The most popular machines used on construction sites for digging, loading loose and lump material, and doing some other work, depending on the installed additional equipment, are excavators.

An excavator is a self-propelled earth-digging machine with the main operating element in the form of a bucket or a group of buckets, which digs the earth and moves it over relatively small distances into vehicles or dumps. An excavator consists of the working equipment for earth digging or moving, the undercarriage for moving the machine, and the propulsion system for setting all mechanisms of the excavator into motion.

One-bucket universal excavator with a bucket with a holding capacity of 0.25-4 cu. m equipped with various types of integral implements is called construction excavator. Construction excavators are intended for earthworks in the soil of Groups I–IV. Using unified replaceable operational equipment (up to 40 kinds), they can perform loading, assembly, pile-driving, land-leveling, clearing and other jobs.

EXCAVATOR PRODUCTION

Among Russian manufacturers of caterpillar excavators, the leading ones are Uralvagozavod FSUE PA, Kranex MK OJSC and Kovrovets Excavator-Making Plant OJSC. Tverskoi Excavator OJSC is the absolute leader in the market of wheeled excavators.

Production of excavators in Russia

Source: Federal Statistical Agency, manufacturers’ reports. Estimates: Abercade Research Company

In 2005-2007, the volume of output on terms of money increased twofold.

Southern Federal District; Other federal districts; Privolzhsky Federal District; Urals Federal District

Central Federal District

Production of excavators in Russia by federal districts in 2005-2007, %, in kind

In 2005-2007, the attractiveness of this business doubled. The equity capital payback period – an indicator permitting to calculate how many years the recoupment of capital investment will take – was reduced from 9.1 to 4.3 years.

EXCAVATOR IMPORT

In the past few years, the import structure in the market of road-building machinery has considerably changed. Chinese manufacturers – XCMG, LONGGONG, SDLG and others – began to strengthen their positions at a fast pace. Their aggregate share in some segments of the road-building machinery market constitutes half of total imports.

However, these structural changes have not involved the import of full-circle hydraulic excavators. The leading positions there still belong to Japan, Germany and Korea. In 2007, the share of excavator import from China into the Russian Federation constituted 5% of total imports, which was 0.24% less than in 2006.

In 2005-2007, the import of excavators into Russia increased threefold.

Structure of import by excavator manufacturers (in kind)

Source: Federal Customs Service of the Russian Federation. Estimates: Abercade Research Company

The largest shares in the volume of import of wheeled and caterpillar full-circle hydraulic excavators belong to Hitachi, Komatsu and Caterpillar companies. Their aggregate share constitutes 58% of total imports.

In 2005-2007, the dominating position in the import of excavators belonged to Avensis Ltd. Its share was considerably different from the share of other market operators and constituted 19% in kind and 16% in terms of money in the total import of excavators in 2005-2007.

Active market participants were Komatsu CIS, Promtex Ltd., Volvo-Vostok CJSC, Zeppelin Rusland Ltd., Technograde CJSC, Lonmady CJSC, DV-Exim Ltd., Tirex Ltd., Zabvneshtrans Ltd. and Khino-Vladivostok Ltd.

The main share in the export of excavators was made up of machinery weighing up to 40 tons – 93.3% in kind and 74.2% in terms of money.

Distribution of excavator import by weight (in kind)

Source: Federal Customs Service of the Russian Federation. Estimates: Abercade Research Company

EXCAVATOR EXPORT

The main share of the export of full-circle hydraulic excavators comes from Uralvagonzavod PA FSUE and the Kovrovsky Excavator-Making Plant.

Structure of export by excavator manufacturers (in kind)

Source: Federal Customs Service of the Russian Federation. Estimates: Abercade Research Company

The main export market for full-circle hydraulic excavators is Kazakhstan. About 46% of the total Russian export of this kind of machines both in kind and in terms of money is sold there.

Rating of excavator exporting countries (in kind)

Source: Federal Customs Service of the Russian Federation. Estimates: Abercade Research Company

The main share of the export of excavators (87% both in terms of money and in kind) belongs to machinery weighing 20 to 40 tons.

Distribution of excavator export by weight (in kind)

Source: Federal Customs Service of the Russian Federation. Estimates: Abercade Research Company

Market Development Forecast

The current pool of excavators and road-building machinery was mostly formed in the Soviet period in accordance with the requirements of that time, and was therefore oriented mostly to large-scale construction. The economic reforms launched in the country left a considerable part of the main assets unclaimed.

Availability of excavators in construction organizations by federal districts

as of January 1, 2007

An important factor that maintains the demand at a sufficiently high level is the overarching process of replacement of machinery imported some 10-12 years ago. Another demand reserve is the emergence of clients in those parts of Russia where economic reorganization lags behind that in central regions, and private companies needing new imported machinery and capable of paying for it start to emerge only now.

The dynamics of the market of excavators and road-building machinery in general has been traditionally connected with the development of housing construction and civil engineering, and implementation of state programs in the road construction sector. Another factor that determines market buoyancy is the unusually warm winter weather permitting builders to work a greater number of days in the year.

The further market growth depends on the following factors: the growth of Russian economy, increasing funding of infrastructure projects, a high wear of machinery in operation, a low provision of enterprises with the required machinery, and a fast development of the construction market.

Machinery sales grow almost twice faster than Russian economy at large. Given a favorable economic situation, in 3 or 4 years the volume of sales in Russia will be comparable to that in Western Europe. However, the current deficit will hardly be overcome sooner than in 10-12 years. However, if for some reason a powerful investment inflow starts coming to Russia as was the case with China some time ago, and a considerable part of it will be directed into the road-building sector, then this period may be cut by half.