As it approaches a shareholder-driven spin-off of its specialty steelmaking division, The Timken Co. is expanding the remaining core of the business, forming two joint-ventures to manufacture and sell bearing products in the industrial markets of Russia and the Commonwealth of Independent States.
"Timken continues to pursue growth opportunities globally, investing in geographies where critical market sectors like energy and infrastructure development are expected to generate demand for Timken premium bearings and related products," according to Christopher Coughlin, Timken group president.
First, Timken established a joint venture with European Bearing Corporation (EPK) to supply those industrial markets in Russia and the CIS, using EPK's position as a manufacturer in that market, along with Timken bearing designs and manufacturing techniques. The venture will operate as EPK-Timken Bearing Company.
"We've been conducting business in this area of the world for decades and directly supporting customers in Russia for more than 20 years,” Coughlin continued. “Together, we expect Timken and EPK will be able to provide unparalleled capabilities to industrial customers in Russia and the broader CIS region, which continue to be strategic markets for us."
OAO EPK is the largest bearing manufacturer in the CIS region producing bearings for all of the mechanical engineering industries.
"This agreement represents a coordinated commitment to provide industrial customers with a single source of bearings locally that deliver the most reliable performance to meet their current and future needs," stated CEO Alexander Moskalenko, of EPK.
Timken stated it expects the EPK venture to be “a consolidated approach” to the regional market, combining the two firms’ industrial sales teams and building a new manufacturing plant to produce large bore industrial bearings.
Construction at a yet-to-be-announced site is expected to start in 2015, with production starting 24 to 36 months later.
In the second development, Timken agreed to form a venture with United Wagon Company (UWC), a Russian manufacturer and servicer of freight cars. Together, they will manufacture Timken® AP-2™ rail bearings in Russia at a dedicated manufacturing site. Construction is expected to start within the next several months.
This JV is contingent on various regulatory approvals and other commercial and customary conditions.
"Leveraging the expertise Timken provides as a global leader in high-performance bearing design is critical to our strategy to deliver modern, high-quality freight cars to our customers in Russia and the Commonwealth of Independent States," stated Roman Savushkin, CEO of UWC.