditions Improvement of the production technology level Decrease of the cost of diagnostics and repair Designing new machinery Adoption to the territory conditions Outsourcing

  22. Development Of The Product Line Low class tractors of CHETRA Brand was awarded by the Silver medal «Year Brand/EFFIE-2003» Today we introduce to the market the new sub-brand CHETRA-HEAVY-Line of heavy duty industrial tractors of the world class

  23. Development of the Product Base Line • Engine Cummins QSK 19C; • power 590 hp; • weight 68 тn., • Transmission microprocessing control; • Noise and vibration proved cabin, • Hydraulic servo control of the attached accessories ; • Engine electronic control Running Resource before the capital repair 18 thousand mth Fault free termas per analogous international tractors . Technical efficiency is 6-12% higher than that of the international analogue

  24. Development of the Product Base Line Acceptance trial Bulldozer CHETRA 9.01, Krasnodar Region Company «Даурия-ЮГ» (2 pcs.) – nonfailure operating timesince 01.11.04 г. makes 3700 and 3800 mth LoaderCHETRA 60.01, Nerungry Company «Малые разрезы Нерюнгри» (2 pcs.) -nonfailure operating timesince 01.01.04 г. makes6000 and 8000 mth

  25. EXTENDEDGAMMAOF THE BASE PRODUCTS Bulldozer CHETRA 11 unified with CHETRA 9 : • Reduced height for 200 мм; • Hydraulic control of the attached implements • Microprocessor control of movement; • Improved toughness of the frame from applying casted back axle Family of the wheel machines based onCHERA 60CHETRA 60Л– for working on timber-handling bases • CHETRA К-11 – compactor for compression of domestic waste; • CHETRA Б11 – wheel machinefor fulfillment of the dozer works Axles produced by “FON” (Poland), transmissions “DANA SPICER” (Belgium), hydraulic steering and hydraulic pumps “ZAUER DANFOSS” (Germany-Denmark) are applied in the machine construction.

  26. EXTENDED VARIETY OF BASE PRODUCTS • track groups for tractors Komatsu D375, D155, CaterpillarD9H, D10N/R, D6R, СHETRA HEAVY 4 are launched into production • realization of the program for installing production of sets «track group-track roller» for tractor machinery of imported machinery (Caterpillar D7, D8, D10, D11, Dressta TD15, TD25). • increasing of production capacities for manufacturing axle-box frame А100.10.009-0 and friction strips М1698.02.001/003 for railway freight cars; • the production of sprockets and track groups for rice-harvesting equipment T-150 have been started, • the production of з-channel water-heating radiators have been started ; • the production of design-locks have been started.

  27. CREATING SPECIAL MACHINES • Machine complex for railways transport system and the divisions of emergency situations; • specialized machine for transferring assembling lines at mineral-mining enterprises; • specialized dozer for application in mines; • creating of machine complex for pile driving, carrying out drilling works and anchor screwing (together with the factory of construction machines).

  28. ADAPTATION TO ENVIRONMENT OF APPLICATION SITES Climatic • Eberschpeher heaters (Germany); • neutralizer for working in mines (Kazakhmys); • air scrubbing of advanced dust filtration; • Convecta conditioners (Germany); • variants of lacquer coating for tropical application of spare parts. Geological • variety of machines Т11.01ЯМ, Т15.01ЯМ, Т20.01ЯМ, ТМ25.01 with specific soil pressure 0.76 to 0.43 kg//square m; • sprung undercarriage system for Т20.01, CHETRA HEAVY 4. Ecological Installing imported engines of Cummins and Iveco with up-to-date ecological characteristics of European standards (ЕURO 3 and ЕURO 4)

  29. INCREASING OF TECHNOLOGICAL LEVEL OF PRODUCTION • introducing a unique in capacity cross-wedged mill for manufacturing bodies of revolution (shafts, axis)for increasing quality of track roller shafts; • applying to production new processing centers Mazak, Mitsubishi (Japan), used for manufacturing high-precisiontool set ; • purchasing laser complex Mazak (Japan) intended for improving accuracy and efficiency of manufacturing sheet articles; • planned for September 2005 launching induction furnaces in iron-cast workshop that allows to increase stability of the structure of cast iron as well as mastering production of castings from ductile iron; • implementing technology of vacuum-film moulding of large-sized cast by «Genrich Vagner-Sinto» license (Germany-Japan) that allows to improve the quality of castings

  30. IMPROVING OPERATOR’S COMFORT • Launched into production: • cabin of the 5–th generation «Buran-styling-atelier» (Russia); • cabin heaters «Ebenspeher» (Germany); • conditioners Convecta (Germany); • electro-hydraulic transmission control Omega (Russia); • hydraulic control of ripping equipment Bosch-Reksrot» (Germany); • designing solutions for improving dust-safety; • microprocessor-based control over the gear-box Omega (Russia), Dana (Belgium). COSTS OPTIMIZATION FOR DIAGNOSTICS AND REPAIRMENT • Launched into production: • diagnostic center «TEST»for tractor acceptance after assembling; • diagnostic system «SKAZ»,for diagnose during the operating process; • satellite system of distant diagnosing «Open Coordinates»; • centralized lubrication system «Lincoln»,for reducing servicing labor costs

  31. INCREASING OF QUALITY STABILITY Incorporation of approaches «Statistic process control» Recertification СМК ISO 9001:2000 The electronic system of acceptance of tractors «ТЭСТ» was incorporated The audit of CHAZ JSC was conducted by Caterpillar representatives Certification of the system of ecological management ISO 14000:2000 STABILITY OF QUALITY Toughening of technological discipline of production Realization of the draft «total production optimization» Training and motivation of personal

  32. Warranty Till july 2005 г. warranty terms enlarged: However if operating time during the first year exceeds 3000 operating hours,Warranty is prolongated for one more year. Without any reduction of operating time. If 1st year operating time lesser warranty makes up 24 months, but no more than 3000 operating hours. • Warranty period for spare parts such as track group and rollers for tractors Т-170, D355, D60, D9N, D155, enlarged by 400 operating hours for soils containing no more than 35 % quarts and now it is 2200 operating hours.

  33. NEW CLIENTS

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