The former Volvo AB plant in Kaluga will be transferred to the Automobile Motor Society company associated with Dmitry Strezhnev

The former Volvo AB plant in Kaluga, which now belongs to Igor Kim, will be transferred to structures associated with Dmitry Strezhnev. The regional governor said that a partnership could be established with the Ural automobile plant, which was owned by Mr. Strezhnev until the summer. The Volvo plant, according to Kommersant’s sources, will be transferred to the Automobile Motor Society company, owned by Dmitry Strezhnev’s partner Grigory Pilipenko, by the end of November. According to Kommersant’s sources, Dmitry Strezhnev was initially interested in the Volvo plant, but the Swedish company wanted to sell the entire Russian business and specifically to Igor Kim. Now the plant is preparing to produce trucks from its Chinese partner.

The governor of the Kaluga region, Vladislav Shapsha, announced that the “Industrial Investments group of companies” became the new owner of the Volvo truck production plant in Kaluga. “The new owner, the Industrial Investments group of companies, is taking over. Negotiations are ongoing with potential industrial partners. One of these partners may be AZ “Ural”. The first trucks will be produced this year,” says a message on his Telegram channel.

We are probably talking about Industrial Investments JSC, whose shareholders are not disclosed. But the company owns several legal entities, including Special Equipment Leasing and Casting and Forgings. The company was created in April, its general director is Andrei Alexandrov, who in 2014–2015 headed RKTM-Group; at that time it belonged to Oleg Deripaska’s Russian Machines holding, which included Ural.

In 2020, Oleg Deripaska sold Ural and other road construction assets to Dmitry Strezhnev; they were managed by the United Machine-Building Group (OMG). In February, OMG fell under EU sanctions and has been in a state of liquidation since May, and in the summer Dmitry Strezhnev handed over Ural to top management. Now Mr. Strezhnev is not formally the owner of all his main assets. For example, the Mashinostroitelnaya Group, the parent company of most of the enterprises previously managed by OMG, became the property of the recently created SDM Holding of Dmitry Barmenkov. Dmitry Strezhnev remained the general director of the Mechanical Engineering Group, and Mr. Barmenkov heads Midstream LLC, owned by Mr. Strezhnev.

In its third-quarter report, Volvo AB reported that during the quarter it sold its Russian assets, consisting of a plant in Kaluga, a leasing business and an equipment distributor. The company recorded a loss on sales of SEK 794 million (approximately RUB 6.7 billion), of which SEK 640 million was attributable to the truck segment. The Ministry of Industry and Trade reported that a number of subsidiaries of the Swedish Volvo in Russia, including a truck production plant in Kaluga, came under the operational control of Expobank owner Igor Kim.

According to Kommersant’s sources, Volvo chose Igor Kim as the buyer of all its assets, although the businessman was only interested in the financial and distribution business. Now the shareholders of Stokov Machinery Equipment (formerly Volvo Vostok; it owns a plant in Kaluga through Stokov Components) are not disclosed, but the company is headed by the first deputy chairman of the board of Expobank, Alexey Sannikov. A Kommersant source familiar with the transaction said that at the end of August, Stokov Machinery Equipment and Stokov Components were acquired by Igor Kim’s Aston Group company (officially owned only by Stokov Financial Services), “which I was looking for a business partner to organize the production of trucks.” The Industrial Investments Group of Companies became such a partner, he claims: “The company plans to complete the transaction to acquire production assets in Kaluga by the end of November 2023.”

Two Kommersant sources say that Dmitry Strezhnev was interested in acquiring the former Volvo site in Kaluga. One of them notes that Volvo was not ready to consider other buyers except Mr. Kim.

According to Kommersant’s interlocutors, Dmitry Strezhnev and his partners have been discussing for several months the organization of the production of civilian trucks of Chinese brands at the former Volvo plant.

Negotiations took place with a number of companies, including Dongfeng and Faw, Kommersant’s interlocutors say. Russian Automobile also reported on negotiations with Dongfeng.

In October, Grigory Pilipenko (son of Nikolai Pilipenko, former financial director and member of the board of directors of Eurochem) created the Automotive Motor Society (AMO), registered at the same address as the former Volvo AB companies in Russia, including Stokov Components. Dmitry Strezhnev was the general director and major minority shareholder of Eurochem from 2004 to 2018. The AMO company was headed by Enrico Damiano, whose LinkedIn indicates that he holds the position of head of strategic development of OMG. He was also the chief designer of AMO ZiL. A Kommersant source says that the name of the Kaluga company may be an “homage” to ZiL. AMO will act as a party to the transaction in the sale of the Volvo plant by Igor Kim’s structures, says Kommersant’s interlocutor familiar with the progress of the transaction.

Until 2021, Grigory Pilipenko headed the Invest-Avtovolga company owned by Dmitry Strezhnev, which, through Renovatsiya LLC, owns large stakes in key Volgabas enterprises.

The design capacity of the Volvo Trucks plant in Kaluga is 15 thousand trucks per year: 10 thousand under the Volvo brand and 5 thousand under the Renault brand. The site was opened in 2009, then the production of cabins was localized. In addition, the company produced excavators in Kaluga from 2013 to 2017, but production was frozen.

The Kommersant source notes that the equipment of the Volvo plant is good: unlike the same Ural, the site does not require modernization. Kommersant’s sources note that Ural is loaded with orders from the defense industry and cannot increase supplies to the market. At the same time, one of Kommersant’s interlocutors says that the possible attraction of employees from Kaluga to Ural was discussed, despite the fact that there are currently no official ties between Mr. Strezhnev and the Kaluga asset.

Kommersant’s sources believe that it is unrealistic to resume production at the plant in Kaluga before the end of the year – at a minimum, new equipment is required, although the conveyor can be used without any problems. Another Kommersant interlocutor says that “at the time of building cooperation and preparing production for the release of new equipment with partners from Asia,” the possibility of producing “civilian trucks from a Russian manufacturer” is being considered.

Olga Nikitina, Polina Trifonova, Olga Sherunkova